LITERATURE REVIEW - The Impact of Long-Term Orientation and Uncertainty Avoidance on Entreprene

The following segments introduce the definition of the selected variables for this study.

Besides, the author states the relationship between those variables. Two cultural values reported by Hofstede function as independent variables, Long-Term Orientation, and Uncertainty Avoidance; Entrepreneurial Intention was utilized as the dependent variable; and finally, the selected moderator in the relationship between Dependent and Independent variables was the personality trait of Locus of Control.

Long-Term Orientation (LTO)

Hofstede and McCrae (2004) created the concept of Long-Term and Short-Term Orientation.

The roots of this concept were based in Confucius's Teachings. Those included the following elements: Unequal status relationships determine society stability, Family is a model of all social organizations, and life goals should be trying to acquire skills, knowledge, be patient and give the best in every situation (Hofstede & Minkov, 2010).

As mentioned before, culture and personality traits are factors that influence the behavior, perception, and a person's values. Hofstede (2004) defined culture as "The collective programming of the mind that distinguishes one group or category from another" (p. 580). Similarly, Lim, Leung, Sia, and Lee (2004) national culture was defined as "The values, beliefs, and assumptions learned in early childhood that distinguishes one group of people from another" (p.546). This study evaluated the two cultural dimensions at an individual level. Oyserman, Kemmelmeier, and Coon (2002) articulated that individual-level approaches regarding cultural aspects assume that part of the cultural characteristics is expressed as mental representations in an individual. In other words, culture is treated as a set of individual values, attitudes, and norms that influences a person's motivation and perception (Lim et al., 2004).

For a better comprehension of Long-Term Orientation, it is necessary to explain the term of Time Orientation. According to Bearden et al. (2011), every member of society evaluates Time Orientation differently; this concept influences several aspects of an individual's life. It is about how a person assesses a situation regarding succession and duration and how they value the past, present, and future. Time Orientation is related with Hofstede´s cultural dimension of Long-Term

Orientation, which was "(...) the degree to which one plans for and considers the future, as well as values traditions of the past" (Nevins, Bearden, & Money, 2007, p. 261).

This study defined LTO as: "The fostering of virtues oriented towards future rewards, in particular perseverance and thrift" On the counterpart, Short-Term Orientation is defined as: "the fostering of virtues related to the past and the present, in particular, respect for tradition, preservation of face and fulfilling social obligations" (Arli & Tjiptono, 2013, p. 19). Individuals with a higher Long-Term Orientation adopt perseverance, planning, and hard work in the present to obtain a future reward. LTO states two main characteristics: considerations and plans for the upcoming future and respect towards traditions (Nevins et al., 2007). On the other hand, short-term oriented countries focus on immediate stability and income (Park & Lemaire, 2001).

As Minkov and Hofstede (2012) stated, LTO is an accurate predictor of national achievement, especially regarding economic growth, which is why the study of this variable is essential.

According to Park and Lemaire (2011) findings, LTO has a positive impact on life insurance demand, which is commonly related to economic, financial, and cultural variables. Also, the overall demand for life insurance is correlated to the wealth of a country. In accordance with Hofstede (2001), individuals that are driven by LTO focus on developing social relationships and market positions, meaning that business interpersonal and family relations provide them with a high level of satisfaction. In contrast, individuals driven by Short-Term Orientation tend to focus on short-term results regarding human relations (Alves et al., 2006).

Several authors identify LTO as one of the most critical cultural dimensions regarding the adoption of business behavior (Buck, Liu, & Ott, 2010). Hofstede (2001) stated, “Business in long-term oriented cultures are accustomed to working toward building up strong positions in their markets” (p. 225). Also, according to Wangi and Bansal (2012), a firm that has LTO experiences different benefits compared to a firm with a short-term orientation. For example, LTO “widens the firm’s field of vision, which enables the firm to recognize the potential of CSR investments” (p.

1139). Consequently, those firms with LTO tend to implement technology that will emphasize an on-going innovation process and encourage the development of strategic resources. Also, Ryu, Park, and Min (2007) established LTO as an increasingly significant variable that influence a firm’s competitiveness relating it with a more trustful relationship between a firm and its clients since “LTO is defined as a manufacturer’s willingness to make short-term sacrifices to realize long-term benefits from the relationship with its supplier” (p. 1226).

Entrepreneurial Intention (EI)

Different authors establish that social conditions and personal characteristics influence a person's decision of behaving in a specific way, for example pursuing entrepreneurial activities (Roy & Das, 2017). Entrepreneurial Behavior enhances the discovery and acquisition of resources, the comprehension and exhaustive search of information, and finally, the discovery of opportunities to implement new business. Despite that, to perform an act or undertake any behavior, an intention must first exist (Contreras et al., 2017). According to Bird (1988): "Intentionality is a state of mind directing a person's attention (and therefore experience and action) toward a specific object (goal) or a path in order to achieve something (means)" (p.442). Bacqa and Alt (2018) mention that starting a business with the intent of pursuing a social delegation can be understood as Entrepreneurial Intentions.

Entrepreneurial Intention is considered one of the most relevant variables to explain and predict Entrepreneurial Behavior (Do & Dadvari, 2017; Krueger & Carrud, 1993). The concept of Entrepreneurial Intention is a state of mind the drives a person's attention and experience towards planned Entrepreneurial Behavior (Do & Dadvari, 2017). This concept is defined by many authors as: "A connection or intention of an individual to start his/her business undertaking" (Sekhar, Patwardhan, & Vyas, 2017, p.87). In the present study, Entrepreneurial Intention represents: "the effort that the person will make to carry out that entrepreneurial behavior" (Liñán & Chen, 2009, p. 596).

Some of the most cited characteristics of social entrepreneurs are innovativeness, achievement centered, tolerance for ambiguity, and value for creation. It is considered that Entrepreneurs are committed to serve human needs and to improve society’s life quality (Hwee &

Shamuganathan, 2010). Also, it is considered that proactive personality is an important variable that determines individual organizational results, meaning that proactive individuals have a higher motivation of adopting entrepreneurial behavior or becoming self-employed (Gupta & Bhawe, 2007). Crant (1996) stated that people with proactive personalities, such as entrepreneurs, identify opportunities and demonstrate initiative to take action. As well, they persevere until they accomplish the primary goal or until they achieve a meaningful change. Now, entrepreneurial activities can support a firm by providing an on-going process of value creation, and this provides a competitive advantage to the firm. (Gupta, MacMillan, & Surie, 2004).

Long-Term Orientation and Entrepreneurial Intentions

As the Theory of Planned Behavior (TPB) explained, different antecedents can affect intentions. First, the attitude or believes regarding the desired behavior, which different authors established that are influenced by the individual's context or culture; Second, the feeling of viability towards the action; Third, the immediate environment approval or disapproval regarding the creation of a company is also considered (Rosique, Madrid, & Perez, 2017). McClelland (1961) mentioned that individuals with Entrepreneurial Intentions tend to set long-term goals and reach those established goals through their efforts. (Karimi et al., 2017).

As established before, LTO is a national predictor of social and business growth; since people with a high level of LTO focus on developing social relationships and strong market positions, they also make plans for upcoming futures. In addition, they make short-term sacrifices to obtain long-term benefits. The author thought that the adoption of LTO relates to Entrepreneurial Intentions since individuals with these characteristics are capable of identifying potential resources for business creation and take advantage of those resources. Also, they demonstrate a higher motivation in adopting innovative behaviors to achieve meaningful changes.

Several cross-cultural studies showed that Entrepreneurial intention and LTO varies across countries, especially between develop and undeveloped ones. (Karimi et al., 2017; Lakovleva, Kolvereid, & Stephan, 2011; Schlaegel & Koenig, 2014). Since actions made by individuals are a result of their personality traits and external conditions, such as their culture, the first assumption is proposed:

H1: Long-Term Orientation is related to Entrepreneurial Intention.

Uncertainty Avoidance (UA)

According to Shirokova, Osiyevskyy, and Botatyreva (2016), involvement in entrepreneurial activities is more constant in some cultures than others. (Lee & Peterson, 2000). In general, the link between Entrepreneurial Intention and Entrepreneurial Behavior is stronger within individuals that were raised in societies that promote entrepreneurship (Shirokova et al., 2016). However, Patterson, Cowley, and Prasongsukarn (2006) evaluated that persons in every country tend to perceive and internalize values and beliefs different from those known as traditional within the nation (Kwok & Uncles, 2005). As Roy and Das (2017) mentioned, personality traits and cultural

factors influence human behavior. Since creating a new firm is a complicated process influenced by different factors, this study evaluated the level of Uncertainty Avoidance at an individual level, taking in different consideration stimulus by stating a cultural dimension as an individual characteristic that is motivated by a person's surroundings because it might have a high impact on Entrepreneurial Intentions.

Do and Dadvari (2017) stated that: "A person who has a high tolerance for ambiguity is one who finds ambiguity situation challenging and who strives to overcome the unstable and unpredictable situation to perform well" (p.187). UA is related to neuroticism, meaning that a person with high uncertainty avoidance tends to be driven by nervous energy, which results in the expression of emotional behavior. The opposite side is influenced by the kindness and emotional equilibrium regarding their adopted behaviors (Hofstede & McCrae, 2004).

Following Hofstede (2001) statements, the definition of Uncertainty Avoidance in this study was: "The extent to which the members of a culture feel threatened by uncertain or unknown situations" (Jung & Kellaris, 2004, p.743). The concept states the level of threat that people feel towards ambiguous or unstructured situations. The need for reducing ambiguity and the desire to experience only predictable situations are related to a high level of Uncertainty Avoidance. On the other hand, the tendency of adopting risk-taking behavior is related to Low Uncertainty Avoidance (Patterson et al., 2006). Stewart, Carland, Carland, Watson and Sweo (2003) followed Hofstede (1980) statement: "People in high Uncertainty Avoidance cultures focus on stability and security, whereas low Uncertainty Avoidance cultures tend to demonstrate higher achievement motivation, more risk-taking, and more tolerance of unstructured, ambiguous" (p. 32). However, Uncertainty Avoidance should not be considered the same as Risk Avoidance since UA does not refer to the degree to which an individual will assume or avoid risks; instead, it indicates the degree to which a person prefers to understand the situation requirements (Zhang & Zhou, 2014). Uncertainty Avoidance is related to some leadership characteristics such as decision-making, communication style, and a process of resources recognition. According to Offermann and Hellmann (1997), if an individual’s perception of ambiguity or unstructured situations is positive or negative, this influence an individual’s decision-making process.

Consequently, Duronto, Nishida, and Nakayama (2005), stated that communication is a potential situation of unfamiliarity or uncertainty and individual with a high UA will perceive communication as a negative situation and will avoid interacting with other people. Also, literature

arguments that UA is an indicator of individual perception of elements that determine threats and opportunities (Barr & Glynn, 2004), which influences the process of resources recognition and decision making in entrepreneurial situations. A high level of UA negatively influences managerial performance because UA is suggestive of change resistance. “Executives who maintain low tolerance for conditions other than predictable, certain context are likely to shy away from rendering action which alters their environment” (Geletkanycz, 1997, p. 620). In other words, managers with high UA might be resistant to innovation, and nowadays it is known that innovation might lead to value creation in a firm, and that plays an essential role in international business success (Lee, Garbarino, & Lerman, 2007).

Uncertainty Avoidance and Entrepreneurial Intentions

The concept of Uncertainty Avoidance is related to Entrepreneurial Intentions since one of the most known characteristics among Entrepreneurs is being able to take risks. Correspondingly, a risk is a situation of uncertainty because it is expressed in a proportion of possibilities and to some extent, an insurable condition (Wennekers, Thurik, Stel, & Noorderhaven, 2007). For instance, the process of creating a new service or a new organization involves confronting a high amount of uncertainty (Lee & Peterson, 2000). As stated by Wennekers et al. (2007), a low level of Uncertainty Avoidance is an important characteristic that Entrepreneurs have because they cannot be sure of the outcomes derivations in establishing a new venture. Different studies showed that UA is a predominant characteristic of entrepreneurs compared to other individuals with different occupations (McGrath, MacMillan, & Scheinberg, 1992; Stewart et al., 2003).

Referring to entrepreneurial behavior is establishing that an individual is inclined to take business-related risks, to embrace innovation and consequently obtain competitive advantage (Gupta et al., 2004). Besides, entrepreneurs are characterized by the desire of creating exciting and new jobs, creativeness, and challenging themselves (Cho & Wong, 2006). The mentioned characteristics are related to low UA since they imply embracing unstructured situations. “Since risk and uncertainty are part of entrepreneurial endeavors, entrepreneurs are frequently required to make decisions with insufficient information, which creates ambiguity. Therefore, they must have tolerance for ambiguity” (Gurel, Altinay, & Daniele, 2010, p. 652).

Likewise, Lee and Peterson (2000) stated:

Thinking about starting a new business ventures means confronting a great deal of uncertainty. Moreover, in the development of new ideas, entrepreneurs have to make their own decisions in settings where there are few, if any, historical trends, and relatively little direct information. (p.404)

For that reason, the author proposed the second assumption:

H2: Uncertainty Avoidance is related to Entrepreneurial Intention.

Locus of Control and Its Moderating Effect

The authors Rotter and Mulry (1965) created the concept of Locus of Control (LOC). It was mainly utilized to argue that an individual's behavior is driven primarily by observation and imitation, but later in life it is modified depending if the adopted behavior has a negative or positive consequence (reward and punishment), this is the central statement of the Theory of Social Learning (Contreras et al., 2017). In other words, the Social Learning Theory focused on an individual determined behavior driven by instinctual motives (Rotter, 1966). On the other hand, The Theory of Planned Behavior by Ajzen (1985), explained that perceived control and internalized social norms influence the intention to adopt or perform a specific behavior (Naushad

& Malik, 2018).

According to Karimi et al. (2017), Locus of Control refers to: "The degree to which an individual generally perceives events to be under their control (Internal Locus) or in control of powerful others (External Locus)" (p. 203). The term Locus of Control divides society into two groups, those with Internal Locus and those with External Locus. Individuals with a higher LOC experience a high level of self-efficacy, meaning that they tend to achieve their goals with their efforts and personal abilities. In the opposite side, individuals with lower LOC believe that external factors, such as God or influential persons, control their outcomes. Also, a high External Locus causes fear towards failure, and that results in a low initiative and risk aversion towards unstructured situations (Roy & Das, 2017). Locus of Control is a term used in several studies as a psychological characteristic; it is defined as the belief a person success depends entirely in their actions and not external forces (Luthans & Ibrayeva, 2006; Naushad & Malik, 2018). According to Contreras et al. (2017), Locus of Control is the most common personality trait associated with Entrepreneurial Intentions (Turkina & Thanh, 2015).

According to Hansemark (1998), human behavior theories stated that:

People will attribute the reason to why something happens, either to themselves or the external environment. Those who appear to have control over occurrences have an Internal Locus of Control, referred to as Internal. People who seem to think the control over what happens relies on external forces have an External Locus of Control and will be referred to as external. (p. 35)

The literature suggests that the inclination towards risk (Rohrmann, 1997) and an Internal Locus of Control (Schjoedt & Shaver, 2012) are related with Entrepreneurial Characteristics (Rosique et al., 2017). Several studies findings mentioned that Entrepreneurial Intention is related to personal belief in the ability to exert control in a social context (Contreras et al., 2017).

The utilized definition of LOC in this study is the one stated by Rotter (1966), which described if a person perceives an outcome is the result of luck, fate or convincing others surrounding him more than results of actions of his own, this belief is label as external control. On the other hand, if a person perceives an event is the result of his behavior or his relative permanent characteristics, this is a belief label as an internal control (Lumpkin, 1985).

The Theory of Planned Behavior by Azjen (1985), explained that perceived control and internalized social norms influence the intention to adopt or perform a specific behavior (Naushad

& Malik, 2018). Azjen (1991) confirmed that 50 percent of intention deviations are explained by attitudes, which influence 30 percent of the behavior variance. Fishbein and Azjen (2010) findings stated that the formation of intentions is influenced by the definition process of an individual’s beliefs, which are controlled by their environment. Also, Individuals focused on achieving long-term goals have a higher motivation to overcome uncertainty or unexpected interferences since the perceived direct control over the outcomes is identified as an intrinsic reward (Roy & Das, 2017).

Likewise, Karimi at al. (2017) mentioned that individuals with low confidence of controlling their surroundings tend to avoid entrepreneurial activities or the risk of creating a new firm (Mueller &

Thomas, 2001). Do, and Dadvari (2017) explained that Personality Traits could be considered as a motivator towards Entrepreneurial intention (Shane, Locke, & Collins, 2003), stating that Locus of Control, Risk-Behavior and the desire of achieving established goals are elements that predict Entrepreneurial Intentions. Also, Ahmed (1985) proved that the main difference between entrepreneurs and non-entrepreneurs are cultural values, personality traits such as LOC, inclination

towards risks, and the desire for achieving long-term outcomes. Those are factors that motivate entrepreneurs in the creation process of a new venture (Lynn, 1969; McClelland, 1961).

Following Thomas, Sorensen, and Eby (2006), people desire control over each situation of their lives. In simple words, control over the external environment can be considered as an intrinsic human need since it is psychologically beneficial. Regarding the relationship between LOC and motivation, the mentioned authors stated that “the psychological need for self-determination and competence are the basic intrinsic motivation” (p. 1060). That means that individuals with an internal Locus of Control perceived themselves as choice-making agents who are competent in maintaining control over their context, and that leads to a stronger need of self-determination to achieve any goal. In accordance to Milton (1989), entrepreneurs are those “who have certain psychological characteristics such as commitment to their work, a need for total control and a linking for uncertainty and challenge” (Ferreira, Raposo, Rodrigues, Dinis, & Paço, 2012, p.426).

Also, personality traits like Locus of Control play an essential role in the process of creating a new business (Karimi et al., 2017). As mentioned by Ahmed (1985), "Risk-Taking propensity and Internal-External Locus of Control seem to have received much attention in entrepreneurial studies" (p. 781). Since the literature attributes importance to cultural and personality factors in the explanation of Entrepreneurial Intention, the author decided to include variables related with an individual's culture, variables that measure a person desire to achieve long-term goals and their willingness to feel comfortable taking risks, and variables related to an individual's personality characteristics.

The general author idea states that to create a new business a person needs to take a chance or go through uncertain situations; this can only be done if the person feels confident about his/her abilities influencing the possibilities of the outcome. Therefore, individuals with an internal locus of control should have a higher level of intention to engage in entrepreneurial activities since they believe the success or failure of their business depends on their own hands. Also, an individual who desires to be part of that process should need accomplishing long-term goals. As such, individuals with a high level of Long-Term Orientation should have an even higher intention to

在文檔中 The Impact of Long-Term Orientation and Uncertainty Avoidance on Entrepreneurial Intention: The Moderating Role of Locus of Control (頁 18-28)