Importancia 18

The following section looks into the success factors of ethnic small businesses. The reason for inclusion of this section is to provide an insight into how well ethnic immigrants have performed in small businesses in host countries around the world. These points relate to the next chapter, which develops a conceptual framework for interpreting sustainability levels based on these success factors.

Osborne (1993), Ray (1993) and Teng, Bhatia and Anwar (2011) have looked into what constitutes sustainability in terms of business success in a small business. Osborne (1993) recommended a shift from a focus on the personality of the business owner to the firm’s underlying business concept and capacity to accumulate capital. Osborne suggested that the business owner needs to have prior understanding of how customers will assess the products and must have sufficient capital when starting up a business. In addition, Ray (1993) suggests that there is no ideal personality type or marginal set of attributes that guarantee success for a new venture. According to Ray (1993), three key elements must be addressed: personality or attributes; background and experience; and skills. The probability of launching a successful business is not based on a fixed set of attributes but on an infinite variety of combinations in which an individual’s positive attributes might outweigh their negative attributes. In a recent study, Teng et al. (2011), investigated small businesses in Singapore and found that the overall contribution to sustainability in the lead-up to business success can be found from employment training, prevalence of good products and services and excellent relationships with customers.

It has been claimed that with respect to ethnic businesses, ongoing sustainability “lies in their ability to branch out from their ethnic enclave economy” (Basu & Goswami 1999a, p. 253). More generally, Altinay and Altinay (2008) argue that it is important for ethnic minority small business owners to effectively manage their relationship with their local market. They suggest that, irrespective of their ethnic origin, the ethnic small business owner needs to analyse both their internal and external business environments, in order to be able to achieve sustainable growth. Furthermore, they have found that the growth of Chinese entrepreneurship is a direct result of hard work, reliance on family labour and

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community networks. On the other hand, the Lebanese migrants, who arrived in the post-war period as a chain migration sponsored processes, appear to have been employed as unskilled workers in Australia. However, some Lebanese migrants did initially go into small business and became quite successful, most prominently in the clothing industry.

Chaudhry and Crick (2004) examined the successful entrepreneurs in the UK, in particular using a case study of Indian entrepreneurs. Their study found that people from an ethnic background tend to move into self-employment because of the need for ‘independence’ and ‘autonomy’. The need for Indians to focus on successful ethnic entrepreneurs was to facilitate entrepreneurial activities and to act as role models for the other immigrant groups (Chaudhry & Crick, 2004). Their studies concluded that the success of the Indian entrepreneur was attributed to breaking out of serving their cultural mainstream market and addressing the wider market community. They found that ethnic minority groups tend to move into self-employment because of a preference for independence and autonomy. This preference may assist in maintaining a particular lifestyle. Their findings are consistent with that of Basu and Goswami (1999b) who found serving non-Asian customers may have contributed to their success and the constant product improvement and employee training has influenced their growth.

This study by Basu and Goswami (1999b) identified the factors influencing South Asian entrepreneurial expansion in UK and this validates conventional insight which attributes their success to cultural factors. The authors suggest that entrepreneurial growth depends positively on educational attainment, hard work in the initial stages, personal savings invested at start-up, owners with prior work experiences, and the delegation of responsibilities to non-family members. Similarly, Chavan and Agrawal (2002) studied the changing role of ethnic entrepreneurs in Australia. Their research revealed the use of language, ethnic skills, resources and networks for economic benefit had made the ethnic entrepreneur accustomed to these factors for entering into and succeeding in small business. On the other hand, some authors view business success from an entirely different perspective. For example, Osborne (1993), in a study of entrepreneurial success, rejects the idea that success is originated from the owner’s competence. He recommends a shift in focus on the personality characteristics of the business owner to the firm’s underlying business concept and capacity to accumulate capital. In starting a business, he further suggests that entrepreneurs should start or buy a business which

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has a hospitable environment, understand the economics in which the firm operates and be cautious about starting a business where capital requirements are exorbitant.

As highlighted in the literature review, a multitude of factors can impact on the business outcomes. In this section, we discuss the literature which is pertinent to certain business performance namely, success. Research has sought to discover if there are any clear characteristics shared by owners of small businesses that distinguish them from other members of the population and what characteristics are conducive to small business success. The general conclusion appears to be that there is no simple pattern. Rather, the evidence points towards a complex set of interrelated factors that increase or decrease the chance that the individual will become the owner of a successful small business (Stanworth & Gray, 1991). Ray (1993) suggests that there is no ideal type of personal factors that guarantee success for a new venture. In order to understand why some are more successful than others, according to this author, there are three key elements: personal attribute, background experience and skills. Finally he points out that the probability of launching a successful business is not based on a fixed set of factors but a variety of combinations in which individuals can possess.