- Open Access
Ethnic minority entrepreneurship: an examination of Pakistani entrepreneurs in the UK
Journal of Innovation and Entrepreneurship volume 4, Article number: 2 (2015)
This paper discusses the findings from a pilot study which forms part of a larger, on-going study considering the nature of family dynamics in ethnic minority-owned family businesses based in the UK. The paper explains the cultural theoretical framework for the study and highlights some of the cultural aspects identified in one Pakistani family business.
Ethnic minority entrepreneurs, including those of Pakistani, Indian, Asian and Caribbean descent, are making significant contributions to UK economic development. Previous studies (JEMS 27(2), 241–258, 2001; http://ssrn.com/abstract=1496219, 1990) have shown that in the UK, the number of ethnic minority start-ups is high compared to other groups. However, the contribution of migrant entrepreneurs has been largely neglected by both entrepreneurship researchers (EURS 11(1), 27–46, 2004; EPGP 7(1), 153–172, 1989) and family business researchers.
The unit of study for the investigation is the family. Investigations where the family is the unit of study are relatively unusual in the family business literature, and there have been recent calls for more studies of this type (FBR 22, 216–219, 2009). This study extends the work of (IJEBR 10(1/2), 12–33, 2004) by looking in depth at the impact of culture and family on entrepreneurial aspirations in the context of UK-based, Pakistani, family-owned businesses.
The pilot study sought to determine the entrepreneurial nature of Pakistani family businesses based in the UK, focusing particularly on the cultural aspects of the family in order to understand the differences between the Pakistani and UK contexts.
This study contributes to our knowledge as it is, as far as the authors are aware, the first case study to focus on the family in a Pakistani family business in the UK SME sector. It not only explores the cultural and individual struggles experienced by the brothers in the family but also exposes the extreme work-life imbalance that exists in small, family-run businesses and demonstrates the effects that this has on all involved. It offers a unique insight into the business culture and personal culture in a Pakistani-owned family firm, thereby casting light on an aspect of British Pakistani life which is currently under-researched.
This paper discusses the findings from a pilot study which is part of a larger, ongoing study investigating the nature of family dynamics in ethnic minority-owned family businesses in the UK. Ethnic minority entrepreneurs, including those of Pakistani, Indian, Asian and Caribbean descent, are making significant contributions to UK economic development. Previous studies (Barrett et al., 2001; Waldinger et al., 1990) have shown that in the UK, the number of ethnic minority start-ups is high compared to other groups, but the contribution of migrant entrepreneurs has been largely neglected by both entrepreneurship researchers (Williams et al., 2004; Keeble, 1989) and family business researchers. This paper explains the cultural theoretical framework behind the study and explores the cultural aspects of one Pakistani family business.
Okazaki and Sue (1995) suggest there is no single, universally accepted definition of ethnicity, race or culture, and that these terms are often used interchangeably (Betancourt and Lopez, 1993). Eaton (1980:160) defines ethnic status as an easily identifiable characteristic that implies a common cultural history with others possessing the same characteristic. The most common ethnic identifiers are race, religion, country of origin, language, and/or cultural background. Capotorti (1991:568) defines an ethnic minority as a:
"group numerically inferior to the rest of the population of a State, in a non-dominant position, whose members being nationals of the State possess ethnic, religious or linguistic characteristics differing from those of the rest of the population and show, if only implicitly, a sense of solidarity, directed towards preserving their culture, tradition, religion or language."
This research follows Călin and Dumitrana’s (2001) definition of an ethnic minority as a group that is identified by "cultural practices different from those belonging to the basic population". In this case, the basic population is British.
With seven million people across 140 countries, Pakistan has a large diaspora (Rogers, 2013). Over one million of these live in the UK, making it the second largest community of overseas Pakistanis in the world after Saudi Arabia. As the second largest ethnic minority in the UK, Pakistanis make a rich contribution to the cultural, political and entrepreneurial life of the country. The community has a substantial socio-economic impact; a significant number of Pakistanis have set up their own businesses, some of which turn over millions of pounds. The companies often employ nuclear and extended family members and are over 90 per cent Muslim (Telegraph, 2011). Many Britons see the Pakistani community as poorly integrated, but it also has a reputation for entrepreneurship, hard work and economic independence. It is, however, a source of significant national insecurity, as some of the most serious terrorist threats to Britain still emanate from Pakistan and Afghanistan (Rogers, 2013). Rogers (2013:1) argues that:
“The diaspora is […] an important currency of engagement and ‘soft power’ between Britain and Pakistan itself, whose importance to UK foreign policy could hardly be overstated, from trade and Afghan reconstruction to nuclear proliferation, radical Islam and great power rivalry in Asia.”
It is important to define what we mean by the “Pakistani community”. It should not be assumed that the UK Pakistani community is entirely homogeneous; it varies along lines of regional origin in Pakistan (rural/urban), place of residence in the UK (North/South), class, education and occupation (there is a strong working-class/middle-class polarization). A range of languages are spoken, though most UK Pakistanis speak Punjabi or one of its dialects and not Urdu. The majority of economically active British Pakistanis work in the transport/taxi service or are self-employed shop owners, while the majority of British Pakistani women work at home (QCA, 2009). Though this is seen as an entrepreneurial community, the percentage of Pakistani families on a low income is higher (66 per cent) than any other ethnic group, including White British (21 per cent) (OFCOM, 2007).
Over 3 million UK firms are family-owned businessesa. Ethnic entrepreneurship and family business is an area of increasing interest to both academics and practitioners as the numbers of migrants rise, but while research has been conducted on start-ups by entrepreneurial migrants (ibid), there is little research available on micro-businesses (Devins et al., 2005) owned by migrant families. There are a number of reasons for this; cultural and language barriers make gaining access problematic, but there is also the added difficulty of building the trust needed to enable a proper investigation. Despite the significant contribution Pakistani entrepreneurs make to UK society, not much is known about their entrepreneurial ventures, their values or how they run their businesses. This is therefore the focus of this study. It poses the research question: What is it like to be a Pakistani entrepreneur working within a family business in the UK? It seeks to understand the daily interactions within these businesses and the implications of these interactions for both the business and the family. The investigation is unusual in adopting the family as the unit of study. In this respect, it may be seen as a response to recent calls for more studies of this type (Dyer and Dyer, 2009).
This pilot study sought to gain an in-depth understanding of how one family business is run on a day-to-day basis. The research makes a significant contribution to our knowledge as it is, as far as the authors are aware, the first in-depth case study of brothers in a Pakistani family firm in the UK SME sector. As such, it offers a unique and novel insight into both the family business culture and the personal culture of the participants. It is important to note that this research follows the family’s own definition of what is meant by the term “brother”. Unlike Western society, where brothers (be they biological, adopted or step-brothers) share at least one parent or guardian, in Asian, African and Middle Eastern cultures, the term relates to the general family bloodline. Thus, cousins are often described as brothers and sisters, while family friends are called aunts and uncles as a sign of respect.
Researchers including Hofstede (1980), Trompenaars and Hampden-Turner (1993), Kluckholn and Strodtbeck (1961) and Hall and Hall (1990) have used a range of dimensions to compare and categorize cultural values. However, critics of cross-cultural research, including Earley (2002), McSweeney (2002) and Søderberg and Holden (2002), argue that culture cannot be reduced to a few dimensions. Others question the validity of using “average scores” to explain “individual attitudes and behaviours” (Clegg et al., cited in French, 2007:59) on the grounds that values are not universal but national (Tayeb, 2003:54). Even these national values may be an unreliable yardstick – cultural homogeneity may be undermined by a range of “subculture groups” or the existence of “socially dominant and inferior” cultures (Mead, 2005:48). Nor can we assume that “national territory and the limits of the culture correspond” (Mead, 2005:59). However, the limitations of the concept notwithstanding, examining family businesses from the perspective of culture may enrich our understanding of their management and entrepreneurial styles.
Statements such as: “Business is inherently competitive and, [… ] there will always be winners and losers” (Nelson, 1999:20) appear to endorse a more competitive, individualistic British society, but this attitude is not always reflected in family businesses, whether they are British or Pakistani. This case study aims to give an in-depth understanding of the various culture managing systems and stereotypical differences between the British and Pakistanis. It supports Earley’s (2002) view that what is required is more research “based on the concept of culture … whereby an individual is subject to a number of influences” (Browaeys and Price, 2008:107).
The concept of culture
There appears to be no general consensus as to the definition of culture. While cross-cultural researchers such as Hofstede speak of “collective programming of the mind” (Browaeys and Price, 2008:11), Trompenaars and Hampden-Turner describe culture as “the way in which a group of people solves problems and reconciles dilemmas”. The same authors (1997) agree with Hofstede that cultures should be thought of as circular rather than linear. They should not be located at the high, low or middle point of a dimension but understood as moving up and down the continuum according to the dilemmas they encounter (Browaeys and Price, 2008:87). Schein states that: “Culture is a set of basic assumptions” (Browaeys and Price, 2008:15), while Bodley (1994:9) describes the concept as having topical, historical, behavioural, normative, functional, mental, structural and symbolic meanings.
Schneider and Barsoux’s cross cultural model divides cultural attributes into three groups: observable and tangible, norms and values and basic assumptions, but Earley (2002:925) argues that: “Culture is not a value or set of values; culture is the meaning which we attach to aspects of the world around us”. Surprisingly, this is echoed by Hofstede (2002:5), who states that: “[Cultures, values and dimensions] are constructs which have to prove their usefulness by their ability to explain and predict behaviour”.
Models of culture
Various cross-cultural models exist, including those by Hofstede (1980) and Trompenaars and Hampden-Turner. Hofstede (1980) developed a model employing four dimensions: power distance; individualism vs. collectivism; masculinity vs. femininity; and uncertainty avoidance. He later added a fifth dimension: long-term orientation vs. short-term orientation. Trompenaars and Hampden-Turner posited a seven dimension model: universalism vs. particularism; analysing vs. integrating; individualism vs. communitarianism; inner-directed vs. outer-directed; time as sequence vs. time as synchronization; achieved vs. ascribed status; and equality vs. hierarchy. Browaeys and Price (2008) subsequently developed Trompenaars and Hampden-Turner‘s model to create a new model with eight dimensions: time focus (monochronic/polychronic); structure (individualism or collectivism); power (hierarchy or equality); communication (high-context or low-context); time orientation (past, present or future); competitiveness; space (public or private); and activity (doing or being).
Hofstede (1980) was one of the first to research differences across national cultures in the management field, developing a dimensional approach to compare and explain the influence of cultural attributes on management style. However, he has been criticized by MacSweeney (2002) and Tayeb for his choice of methodology (attitude-survey questionnaires) and by Robinson for selecting a sample that was strongly influenced by US organizational culture. Trompenaars and Woolliams (2003) argue that organizations are driven by the corporate culture, but Hofstede’s view is that: "The values of employees cannot be changed by an employer". This view has been echoed by Laurent (1983), and more recently by researchers in the GLOBE projectb, who assert that: “National culture remains dominant within the organization”. Hofstede has also been criticized on the grounds that his research may itself have been culturally biased. It has been suggested that by focusing only on IBM managers and then taking the mean from his quantitative data sample for each country, anomalies in country dimensions may have appeared. Trompenaars’ research, for example, suggests that German culture is more hierarchical than Hofstede’s findings suggest. Finally, Mead has stated that the advance of globalization has rendered Hofstede’s research out of date. However, most researchers agree with Browaeys and Price (2008:11) that even though a culture is “bound to vary” and “an (organisational) culture is never static”, these changes take place so slowly that an overall consistency is maintained.
Initially, Trompenaars (1993) studied a range of cultures, looking at three key areas: relations to other people, time and the environment. He identified five dimensions to describe a culture’s attitude to social relationships: universalism vs. particularism, individualism vs. collectivism, neutral vs. affective relationships, specific vs. diffuse relationships, and achievement vs. ascription. The remaining two dimensions describe attitudes to time (sequential vs. synchronic) and the environment (inner-directed vs. outer-directed) (Browaeys and Price, 2008:82). This was later refined in his work Trompenaars and Hampden-Turner, where some of the dimension descriptions changed. Trompenaars (1993) shares Hofstede’s opinion that: “Much of management behaviour is culturally determined”, and one could argue that Trompenaars’ seven dimensions are a development of Hofstede’s five, but there are some fundamental differences in the idea of culture and the subsequent realisation of dimensions. Therefore, Trompenaars’ study should be seen as a complement to Hofstede’s, not as a replacement. Hall and Hall (1990) used a different approach and collected data which indicate countries or societies but did not conduct systematic research or scores for individual countries like Hofstede's. Despite these differences in data collection and ideas Gooderham and Nordhaug (2003:144) suggest ‘some dimensions can be compared on account of their similarity’.
Browaeys and Price (2008) drew on the work of a number of other theorists, including Hofstede (1980), Hall and Hall (1990) and Trompenaars (1993), to construct a model which identifies eight dimensions and links them to specific managerial tasks – something no one else had done. The result offers a useful link between theory and practice, as well as highlighting the overlapping cultural theories. However, practitioners should be aware of the limitations of the classification systems devised by Browaeys and Price and others.
Browaeys and Price (2008) model has these dimensions:
Time focus (monochronic/polychronic),
Structure (individualism or collectivism),
Power (hierarchy and equality),
Communication (high-context or low-context),
Time orientation (past, present and future),
Space (public or private),
Activity (action: doing or being).
Though a useful guide, Browaeys and Price’s bi-polar extremes provide are a collective generalization of culture. Any such assessment needs to take into account the sometimes complex mix of cultural influences which individuals encounter in the modern world. Whether one has lived in one or several countries, religion and society the experience may influence the development of one’s cultural identity, however collectivistic one’s family orientation. As Søderberg and Holden (2002) put it: “Every individual embodies a unique combination of personal, cultural and social experiences”. Globalization and advancing technology make it even less likely that groups of people such as those in this study will be culturally homogenous, but Browaeys and Price’s model does not consider this.
It would appear that more in-depth research is needed with a view to incorporating more variables. Earley (2006) suggests this research should be based on a “psychological construct whereby an individual is subject to a number of influences” (Browaeys and Price, 2008: 107). This would allow the investigation of inter-cultural relationships and sub-cultural influences and cover the need for the development of theories and frameworks that “link culture to action” (Earley, 2006: 928). Nonetheless, Browaeys and Price give a concise and helpful overview which can help develop our understanding of the phenomena as a guideline. Improving the understanding of this phenomena and how relationships work may improve relationships and profitability a company. In the next few paragraphs we describe in detail the elements of the Browaeys and Price’s model.
Overview of each dimension of browaeys and price’s model
Browaeys and Price (2008) draw on Hall and Hall’s (1990) concept of polychronic versus monochronic time orientation which describes how different cultures relate to time and various managerial tasks. According Hall and Hall (1990), monochronic cultures are those in which people attend to one activity at a time, work in a linear fashion and focus on tasks as opposed to people, while polychronic cultures are more flexible, with people taking priority over rigid time management or schedules. Trompenaars (1993) also describes time focus in terms of two dimensions: sequential and synchronic relationships. In the sequential relationship, time is perceived as tangible and one activity is done at a time; synchronic-oriented cultures perceive time to be intangible, flexible and variable.
These observations appear to confirm each other’s relevance and validity. Time focus is also related to other dimensions such as space and competitiveness; a strongly monochronic culture that works systematically is likely to guard its personal space and therefore be individualistic in orientation. Contrastingly, polychronic cultures are more likely to show the same flexibility and openness in regard to space as they do to time, and to be more group- or collectively-oriented. A modern manager may be advised to pay attention to the strong differences in time focus; asking a monochronic person to complete several tasks at once may lead to frustration, while a polychronic person may feel too controlled and repressed by tight, detailed schedules and tasks.
The time dimension appears to be very critical in culture as many researchers have developed similar dimensions. While Browaeys and Price explicitly quote Hall and Hall’s (1990) time orientations, the definition is very similar to that of Kluckholn and Strodtbeck (1961) time orientation. Equally, there is an overlap in definition to Hofstede’s (1980) fifth dimension of time. Similarly, Hall and Hall (1990) consider time and suggest “emphasize the importance of knowing which parts of the time frame are given prominence” (Browaeys and Price, 2008:98). The past, present and future may be given different degrees of emphasis. From the managerial point of view, it is important to be aware of previous patterns or traditions; breaking with tradition and being too visionary or, on the other hand, being too traditional can both damage a manager’s rapport with others in the organization, with potentially adverse consequences for company performance.
Many researchers attribute importance to how a culture approaches the issues of equality and hierarchy. Hofstede (1980) uses the term power distance to describe the distance between individuals within a hierarchy, while Kluckholn and Strodtbeck (1961) call this dimension relational orientation and use it to describe an individual’s relationship to other individuals. The power dimension is related to proximity; more hierarchical societies tend to be more private with their space, monochronic in their handling of tasks and structurally more competitive. In contrast, egalitarian societies are more likely to tolerate having less personal space and to be more collectively- or group-oriented. Recognizing the effect of the power dimension on employee relationships, some companies, such as Nokia (Merriden, 2001:36), have abandoned the traditional hierarchical corporate structure to employ a flat hierarchy.
Browaeys and Price (2008:100) suggest that competitive cultures aim to acquire wealth, while co-operative cultures gain satisfaction through building relationships and consensus. Hofstede (1980), meanwhile, associates competitiveness with gender, identifying masculinity with the celebration of achievement and femininity with sympathy for the loser. His individualism dimension runs from individualistic (decisions are based on tasks) to collectivistic (decisions based on relationships). Similarly, Trompenaars (1993) sets individualism (the pursuit of personal goals) against collectivism (the pursuit of group goals), overlapping this dimension with the specific (relationship-oriented) versus diffuse (task-oriented) relationship dimension to describe competitiveness. Kluckholn and Strodtbeck’s (1961) concept of relational orientation may also be used to describe potential for competiveness within individual relationships.
According to Le Boteuf (1994: 24), ”The good manager is not the one who exhibits the same behaviour in all circumstances, but the one who knows how to modify management strategy according to the situations encountered”. Thus, in a competitive culture, a good manager will give out smaller, individual tasks and offer individual incentives, while in a more cooperative culture, he will give group rewards.
Kluckholn and Strodtbeck’s (1961) model posits that “doers” focus on efficiency and like to be measured, while those focused on “being” are more interested in being effective and adaptable, and being more “in the moment”. Other researcher have used time orientation highlights spontaneity ‘given in human personality’ (Browaeys and Price 2008:102), or . achievement versus ascription. This overlap shows its importance of the dimension, with the implications for a manager being similar to those of the power orientation. A manager working in a more doing-oriented culture will find it advisable to give out clear responsibilities and tasks.
Browaeys and Price (2008) draw on Trompenaars’ (1993) contrast between specific culture, where space is shared freely, and diffuse culture, where formality prevails. Though it should be noted throughout the literature review the overlapping of dimensions has been noted. Hall and Hall (1990) are most associated with proxemics; their work similar to Hofstede’s (1980), especially his power distance index, which related to space. This independently found dimensions strengthen the importance of awareness around this dimension.
Pease and Pease (2004) argues that we can’t not communicate, as meaning is transmitted via body language and facial expression even when we are not speaking. Browaeys and Price’s (2008:103) communication orientation is therefore vital for any business, as from the very first second, whether in person, via phone or e-mail, the business is communicating with its stakeholders. Browaeys and Price follow Hall and Hall (1990) in distinguishing between low- and high-context communication; low-context messages and tasks are highly detailed and explicit, while in high-context communication, much is left unsaid in order to avoid confrontation. Employees from high-context cultures may feel threatened by a low-context-oriented manager who gives them explicit responsibilities and detailed schedules, while low-context employees may feel unsure and badly led by a high-context manager who seems more concerned with preserving harmony. Finally, since tone and body language can be misinterpreted, managers must take care to interact appropriately with their colleagues.
Browaeys and Price (2008:105) developed Kluckholn and Strodtbeck’s (1961) “I” versus “we” dimension, where “ I” represents the encouragement of independence and individualism and the pursuit of personal goals and achievements, and “we” represents the promotion of conformity and collectivism. As with Hofstede’s (1980) and Trompenaars’ (1993) individualism dimensions, “I” prioritizes the task over harmony and group relationships, while “we” prioritizes social skills and the group. Highly structured tasks and individual opinions may cause distress in a collectivistic culture that prizes sharing and group decision making and accepts deviations from the standard way of working, thinking or behaving. As with previous orientations, this orientation should not be seen in isolation, it overlaps with other orientations namely power, time and space.
Browaeys and Price (2008) different orientations illustrate different perspectives which managers need to be aware. These orientations will used to highlight the different perspectives within a Pakistani family business in order to develop a deeper understanding of UK based Pakistani businesses.
The pilot stage of the research involved investigating Pakistani family businesses with a view to identifying candidates for future in-depth study. Because of the exploratory nature of the research, it was decided to adopt a qualitative approach. The chosen method was the in-depth case study, with the target group being Pakistani family businesses owned by brothers. Following Yin, the pilot case study was conducted to refine the data collection arrangements. This study, which employed convenience sampling and the single case design, was conceived as an instrumental case study:
“Instrumental case studies examine a particular case to provide insight into an issue or refinement of theory. The case is of secondary interest; it plays a supporting role, facilitating our understanding of something else. The case is often looked at in depth, its contexts scrutinized, its ordinary activities detailed, but because this helps us pursue the external interest. The case may be seen as typical of other cases or not. The choice of case is made because it is expected to advance our understanding of that other interest.”
The sampling process involved approaching a number of UK-based, Pakistani micro-enterprises located within two ethnic business clusters in Southampton. This direct approach, although time-intensive, allowed us to identify the ethnic origins of the firms and whether they fitted the family firm criteria (two or more family members own and/or work in the business). Owners had to be UK-based and have time to take part in an in-depth interview, and they had to understand and speak sufficient English to be able to communicate with the researchers and understand the interview questions. Families were therefore selected using convenience sampling. It should be noted here that the interviewer was a white, female, non-religious English speaker. This might have led to self-selecting bias. The two clusters produced only three companies that fitted the criteria and were willing to be interviewed.
The pilot study focused on one of these businesses – a retail food shop owned and run by three male members of one extended family. Each was willing to be interviewed privately with the guarantee of anonymity for both their business and themselves (from other family members). The semi-structured interviews were designed to gain knowledge of the individual and their background, the business and its ownership, the effect of the business on the family and their future plans for both family and business. Our frequent meetings during the exploratory stage (during which participation was sought from all family members), the arranging of meetings and the actual meetings themselves all afforded opportunities for me to build trust with the participants, enabling even richer data to be gathered.
Pakistan has nearly three times the population of the UK and is over three times its size. GNI per capita stands at 1/40 of that of the UK and life expectancy for both men and women is more than 10 years less in Pakistan than in the UK. Table 1 shows the major characteristics of the UK and Pakistan side-by-side for comparison.
The family business in the pilot study is actually owned by three separate families from three very different backgrounds. They are working together to secure the livelihood of two families and protect the investment of the third. Brothers B and C both moved to the UK as adults. Both came for family reasons: Brother C was responding to an Uncle’s call and the promise of a better future for him and his family; Brother B gave up his PhD studies in Germany to join his wife, who was already in the UK, because she wished to start a family. Brother A moved to the UK aged 6 and completed all his education here. He has been integrated into British society ever since, as have all his children. It is worth noting at this point that during the interviews, each of the brothers sought reassurance that the others would not find out what they had said about them. This dynamic was very interesting; although they trusted me and wanted to help with my research, they were unwilling to share their true feelings with their family. This might appear to be a double standard, but in the Muslim world, a man neither complains about nor criticizes his family – neither to close family nor the outside world. Even issues seen, either by other family members or outsiders, are never directly discussed and confrontation is avoided.
Brother A (Z) is an engineer who has worked for 32 years for the same company; he had never been self-employed or owned a business until 18 months ago. He became involved in the business at the request of his wife, who is Brother B’s sister. He currently works four days at his full-time job and three days in the shop. He was adamant in the interview that if he had known what was involved beforehand, he would never have become involved in the business, but as it is family, he can neither back out nor change the situation. Working seven days a week has had an effect on his private life; he sees his wife and children less often and has no free time. Although he expressed regret about becoming involved, he is still supportive of the business. This support is predominantly financial, but he also gives his labour, as the business cannot yet afford to take on more staff. His motivation is predominantly financial and extrinsic; he has no particular pride at being involved in the family business. Brother A has four children: a 21 year old who has just completed a law degree, an 18 year old, a 13 year old and a seven year old. He stated that his family is very understanding about the time he spends in the business, but he regrets not being able to spend more time with them. The children, who live some distance away, show no particular interest in the business, though one of the son’s sometimes help out, though his son’s motivations are not known. While he stated that he would not actively discourage their interest in the business, he thinks that a small business is a lot of hard work. Though it might be financially rewarding in the long term, the last 18 months have been mentally, physically and financially challenging (Table 3)
Brother B (T) came to the UK after completing a degree in Pakistan and starting a Doctoral degree in Germany. He worked in the public sector for 11 years before being made redundant and starting up a series of businesses with Brother C. This is their third business together; previous businesses included a cash and carry and a pizza delivery service. He has been involved with the food shop for three years, since the original six partners split up over accusations of mismanagement and corruption. Along with Brother C, who was already involved, he decided to seek help from Brother A (B’s brother-in-law) to keep the shop going. Brother B regularly works 4 AM to 10 PM in the business, he feels this is warranted because he is building a future for his children (though he does not think that they should get involved in the business). He feels his family is very supportive and that they recognize that he is building a foundation for their future, so he sees his time in the business as being well invested. His wife stays at home with his children, where he feels she belongs.
Brother C (C) is a serial entrepreneur whose previous businesses include a kebab/pizza shop. His main reason for going into business with his brothers-in-law is the trust he has in them. Trust is needed as “each person puts in long hours and has to make sacrifices”; he feels this is only possible with family. He left school with no formal qualifications and has had no further education. His wife, who is a qualified dental nurse, plays no part in the business but prefers to stay at home to look after the children. Working long hours means his family life suffers as he misses his children growing up (leaving before they wake up and returning when they are asleep) as well as quality time with his friends, wife, children or himself, but he has no regrets and sees this as an important step for the future. He anticipates that it will take another 18 months of work before the business is running smoothly. So there is something here about sacrifice being a cultural value in this family.
The fact that Brothers B and C came to the UK after years of living in other countries may partly explain why their motivation for starting the business differs from that of Brother A, who has lived in the UK since the age of six. Brothers B and C are strongly intrinsically motivated to give their children a better future, while Brother A sees the business as simply an investment that has been neither as profitable nor as quick to make a return as he anticipated. It was very obvious from Brother A’s interview that business is only discussed on the premises or on the phone; it is not a subject for kitchen table discussion and certainly not something to be discussed at a family event. As he put it: "I forget it when I leave here"(Brother A).
Finally, although the children of all three ‘brothers’ are encouraged to pursue their studies and, to varying degrees, discouraged from working in the family business, it was very clear that if they need a job and are unable to find something suitable elsewhere, the business will absorb them or the family will help them start their own business.
The family business is a large Asian food shop in the south of the UK. The shop was started three years ago but has only been owned by the family for 18 months. It stocks more than 4000 different products from Africa, India, Pakistan, Poland and elsewhere. Fresh produce is bought daily in the London markets, while dry and tinned cans are delivered to the store as needed. Sixty per cent of sales are to restaurants and shops (business to business/B2B) and 40 per cent to retail customers. Nearly all the B2B sales are to family members and members of the Pakistani community. This means payment terms are lax; the business has extended £20k-60k of credit (depending on which brother you speak to). This policy does not just operate with B2B customers; customers in the shop can also ask to defer payment for goods. Requests for credit over £1k generally warrant a handwritten note which is stuck to the wall, but generally, customers of all nationalities and backgrounds are trusted to pay later.
The shop has four full-time employees and eight part-time employees, all of whom are male. Male staff are necessary because they must be able to lift loads of up to 40kg. Proficiency in languages such as Bengali is considered an advantage for employees. While turnover is between £300k and £400k, actual profit is much less. Brother C pointed out that on fresh chicken the profit margin is 12 pence per kilo, while on canned goods it can be up to 75 pence. Brother A was unaware of the margins under which the shop operates. He was aware only that until the debts left by the previous tenants (also members of the extended family) are paid off, profit will remain low. As these debts are family debts, they are accepted by the brothers without complaint.
The business has a competitive advantage in that it is able to offer an ordering service to restaurants and shops, delivering what they want fresh from the London markets on a daily basis. It survives because of the revenue generated by this B2B business, because it is established within the market and because it offers lenient payment terms. However, other members of the extended family want to open up a similar shop nearby. This will mean that within 30 m2 there will be three specialist food shops offering Polish, Indian, Bangladeshi, African and halal food. Each of the brothers said they would never tell their cousins not to open up a shop, but they felt that either the council or some other external partner should have intervened as they fear for their business. They have no choice but to resign themselves to the new competition: “The family have every right to do it so what can you do?” (Brother C)
Table 4 summarizes other aspects of the business profile, as perceived by the three interviewees.
The brothers demonstrated a strong orientation towards the present with comments like: “I have no time, now is when everything happens”. This orientation is associated with Pakistani culture (see Table 2). A strongly past-oriented person may find this difficult to understand. The Brother A was more present- and future-oriented than expected based on the literature. Kluckholn and Strodtbeck (1961) describe those individuals who do not fit into prevailing cultural patterns as “cultural deviants” (Silverthorne, 2005:34).
That the brothers are also future-oriented was reflected in their belief that they will eventually make a profit and be able to employ more staff, and in their acceptance of the fact that nothing comes easily or quickly. Their commitment to achieving their long-term goals was further indicated by their willingness to change if necessary to respond to customers’ wishes or shifts in the market. The brothers have no overall, coherent business vision, but their general aim is to earn enough money to be able to employ more people so they can work fewer hours themselves. However, there is no written plan, nor could anyone quantify how much money will be “enough”.
Brother A seemed to be more oriented towards the past, as he talked about missing the days when he had free time to spend with his friends and family and to enjoy hobbies. However, this was not shared by the other brothers, who preferred to talk about building a brighter future for their children. This may indicate that they are focused on long-term achievements and benefits, but it may also indicate that they did not want to be seen to be complaining.
There is clearly a collectivist culture within the family. This was especially evident when they were talking about how they supported each other when setting up the shop. All of the brothers had something to say about this collectivistic tendency. Brother A, for example, described how he had tried to remain uninvolved in the new business, only to realize that this would not be allowed. He claimed that he had only invested in the new business because he was put under pressure. His attempts to be more individualist collapsed and he was forced to bow to the pressure of collectivism because his involvement was deemed to be for the good of the family as a whole.
There is a clear power structure within the brothers, with the eldest being most respected, and within the shop, where the three owners are clearly in charge. No such explicit hierarchy is evident within the extended family, however. To maintain family peace, the brothers have not told their cousins’ family not to open a shop across the street, despite the fact that this may have a negative effect on both businesses.
The interviews were conducted in an open area, so there were occasional distractions. While Brother C was worried about not answering the questions correctly, Brother B built up rapport quickly and seemed proud of having achieved success for his family. Brother A did not wish to discuss the details of his investment in the company; he resisted questions and seemed to feel uncomfortable. Throughout the formal interviews the brothers’ body language was open and friendly and there were smiles and jokes, but none of them was as relaxed with me – a white, female interviewer – as they were with male customers in their own language. Though efforts were made to avoid adopting an interview style that was too blunt or interrogatory, there were numerous occasions when language or communication difficulties made it necessary to ask interviewees to explain exactly what they meant.
Brothers B and C both agreed that they are competitive and that they need clear objectives. They like to know exactly when and how they should do something and that their achievement will be recognized. Brother B stated at one point that: “The strongest wins”, showing that they see themselves in competition with other businesses and business men. While the desire to have clear objectives may be linked to the time and power dimensions, the desire to gain recognition may be related to the collectivism-individualism dimension.
Family time is kept separate from business time, which is characteristic of a more privacy-oriented culture, but in other regards, the business seems to be an open-space culture. There is no physical “closed door” policy within the shop, though money is not discussed in the open and sensitive information is withheld from employees (and sometimes even family). The shop door is always open, whether it is summer or winter, and everyone is welcomed in, sometimes by name or with a country-specific greeting. There is an area for files and paperwork behind the counter, but this space does not have a door, again indicating openness. UK managers should be aware that open-space cultures may be offended by a closed door. However, in a privacy-oriented culture, employees located next to an open office door may feel they are being watched.
It would appear that all three brothers like clearly structured, sequential tasks with definite time frames, but Brothers B and C admitted that they usually have to work on many things simultaneously. Brother C explained: “I do everything…tills, food, all”. The brothers’ inter-social skills are also a form of activity; they rely on these, rather than conventional marketing techniques, to promote the business.
The chosen research method may have limited this pilot study in a number of ways. Firstly, selecting and interpreting the case through a particular framework may have blinded us to nuances and other explanations outside that conceptual framework (Perren and Ram, 2004). We have chosen Browaeys and Price’s (2008) model, which, although it considers eight dimensions of culture, is still not exhaustive. This framework omits certain aspects of culture, namely …. However, we believe that we have been able to show that our interpretation of culture and the conclusions we draw are more dependent on the paradigm adopted than the facts presented in a case. We may have also ignored many strategic-level issues because of our focus on documenting the brothers’ own accounts of the events and decisions that have helped their firm grow. For example, we have not uncovered how the family business culture impacts on their wives and children. Methodologically, ignoring strategic levels has important consequences for researchers in the small business domain. Longitudinal case study research and ethnographic methods are often promoted as tools that can help researchers present a richer, deeper account of events and entrepreneurial stories. However, small business researchers working under time and resource pressures often have to resort to providing a snapshot account of events based on interviews or short-term shadowing. It has been suggested that other methods, such as the use of diaries, may help address these issues. Solicited logs have been used as a data collection tool in longitudinal case studies in the field of strategy (Balogun et al. 2003). These offer an insider’s account of a situation and can be used to track what participants do when the researcher is absent (Perlow, 1999), but they also present significant methodological challenges (Balogun and Johnson, 2004).
Secondly, there were a number of barriers with respect to language. The finer nuances and subtleties were sometimes lost and interviewer and interviewee struggled to understand each other. This meant that further depth of understanding could not be achieved and conclusions have had to be based on explicit statements rather than implicit or sub-textual meanings.
Thirdly, all three brothers had strong opinions about women, work and family, based on their cultural values, religion and personal beliefs. To gain a deeper understanding of the dynamic within the family business and its positive and negative effects on family life, the wives and children would have had to be interviewed. While the practical problem of the wives not speaking English was a constraint, there was no possibility of speaking with them anyway; the brothers would have felt I was undervaluing their opinion or even calling them liars by requiring corroboration from their wives. They also expressed concern that this might distract the wives from their household duties. None of the brothers offered to ask if his wife would like to participate; this was ruled out immediately without consultation. This is a major barrier in ethnic family business research as lack of access to other family members means that it is only possible to gather a limited range of perspectives.
It is not possible to make broad generalizations based on one family business. While there is general consensus on the amount of hours worked and the high price paid by entrepreneurs and family businesses (McClelland, 1987; Humbert & Lewis, 2008) this case study cannot be generalized as a view into all UK Pakistani family businesses. Moreover, the deployment of using a single case design and convenience sampling in the pilot study may have led to the under-representation or over-representation of particular groups. Other perspectives on the family and the business might have been missed. It is not known why some family members agreed to take part and others did not. Whilst the women were not given the choice to partake was it because they were women who did not speak the English language and had no influence or because they could have shed light on other aspects which should remain within the family? Did younger members of the family want to participate (though they were not given the opportunity) and if they had been allowed to participate would they have trusted the intentions of the researcher or the research outcomes and its possible impact on their future? These types of bias are quite typical in convenience sampling. Since the sampling frame is not known and the sample is not chosen at random, it is unlikely to be truly representative of the population being studied. These factors undermine the researcher’s ability to make generalizations from the sample to the population and are therefore limitations.
Although the UK Government is working to ensure that more evidence and data become available about the activities of ethnic minority businesses, much is still unknown about Black Asian Minority Enterprises (BAMEs) in the UK. It would be prudent for any future research to consider cultural differences since BAMEs may well vary significantly in their business goals and objectives. This paper discusses the findings from a pilot study which forms part of a larger ongoing study considering the nature of family dynamics in ethnic minority-owned family businesses based in the UK. The pilot raised a number of interesting questions about the motivations of family business members and how the family unit worked together within the family business.
There are a number of areas where a need for further research is indicated. Working conditions seem to be particularly difficult in this family business, where long hours, heavy physical labour and low financial rewards seem to be standard. The parents in the study subjugate their own needs to give their children greater opportunities, suggesting that the contribution made by migrant entrepreneurs goes well beyond business to encompass the development of the next generation. This phenomenon warrants further investigation.
Ethnic family businesses present a number of opportunities for further research. How does the culturally and religiously informed business model assist or hinder growth in these micro-businesses? How do ethnic family businesses handle succession planning? What cultural barriers can enhance governance in bigger ethnic businesses?
This case focuses on a firm owned and managed by three Pakistani families whose founders come from a variety of backgrounds. The influence of family is most commonly noted among East African Asians (Ram and Carter, 2003). The case study discussed in this article exhibits a similar pattern of strong family influence and strong community and religious ties, but future research could widen the focus by including other ethnic groups from the subcontinent. Family businesses are also known to vary across national cultures. Future studies could compare ethnic family operating within their own national settings with those operating in international settings as well as compare ethnic family firms that do both.
According to Business Innovation and Skills (BIS) (2011), Black Asian minority enterprises are vital to the UK economy. There are an estimated 310,000 ethnic minority SMEs in the UK, contributing an estimated £20 billion to the economy per year – this is approximately 5 per cent of total SME Gross Value Added (GVA) (£398bn in 2006) (BIS Enterprise Directorate Analytical Unit, 2011). So, although this is only a pilot study and British Pakistanis are a very diverse group, our findings may have policy implications.
The number of working age, self-employed ethnic minority women went up by 48 per cent between the second quarter of 2005 and the second quarter of 2009 (BIS, 2011). While the Pakistani population is not homogenous, the findings of this small pilot indicate that Pakistani women face significant cultural barriers that prevent them from working, even in their own family businesses. This finding may have implications for government initiatives aimed at increasing self-employment and promoting female entrepreneurship.
There are three areas where the findings are particularly illuminating: they reveal the real cost to families during the start-up phase of business; they highlight the importance of the motivation to provide a better future for the next generation; and they show that women, although considered important family members, often have no input into the business.
Family members faced extreme working conditions and made huge sacrifices to get the family business off the ground and maintain it. Although the cost to family life and finances has been high, they are willing to pay this price for the future of their children. Everyone in the closer and extended family supports the business, while for the direct family unit failure is not an option. Whilst the Pakistani and Muslim community currently supports this business and family, the business is secure in its customers and income but with increased competition with a similar shop run by their cousins opening opposite, the business might need to change in order to survive.
Ultimately, however, the family puts family needs before business needs. This is in stark contrast to the traditional UK family, where poor work-life balance, high stress and divorce are common during the start-up phase of a business, and the entrepreneur often feels isolated and misunderstood. This is another area where Pakistani and UK families differ. It would be interesting to compare the bankruptcy rates amongst UK and Pakistani family businesses to determine if this level of family support makes a difference.
It is clear that the family in the pilot study is driven by collectivistic motives. The parents want to give their children a better future and they want to keep the family together by being supportive – no matter what the cost. In the UK, motives are generally individualistic, for example money, self-promotion or success (though as there is little research in this area, we acknowledge that this assertion is somewhat subjective).
What is very clear is that Pakistani women have no say or influence over how the business is operated, developed and run. Their influence within the family comes from their role as nurturers. Their aim is to keep the family together and to educate their children about how important their father’s work/support is for their community. In contrast to many UK family firms, where succession is an important issue, this study found that while the parents are proud of their business, they do not necessarily want their children to become directly involved. The brothers would prefer their children to gain an education and “do something proper with their lives” (Brother C).
The main study focuses on ethnic minority immigrant entrepreneurs, a group that is relatively neglected in the family business literature despite the fact that immigrants from ethnic minority, especially Asian, communities tend to have strong family ties and family involvement in business (Basu, 2004). Indeed, family members often see the business as an extension of the family (Basu and Altinay, 2003). The findings from this pilot extend the work of Basu (2004) by looking in depth at the impact of culture and family on entrepreneurial aspirations in the context of UK-based, Pakistani family-owned businesses. There is much debate in the literature about the business entry motives and aspirations of immigrants, in terms of whether these motives are economic (to overcome disadvantage and/or improve their financial prospects), social (to improve their social status) or explained by cultural or historical factors (Basu, 1998). However, little has been written about the dynamics of family relationships within these family businesses. This is the impetus behind this exploratory investigation.
bThe GLOBE project (Global Leadership and Organizational Behavior Effectiveness) is a major new initiative to investigate the inter-relationships between societal culture, organizational culture and organizational leadership. Approximately 170 social scientists and management scholars from 61 cultures/countries are working together on the project.
Business innovation and skills
Small and medium sized businesses
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The authors declare that they have no competing interests.
RF conceived the research and carried out the primary data collection. RF and LC analysed the data, drafted and coordinated the paper. Both authors read and approved the final manuscript.
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Collins, L.A., Fakoussa, R. Ethnic minority entrepreneurship: an examination of Pakistani entrepreneurs in the UK. J Innov Entrep 4, 2 (2015). https://doi.org/10.1186/s13731-014-0013-1
- Family business
- Ethnic minority
- Migrant entrepreneurs