Dimensions of entrepreneurship: a study of first and ... · study will concentrate on the Chinese...
Transcript of Dimensions of entrepreneurship: a study of first and ... · study will concentrate on the Chinese...
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Dimensions of Entrepreneurship – A Study of
First and Second Generation Ethnic Chinese
in Melbourne
Henri Lee
This thesis is submitted in fulfilment of the requirements of
Degree of Doctor of Philosophy
Faculty of Business and Enterprise
Swinburne University of Technology Victoria, Australia
2009
April
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ABSTRACT
This thesis explores the entrepreneurial behaviours of first and second generation ethnic
Chinese in Melbourne.
Immigrants have contributed to Australia’s economic growth since the European settlement
in the 19th century. In recent years, especially since the new non-discriminatory
immigration policies were introduced in the 1970s, large numbers of Asians have migrated
to Australia. This new wave of migrants from Asia has added to the European migration,
creating a vibrant and successful multicultural Australia. In providing and enabling
economic growth, entrepreneurship has been in the forefront of Australia’s development
(Collins 2000). Since the Second World War, large numbers of Greeks and Italians, among
other European settlers, have contributed to small business growth in Australia. Many of
these businesses are now in the hands of second and third generation immigrants. Very
little research has studied their growth phenomenon, especially given that immigrant
entrepreneurs have contributed to the development of the Australian economy. With the
sizeable and visible contribution of Chinese entrepreneurship in Australia in recent years, it
is the aim of this research to study first and second generation Chinese entrepreneurs. The
study will concentrate on the Chinese entrepreneurs in Box Hill’s Chinatown.
Since the Chinese communities, as well as other ethnic communities from other countries,
have been important in shaping and contributing to the economic potential in Australia,
contributions made by these groups of immigrants should be explored and researched. A
number of benefits arise from research such as this. In the first instance, this research can
provide a better understanding of the skills and human resources required for Australia’s
economic development. Secondly, this research can provide a better understanding of
immigrants’ entrepreneurship needs and therefore influence policy decisions. Thirdly, as
this study is specific to Chinese entrepreneurship in Box Hill, the findings can support the
Whitehorse municipality’s economic development plans for the region.
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Influences as such should be explored and utilized by all levels of the community.
Entrepreneurial activities have become stronger and more important in the life of
immigrants in Australia. The influx of skill and economic benefits that these entrepreneurs
create and grow should not be underestimated. They not only contribute to the domestic
growth of Australia but also they have the ability to connect Australian business with
overseas economies through trade. The international connections and the globalization
efforts of Australia are assisted by the existence of various, numerous ethnic communities
who have settled in Australia. The underlying cultural background of these communities
plays an essential role in providing an understanding of the entrepreneurship behaviour in
these communities which is currently lacking.
.
The history of ethnic Chinese immigrants in Melbourne who came from Southeast Asian
countries and mainland China has been studied previously. However, this has always been
in the form of a linear narrative description; there has been relatively limited research on
the entrepreneurial behaviours of the first and second generation ethnic Chinese
entrepreneurs in Melbourne. This raises the question of what are the differences between
the generations in regard to entrepreneurial behaviour.
Variably, with the progress of time and social adaptation, the working philosophies and
styles of the businesses’ operations are bound to change as the second generation
entrepreneurs takes over from the first. The organizational complexity is bound to increase
in this progression, which may include the nature of the business, the size of the
organization and the human resource requirements. These are explored in this research.
Specifically, this research will study the entrepreneurial profiles of the first and second
generation ethnic Chinese entrepreneurs in Box Hill in Melbourne, Australia. The research
will be based on quantitative analysis of data of both the first and second generation
entrepreneurs. Furthermore, the study will be used to compare the generations and to
ascertain if the differences mirror those between east and west thinking of entrepreneurship.
Differences may be due to the upbringing of the two generations in different cultural
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environments; in this study, the second generation entrepreneurs are Australians by birth
but of Chinese parentage.
The study will address the question whether there is a ‘typical Chinese entrepreneurial
profile’ when comparing the two generations’ entrepreneurial activities. In addition, the
study will test if there is a general ‘culture’ of Chinese entrepreneurs. Another purpose of
the research is to explore factors that contribute to the creation of successful entrepreneurs.
This may assist further generations of Chinese entrepreneurs and the local Chinese
community.
This study looks at the perceptions and views of both first and second generation ethnic
Chinese entrepreneurs in Melbourne, in relation to business success:
1. Background of the entrepreneurs
2. Motivation of the entrepreneurs
3. Traditional Confucian values of the entrepreneurs
4. Difficulties and hurdles experienced by the entrepreneurs
5. Overseas expansionary vision of the entrepreneurs
Responses were sought from different sectors and levels of the Chinese business
communities in Box Hill. These included professionals, restaurants, real estate, and trading
companies. However, the purpose of the study is not to identify the characteristics and
values within the industry sectors but of the Chinese ethnic businesses generally.
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ACKNOWLEDGMENTS
This is, in fact, the most challenging project in my life so far. The USB gadget for storing
the files has travelled with me all over the world during this research. I am deeply grateful
to my supervisors, Professor Christopher Selvarajah, Associate Professor Siva Muthaly and
Dr Denny Meyer, for their commitment and dedicated supervision during the research. I
thank them for their understanding and patience; especially as I do not come from an
academic background or rather I have been away from academia for many years. Secondly,
I am an optometrist and a businessman by profession. I am actually surprised that they can
put up with my ‘working style’ and the way that we communicate. Without them, I truly
believe that the project would not have been possible. I have learnt from Chris that there is
always light at the end of this tunnel, and I am always one step away from it. I am
privileged to have a coordinating supervisor who works late into the night as I do and
provides instant feedback. I hear of students who had either abandoned their studies or
changed supervisor. Thankfully, this has never occurred to me as I found not only an able
supervisor but a lifelong friend. I have learnt from Siva that life can be very short, and I
should make good use of it. Lastly, I have learnt a wonderful word – ‘blindly’ – from
Denny, who also taught me what the three letters (PhD) should mean.
I wish to acknowledge my gratitude to all the participants from the Chinese community, for
their trust and honest opinions in answering the questionnaires. They provided the most
valuable information in this study, without which this thesis would not have been
completed. Their contribution to this study also helped me understand and appreciate the
ethnic entrepreneurship process. The project is no different to other business deals that I
have to make in my life as a businessman, which include research, question, and organize.
However, I now realise the difference. Working toward the completion of this thesis has
opened my eyes to a new world of thinking, especially the questions of ‘Why’ and ‘Why
not’.
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I would like to thank Swinburne University, in particular, in allowing me to carry out this
research off campus and in the business community. Without the approval, this research
would not have been possible. I have learnt so much from my study. I thank all my
supervisors once again because this has been a very lonely journey. However, this is the
most rewarding of all projects that I have done in the past. I also thank Donna Williams for
her contribution as a proofreader of this thesis. Thank you.
Lastly, I wish to dedicate this thesis to my other half, Cleone, who has been so unselfishly
helping me in the last three years – giving me all the support, putting up with my
continuous annoyance and encouraging me to finish this research. Without her good food
and care for our children, I do not believe that this thesis could have been finished at all.
My two lovely kids, Zoe and Rex, have been supporting me by saying ‘How’s the thesis?’
every morning and afternoon to me. After this study, they all believe that I am a ‘hobo’
from outer space, which is in fact a good topic to investigate.
Without my family, I would not have been able to carry on and talk to my supervisors.
Thank you to all of you and the readers.
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DECLARATION
I, Henri Lee, declare that the thesis:
1. Contains no material which has been accepted for the award to the candidate of any
other degree or diploma, except where due reference is made in the text of the thesis
2. To the best of my knowledge contains no material previously published or written
by another person except where due reference is made in the text of the thesis; and
3. Where the work is based on joint research or publications, discloses the relative
contributions of the respective authors.
4. Has met all the requirements of the Ethics Approval from the Swinburne University
of Technology under SUHREC Project 0607/105 (refer to Appendix 23).
Signature:
Date:
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CONTENTS
ABSTRACT .......................................................................................................................... ii
ACKNOWLEDGMENTS .................................................................................................... v
DECLARATION ................................................................................................................. vii
CONTENTS ....................................................................................................................... viii
LIST OF TABLES ............................................................................................................ xvi
LIST OF DIAGRAMS ..................................................................................................... xvii
Chapter 1 .............................................................................................................................. 1
General Overview and Purpose of this Study ................................................................... 1
1.1 Introduction ................................................................................................................ 1
1.2 Background to Entrepreneurship ............................................................................. 3
1.2.1 Background to Chinese Entrepreneurship ....................................................... 6
1.2.2 The Importance of Immigrant Chinese Entrepreneurs .................................. 8
1.3 Why Study Chinese Entrepreneurship? ................................................................ 12
1.4 Research Objective................................................................................................... 15
1.5 Research Questions .................................................................................................. 15
1.6 Theoretical Framework of the Study ..................................................................... 16
1.6.1 Background of the Entrepreneurs ................................................................... 18
1.6.2 Motivations ........................................................................................................ 18
1.6.3 Traditional Confucian Values .......................................................................... 19
1.6.4 Difficulties and Hurdles .................................................................................... 20
1.6.5 Overseas Expansionary Vision ........................................................................ 20
1.7 Summary of the Hypotheses of the Study .............................................................. 21
1.8 Box Hill – Chinatown ............................................................................................... 23
1.9 Definitions ................................................................................................................. 24
1.9.1 Migration ........................................................................................................... 25
1.9.2 First and Second Generation Chinese ............................................................. 25
1.9.3 Acculturation (9 years old) ............................................................................... 26
1.10 Thesis Outline ......................................................................................................... 27
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1.11 Summary ................................................................................................................. 31
Chapter 2 ............................................................................................................................ 32
Different Views of Entrepreneurship ............................................................................... 32
2.1 Introduction .............................................................................................................. 32
2.2 Definitions of Entrepreneurship ............................................................................. 33
2.3 Factors for Successful Entrepreneurship............................................................... 36
2.4 Social Learning Theory ........................................................................................... 42
2.5 Theories of Immigrant Entrepreneurship ............................................................. 43
2.5.1 Disadvantage and Stepladder Theories ........................................................... 44
2.5.2 Opportunity and Risk-taking Theories ........................................................... 46
2.5.3 Middleman Theories ......................................................................................... 49
2.6 Chinese Business Culture ........................................................................................ 51
2.7 Chinese Entrepreneurial Process and Characteristics ......................................... 53
2.8 Importance of Chinese ‘Family First’ Ethics ........................................................ 57
2.9 Comparison between Chinese and Western Entrepreneurship .......................... 59
2.10 Individualism vs Collectivism ............................................................................... 63
2.11 Adoption of Western Styles in Chinese Business ................................................ 66
2.12 Summary ................................................................................................................. 67
Chapter 3 ............................................................................................................................ 69
Chinese Entrepreneurs and Ethnic Enclaves .................................................................. 69
3.1 Introduction .............................................................................................................. 69
3.2 Population of Australia with Chinese Ancestry .................................................... 70
3.3 Different Phases of Immigration ............................................................................ 72
3.3.1 First Wave – Gold Rush Era ............................................................................ 72
3.3.2 Second Wave – European Settlement .............................................................. 75
3.3.3 Third Wave – 1980 Migrants ........................................................................... 76
3.3.4 Selective Immigration Policies ......................................................................... 77
3.4 A Brief History of Chinese Entrepreneurship ....................................................... 79
3.5 Three Theories of Ethnic Enclave Economy ......................................................... 82
3.5.1 ‘Networking’ Theory ........................................................................................ 84
3.5.2 ‘Location’ Theory ............................................................................................. 86
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3.5.3 ‘Social Capital’ Theory ..................................................................................... 88
3.6 Chinese Diaspora ...................................................................................................... 90
3.7 Summary ................................................................................................................... 95
Chapter 4 ............................................................................................................................ 97
Characteristics of Successful Chinese Entrepreneurs .................................................... 97
4.1 Introduction .............................................................................................................. 97
4.2 Psychological Traits ................................................................................................. 98
4.2.1 Self-Satisfaction ............................................................................................... 100
4.2.2 Potential Seeking ............................................................................................. 102
4.3 Motivations ............................................................................................................. 103
4.3.1 Economic Motivations .................................................................................... 103
4.3.2 Social Motivations ........................................................................................... 105
4.4 Adaptive Opportunism – Innovative Entrepreneurship .................................... 107
4.5 Cultural Issues – Unique to Chinese Entrepreneurs .......................................... 109
4.6 Resources ................................................................................................................ 116
4.6.1 Human Capital ................................................................................................ 117
4.6.2 Financial Capital ............................................................................................. 118
4.7 Difficulties and Hurdles ......................................................................................... 121
4.7.1 Language .......................................................................................................... 121
4.7.2 Education ......................................................................................................... 123
4.7.3 Religion ............................................................................................................ 125
4.7.4 Adaptation ....................................................................................................... 126
4.7.5 Previous Work Experience ............................................................................. 127
4.8 Business Skills and Capabilities ............................................................................ 130
4.8.1 Bureaucracy and Regulation .......................................................................... 131
4.8.2 Prior Exposure to Entrepreneurship ............................................................ 133
4.8.3 Standard of Success ........................................................................................ 134
4.8.4 Overseas Expansionary Vision ...................................................................... 136
4.9 Summary ................................................................................................................. 136
Chapter 5 .......................................................................................................................... 138
Research Design and Methodology ................................................................................ 138
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5.1 Introduction ............................................................................................................ 138
5.2 Objective, Research Questions, Hypotheses of the Study .................................. 138
5.3 Important Research Characteristics of the Study............................................... 140
5.4 Philosophical Research Paradigms of the Study ................................................. 141
5.4.1 Positivist Paradigm ......................................................................................... 142
5.4.2 Interpretive Paradigm .................................................................................... 143
5.4.3 Applicable Paradigm of this Study ................................................................ 143
5.4.4 Pragmatic Paradigm ....................................................................................... 144
5.4.5 Mixed Methods Research Approach ............................................................. 145
5.5 Population and Sample of the Study .................................................................... 148
5.6 Research Instrumentation ..................................................................................... 150
5.6.1 Quantitative Method ....................................................................................... 150
5.6.2 Ethics Approval ............................................................................................... 152
5.6.3 Pilot Study ........................................................................................................ 153
5.6.4 Data Collection Procedure ............................................................................. 155
5.7 Data Analysis Method ............................................................................................ 157
5.7.1 Factor Analysis – Data Reduction Tool ........................................................ 157
5.7.2 Multiple Regression ........................................................................................ 160
5.8 Summary ................................................................................................................. 160
Chapter 6 .......................................................................................................................... 162
Analysis - Demographic Profiles of the Chinese Entrepreneurs ................................. 162
6.1 Introduction ............................................................................................................ 162
6.2 Sample Sizes of First and Second Generations ................................................... 163
6.3 Country of Origin ................................................................................................... 164
6.4 Gender ..................................................................................................................... 166
6.5 Industry ................................................................................................................... 168
6.6 Position .................................................................................................................... 171
6.7 Targeted Businesses ............................................................................................... 173
6.8 Targeted Customers ............................................................................................... 175
6.9 Age of Respondents ................................................................................................ 176
6.10 Religion of Respondents ...................................................................................... 178
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6.11 Are You Highly Spiritual? .................................................................................. 179
6.12 Did You Start Your Business? ............................................................................ 180
6.13 Summary ........................................................................................................... 182
Chapter 7 .......................................................................................................................... 184
Analysis - The Five Dimensions of Chinese Ethnic Entrepreneurship ....................... 184
7.1 Introduction ............................................................................................................ 184
7.2 Dimension 1 – Background of the Entrepreneurs ............................................... 184
7.2.1 Guanxi connections ......................................................................................... 185
7.2.2 Prior Experience.............................................................................................. 189
7.2.3 Summary of Dimension 1: Background of the Entrepreneurs ................... 192
7.3 Dimension 2 – Entrepreneurial Motivation ......................................................... 193
7.3.1 Potential Seeking ............................................................................................. 195
7.3.2 Self-Satisfaction ............................................................................................... 197
7.3.3 Summary of Dimension 2: Entrepreneurial Motivation ............................. 198
7.4 Dimension 3 – Traditional Confucian Values ...................................................... 200
7.4.1 Traditional Confucian Values ........................................................................ 201
7.4.2 Summary of Dimension 3: Traditional Confucian Values .......................... 203
7.5 Dimension 4 – Difficulties and Hurdles ................................................................ 205
7.5.1 Assimilation ..................................................................................................... 206
7.5.2 Business Set-up ................................................................................................ 206
7.5.3 Bureaucracy and Regulation .......................................................................... 207
7.5.4 Personal Hurdles ............................................................................................. 208
7.5.5 External Hurdles ............................................................................................. 209
7.5.6 Business Management ..................................................................................... 210
7.5.7 Adaptive Opportunism ................................................................................... 210
7.5.8 Financial Rewards ........................................................................................... 211
7.5.9 Summary of Dimension 4: Difficulties and Hurdles .................................... 213
7.6 Dimension 5 – Overseas Expansionary Vision .................................................... 216
7.6.1 Overseas Expansionary Vision ...................................................................... 217
7.6.2 Summary of Dimension 5: Overseas Expansionary Vision ......................... 220
7.7 Summary ................................................................................................................. 222
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Chapter 8 .......................................................................................................................... 224
Testing of Hypotheses and Discussion of Results .......................................................... 224
8.1 Introduction ............................................................................................................ 224
8.2 The Dependent Variable: Financial Rewards as Measure of Success ............... 226
8.2.1 Development of Scale for Measures of Financial Rewards ......................... 227
8.3 Hypothesis 1 – Background of the Entrepreneurs Is Related to Entrepreneurial
Success ........................................................................................................................... 229
8.3.1 Development of Scales for the Background of the Entrepreneurs ............. 229
8.3.2 Hypothesis Testing Results: Success in Terms of Background of the
Entrepreneurs ........................................................................................................... 231
8.4 Hypothesis 2 – Entrepreneurial Motivation Is Related to Entrepreneurial
Success ........................................................................................................................... 232
8.4.1 Development of Scales for Entrepreneurial Motivation .............................. 232
8.4.2 Hypothesis Testing Results: Success in terms of Motivation ...................... 234
8.5 Hypothesis 3 – Confucian Piety Is Related to Entrepreneurial Success ........... 235
8.5.1 Development of Scales for Confucian Piety .................................................. 235
8.5.2 Hypothesis Testing Results: Success in Terms of Confucian Piety ............ 237
8.6 Hypothesis 4 – Difficulties and Hurdles Are Related to Entrepreneurial Success
........................................................................................................................................ 237
8.6.1 Development of Scales for the Difficulties and Hurdles .............................. 238
8.6.2 Hypothesis Testing Results: Entrepreneurial Success in Terms of
Difficulties and Hurdles ........................................................................................... 241
8.7 Hypothesis 5 – Overseas Expansionary Vision Is Related to Entrepreneurial
Success ........................................................................................................................... 242
8.7.1 Development of Scales for Overseas Expansionary Vision ......................... 242
8.7.2 Hypothesis Testing Results: Success in Terms of Overseas Expansionary
Vision ......................................................................................................................... 244
8.8 Summary of the Hypotheses Testing Results ...................................................... 245
8.9 SEM – Structural Equation Modelling (N=200) ................................................. 245
8.9.1 Influence of Gender – Two Factor MANOVA Test ..................................... 246
8.9.2 Results .............................................................................................................. 246
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8.9.3 Diagrammatic Representation of the Model ................................................ 250
8.9.4 Explanation of the Model ............................................................................... 252
8.10 Comparison of the Two Generations ................................................................. 254
8.11 Summary ............................................................................................................... 261
Chapter 9 .......................................................................................................................... 262
Conclusion ......................................................................................................................... 262
9.1 Introduction ............................................................................................................ 262
9.2 Aim of the Study ..................................................................................................... 262
9.3 A Reflection on the Theory of Entrepreneurship ............................................... 264
9.4 Concluding Profiles of Chinese Entrepreneurs ................................................... 266
9.4.1 Who Are They? ............................................................................................... 266
9.4.2 What Are the Background Factors? ............................................................. 268
9.4.3 What Are the Entrepreneurial Motivation Factors? ................................... 270
9.4.4 What Are the Traditional Confucian Values? ............................................. 272
9.4.5 What Are the Difficulties and Hurdles? ....................................................... 273
9.4.6 The Importance of Overseas Expansionary Vision...................................... 274
9.5 Staircase Effects ..................................................................................................... 276
9.6 Social Integration of Chinese Entrepreneurs ...................................................... 278
9.7 New Hybrid Entrepreneurs ................................................................................... 281
9.8 Importance of Chinese Entrepreneurs ................................................................. 285
9.9 Working with China .............................................................................................. 287
9.10 Limitations of the Study ...................................................................................... 289
9.11 Research Implications and Recommendations for Further Work .................. 290
9.11.1 Policy Implication ......................................................................................... 293
9.11.2 Future Research ............................................................................................ 295
9.12 Conclusion ............................................................................................................. 296
References ......................................................................................................................... 298
Appendix 1 Research Questionnaire .............................................................................. 334
Appendix 2 Form of Disclosure and Informed Consent ............................................... 338
Appendix 3 Samples of Findings ..................................................................................... 340
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Appendix 4 Consent Letter of Australia-China Commerce and Economic Association
Inc. ..................................................................................................................................... 344
Appendix 5 Pattern Matrix of Factor Analysis ............................................................. 345
Appendix 6 Structure Matrix of Factor Analysis.......................................................... 351
Appendix 7 Relationships between Generation and Other Demographic Variables 357
Appendix 8 Correlations between Various Constructs ................................................ 358
Appendix 9 Regression Weights of Total Population (N=200) .................................... 359
Appendix 10 Standardized Regression Weights of Total Population (N=200) ........... 362
Appendix 11 Standardized Total Effects of Total Population (N=200) ...................... 364
Appendix 12 Regression Weights of First and Second Generation ............................. 365
Appendix 13 Standardized Total Effects of First Generation (N=132) ....................... 369
Appendix 14 Standardized Total Effects of Second Generation (N=68)..................... 370
Appendix 15 Multiple Regression of 14 Scales (N=200) ............................................... 371
Appendix 16a Covariances of the Three Factors (N=200) ........................................... 372
Appendix 16b Correlations of the Three Factors (N=200) ........................................... 372
Appendix 17 Independent T-test and Mann-Whitney U Test of 14 Scales ................. 373
Appendix 18 Mean Comparison between Two Generations ........................................ 374
Appendix 19 Multivariate Test on 2 Generations combined ....................................... 375
Appendix 20 Total Variance % and Cronbach’s Alpha of 14 Scales .......................... 377
Appendix 21 General Linear Regressions of 14 Scales (N=200) .................................. 378
Appendix 22 Multivariate Tests on Gender Difference for 14 Scales (N=200) .......... 379
Appendix 23 Ethics Approval Letter from Swinburne University .............................. 380
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LIST OF TABLES
Table 2.1 Western and Eastern Business Styles. ............................................................. 61
Table 2.2 Individualism and Collectivism. ....................................................................... 65
Table 6.1 Sample Size of the First and Second Generation Entrepreneurs (N=200) . 163
Table 6.2 Country of Origin (N=200) ............................................................................. 165
Table 6.3 Genders of the Respondents (N=200) ............................................................ 166
Table 6.4 Industries of the Respondents (N=200) ......................................................... 169
Table 6.5 Positions of Entrepreneurs in Their Businesses (N=200) ............................ 171
Table 6.6 Locality – Target Businesses of Entrepreneurs (N=200) ............................. 173
Table 6.7 Target Customers of Entrepreneurs (N=200) ............................................... 175
Table 6.8 Age of Respondents (N=200) .......................................................................... 176
Table 6.9 Religion of Respondents (N=200) ................................................................... 178
Table 6.10 Level of Spirituality of Religion among Respondents (N=200) ................. 180
Table 6.11 Starting Own Business among Respondents (N=200) ................................ 181
Table 6.12 Analysis of Part I Results (Demographic) ................................................... 182
Table 7.1 Results of Dimension 1: Background of the Entrepreneurs ........................ 192
Table 7.2 Results of Dimension 2: Entrepreneurial Motivation .................................. 198
Table 7.3 Results of Dimension 3: Traditional Confucian Values ............................... 202
Table 7.4 Results of Dimension 4: Difficulties and Hurdles ......................................... 212
Table 7.5 Results of Dimension 5: Overseas Expansionary Vision ............................. 218
Table 8.1 Description of Pattern Matrix for Background Factors .............................. 230
Table 8.2 Description of Pattern Matrix for Entrepreneurial Motivation Factors ... 233
Table 8.3 Description of Pattern Matrix for Confucian Piety Factors ........................ 236
Table 8.4 Description of Pattern Matrix for Difficulties and Hurdles Factors .......... 239
Table 8.5 Description of Pattern Matrix for Overseas Expansionary Vision Factors 243
Table 8.6 Model Summary of Regression Square ......................................................... 247
Table 8.7 Squared Multiple Correlations of 11 Factors ............................................... 248
Table 8.8 Summary of Correlations of 14 Constructs .................................................. 250
Table 8.9 Summary of Regression Weights for First and Second Generations ......... 255
Table 9.1 First Generation Immigrant Presence in Major Countries in 1995 ........... 285
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LIST OF DIAGRAMS
Diagram 1.1 Theoretical Framework of the Study ......................................................... 22
Diagram 5.1 Research Strategy Using Triangular Methodology ................................ 147
Diagram 7.1 Factors Influencing the Background of Chinese Entrepreneurs ........... 185
Diagram 7.2 Key Characteristics of the Background of Chinese Entrepreneurs ...... 193
Diagram 7.3 Variables Influencing Entrepreneurial Motivation ................................ 195
Diagram 7.4 Key Characteristics of Entrepreneurial Motivation ............................... 200
Diagram 7.5 Variables Influencing Traditional Confucian Values Important to
Chinese Entrepreneurship in Australia ......................................................................... 201
Diagram 7.6 Key Characteristics of Traditional Confucian Values Important to
Chinese Entrepreneurship in Australia ......................................................................... 204
Diagram 7.7 Variables Contributing to Difficulties and Hurdles Impacting Chinese
Entrepreneurship ............................................................................................................. 205
Diagram 7.8 Key Characteristics of Difficulties and Hurdles Impacting Chinese
Entrepreneurship ............................................................................................................. 215
Diagram 7.9 Variables Influencing Overseas Expansionary Vision ........................... 217
Diagram 7.10 Key Characteristics of Overseas Expansionary Vision ........................ 222
Diagram 8.1 Model of Chinese Entrepreneurship Success .......................................... 252
Diagram 8.2 Box-plot: Guanxi connections vs First and Second Generation
Entrepreneurs ................................................................................................................... 258
Diagram 8.3 Box-plot: Prior Experience vs First and Second Generation
Entrepreneurs ................................................................................................................... 259
Diagram 8.4 Box-plot: Self-satisfaction vs First and Second Generation Entrepreneurs
............................................................................................................................................ 260
Diagram 9.1 Staircase Effects ......................................................................................... 276
Diagram 9.2 Chinese-ness and Australian-ness vs the Two Generations ................... 278
1
Chapter 1
General Overview and Purpose of this Study
1.1 Introduction The study of Chinese entrepreneurship is the main theme of this research. Specifically, this
thesis is about the study of first and second generation Chinese entrepreneurs in Melbourne,
towards which it develops a framework for understanding immigrant entrepreneurs in
Australia. The framework will look at the behaviour and operation of first and second
generation Chinese entrepreneurs in Box Hill in Victoria. There are several explanations for
the representation of immigrants in small business (Collins 1996, 2003b, Harris and Ryan
1994) and these will be explored in this chapter and discussed further in the thesis.
This study further investigates the entrepreneurial success of the Chinese immigrants,
including their commercial impact on the local and Australian economies. Therefore,
economic growth principles are relevant to the study (Collins 2002, Choi 1975, Henderson
2003). Entrepreneurship and economic principles seem to have common grounds; both
focus on profitability, individual economic empowerment and independence, wealth
creation and distribution, job creation and national economic growth (Collins 1995, Friesen
1997). Various elements of successful entrepreneurship will be studied. Hence, Chinese
entrepreneurship and relevant economic concepts primarily form the foundation of the
study.
Authors and researchers, who in most instances have been social scientists, economists and
entrepreneurs, have contributed to the phenomenon of growth change; their work has
emphasized the relationship between entrepreneurship, the economy and globalization.
Tributes are paid to people such as Adam Smith, Joseph Schumpeter, Frank Knight, David
McClelland, Peter Drucker and Robert Sobel, who have contributed to the development of
2
entrepreneurship research linking the entrepreneur to social and economic growth where
each draws on the other.
While first generation entrepreneurs are governed by the interactions of human and social
behaviour in a period where immigrants are new to a country and interested in settling and
commencing a business activity, their successors will be governed by situations arising
from the contribution of their predecessors and the influences from within Australia where
they were born (Chan 2001). In both instances the collective contribution of these
entrepreneurs to growth and national development is enormous. This cycle of events has
been contributing continuously to social and entrepreneurial development (Chin 1988, Choi
1975). The entrepreneurial styles of the two generations of entrepreneurs will be discussed
in later chapters.
In this thesis, the entrepreneurial behaviours of two generations of ethnic Chinese
entrepreneurs in Box Hill will be studied, with the notion that a study of this kind will help
understand and possibly provide a ‘road map’ or model for ethnic entrepreneurship
behaviour for immigrant entrepreneurs and theoreticians.
The premise of the thesis is that the development of ‘local’ economies and the standard of
living within the Chinese community will flourish as a result of concentrated community
networking. Lever-Tracy et al. (1991) argued that very few small and medium businesses
are able to operate effectively at the international level, especially where exports are
concerned, such as in Australia. However, given that there is ease of communication and
transportation nowadays, it may be easier and more flexible for the second generation to
carry out more entrepreneurship activities with better resources (Boyer 1996, Clark and
Drinkwater 2000). In the second generation, the nature and extent of the influence of the
ethnic community will diminish as the group is integrated into the host community. In fact,
their views will be a mixture of both Chinese and Australian ways of thinking (Chan 2000,
Chan 2001). This mixture enables the group to utilise the background knowledge of the
parents and foundation structures such as finance and personnel networks, and to extend
into local Australian and overseas operations. The first generation frequently comes from
3
countries (e.g. China, Taiwan, Hong Kong, Malaysia, and Singapore) where many small
and medium family businesses are successful manufacturers and exporters, and where their
communities have long-established networks (Chou 1993). The know-how, experiences
and knowledge of the ethnic Chinese are important in shaping the views of individual
entrepreneurs to take risks and to succeed (Chavan and Agrawal 2002).
Lever-Tracy et al. (1991) concluded that both the Chinese and Indian immigrant enterprises
are successful, innovative and export oriented. Collins et al. (1997) found that Asian
entrepreneurs in Australia reported the highest rate of import and export trade of all those
surveyed. The linkages with their country of origin and the social communication with their
business associates, friends and families overseas may play very important roles in the
success of their businesses (Coleman 1988, Collins 2002). The content of this thesis comes
from a range of different studies, hypotheses and researches.
1.2 Background to Entrepreneurship
The 1997 Australian student edition of the Oxford English Dictionary mentions that the
word ‘ethnic’ is used for ‘designating a social group or migrants (or their descendants)
whose original language is not English’. This definition quarantines the English-speaking
population from the definition of ethnic groups and attempts to designate all ‘others’ as
‘ethnic’ groups. For the sake of simplicity and purpose of this research, this commonly
used definition in Australia will be used. In this study, the study concentrates on Chinese
entrepreneurs.
Although entrepreneurship has generated considerable academic interest, there has never
been a single unified or agreed definition of entrepreneurship (Gartner 1990). It differs
from one author to another. Some definitions focus on innovation, risk taking, venture and
wealth creation (Fry 1992; Gartner 1985; Schumpeter 1939). Others such as Bennet and
Dann (2000) described the elements of ‘entrepreneurship’ from their own research
perspectives rather than adopt a specific definition for the term itself. It is widely
acknowledged that entrepreneurship is not confined to any one type of business; rather,
4
there are several types of entrepreneurs (Thompson 1999). Legge (1997) suggested that the
word ‘entrepreneur’ should be reserved for a man or woman who creates an enterprise,
either as a new organization or an initiative from within an existing organization. On the
other hand, ethnic entrepreneurship is loosely defined as business-ownership by immigrant
and ethnic group members (Waldinger 1986).
For example, from an economist’s perspective, financial matters measured in terms of
monetary gain and business growth are seen as being at the heart of entrepreneurship. At
the same time, from a psychological perspective, personal attributes, values and the
presence of specific traits are seen as inherent in entrepreneurs. According to management
views, entrepreneurship is perceived as a process of organizing existing resources in
marketable products or services. Every different perspective will introduce different forms
of explanation (Saxon 2003). Therefore, it should be the interpretation, depending on the
field of studies or research, which determines the definition.
Bennet and Dann (2000), Hofer and Bygrave (1992) and Kao (1993) argued that
entrepreneurship is an amalgamation or medley of art and science, which displays itself in a
combination of factors in a range of different settings, contexts, industries, countries and
times. Some of the developmental definitions of entrepreneurship will be explored in this
study. However, when Chinese culture becomes involved in the study, only the relevant
definitional issues will be used. This is because these Chinese entrepreneurs come from
different backgrounds; their cultural orientation will be different from those studied
previously by other authors (Schumpeter 1934, Bennet and Dann 2000).
Stevenson et al. (1989) defined entrepreneurship as ‘the process of creating value by
bringing together a unique package of resources to exploit an opportunity’. The process
itself consists of the set of activities necessary to identify an opportunity, develop a
business concept, assess and acquire the necessary resources, implement the concept, and
then manage and harvest the venture. However, the author will still apply the scholarly
definitions of entrepreneurship by Schumpeter (1934, 1954) that lay specific emphasis on
innovation, identification of opportunities, wealth creation, consequences for the economy,
5
and the entrepreneur as the main actor in the entrepreneurial process will be adopted as the
working definition for the study.
Kirzner’s (1999) theory of entrepreneurship suggests how a market process arises and why.
It explains that entrepreneurs respond by alertness to the market, through profitable
opportunities to gain pure profits. This alertness to the market is the force that generates the
market process and determines its direction. Jennings (1994) observed that, similar to
Schumpeter’s idea, the entrepreneur is the decision maker in a particular cultural context,
who commands a range of behaviours that exploit these opportunities. Both Kirzner and
Jennings perceive the entrepreneur as the driving force of the market economy. The
entrepreneur functions primarily as a creator of innovations in the production process and
as an exploiter of profitable opportunities.
The major elements embodied in Schumpeter’s and Kirzner’s views of entrepreneurship are
widely accepted in literature and are summarized in Kao’s (1993) underlying beliefs of
entrepreneurship. These are the entrepreneurial behaviours that involve the ability to
identify new opportunities based on new ideas and approaches and turn them into
something tangible. Second, entrepreneurs require an array of organizational and personal
skills (interpersonal skills, self-understanding, leadership, conflict resolution, stress
management and tolerance of ambiguity). Third, there are consequences of entrepreneurial
behaviours for the entrepreneurs themselves and the economy as a whole.
In this study, entrepreneurs are those (beyond inventors, bureaucrats and managers) who
not only recognize opportunities, but also have creative abilities and practical skills to turn
opportunities into ventures and commercial realities that survive, grow and flourish to
become successful businesses. Consequently, in this chapter, the author will focus on
businesses and initiatives with some growth potential, albeit limited perhaps. The author is
less concerned with the so-called lifestyle businesses, for which growth is not a major
objective. The main aim of the research is to study Chinese entrepreneurship in Melbourne.
A secondary aim is to find out the differences between the two generations of Chinese
entrepreneurs in how they view and interpret entrepreneurship.
6
1.2.1 Background to Chinese Entrepreneurship Ahltrom et al. (2004) and Backman (1995) suggested the following characteristics of
overseas Chinese firms:
• Beyond the family – In the first generation, the businesses are set up as a matter of
survival, not of exploration or challenge. These people prefer to return to their own
inner community, speak the same language and make a living like in their own
country of birth. They seldom go beyond the boundary of family to set up the
businesses within the Australian community. Family members almost always
maintain controlling interest in the firms. Outsiders are not commonly admitted to
top management ranks.
• Simple organizations – In the first generation, the information remains inside the
firms and within the founding family. Between the first and second generations,
cultural differences create conflicts in the ways that businesses should be carried
out. Chinese businesses are usually found to be clustered around different localities.
Physically, these are found to be messier, dirtier, bulkier and nosier, especially in
the retail businesses. ‘Laissez-faire’ attitudes to doing business are found to be the
norm. .
• Centralized governance and decision-making – There is only one decision maker
within the family, and he or she gives orders to other staff members. This prohibits
the businesses from going beyond the boundary of the family and extending into the
larger community. In the first generation, the strategy is to make enough money for
the family. Most families will not see the necessity of introducing an external party
to oversee and ‘manage’ the business. As it has been mentioned earlier, the typical
Chinese family and family business are inseparable. Managing the business as well
as the day-to-day running of the family is seen as the role of the head of the family.
• Internal financing – Networking within the community enables the firms to seek
finance among relatives and friends. At the same time, this may limit the potential
of expansion and put constraint on the growth of the companies.
7
• Lack of marketing – The importance of promoting and marketing the products or
services is non-existent in the early days of immigrant businesses. Chinese tend to
keep a very low profile while acting as suppliers to others. Chinese tend to keep the
skills, knowledge and practical experience within the family or very close to the
family. The resources or any simple development projects will not be passed onto
the staff easily. This, however, prohibits the expansion and future development of
the businesses.
These firms typically are characterized by family ownership and control, simple
organizational structures with centralized decision making, internal financing, and little or
no spending on research and development or advertising (Carney 1998, Chen 2001). The
critical role of the manager or owner, in controlling the enterprise, makes some immigrant-
owned small businesses fundamentally different from Australian businesses (Chu 1995).
Language and cultural differences influence immigrant small business people in their
choice of employees and business associates and the way that they choose to do business.
These factors and traditional values can be found in the earlier stages of Chinese
businesses. It has been found that small business people face problems in management and
bookkeeping and that they rarely seek external advice when they encounter difficulties
(Strahan and Luscombe 1991).
However, many immigrants have shown considerable entrepreneurial talent in establishing
small businesses and developing large ones. Small businesses owned and managed by
immigrants are generally more successful than their Australian counterparts and show
strong employment growth (Strahan and Williams 1988). The difference is due to the fact
that some individual entrepreneurs have previous business experiences and prior knowledge
of business set-up from overseas, knowledge that helps them to implement the proper
management and business styles that are required for successful businesses (Collins 1996).
8
1.2.2 The Importance of Immigrant Chinese Entrepreneurs For centuries, people left China and crossed the South China Sea to neighbouring countries
such as Vietnam, Burma, Thailand, Malaysia, Singapore, Indonesia, Philippines and, in the
last two centuries, western nations such as Australia, Canada and the United States (Choi
1975, Li 1988). They included peasants, bankers, doctors, entrepreneurs, and others. Over
time, they formed a vast web of networks reaching across the globe and each reaching back
to their own laojia, the people in their small corner of the homeland who come from the
same village or the one down the road, who speak the same language in the same tones –
Hakka, Taishan Cantonese, Teochiu, Hokkien, Hokchia, Hokchiu, Henghua and Wu. These
great networks of overseas Chinese reach back through the network, sending billions of
dollars back into their homelands (ABS 2006b).
For many years, these people were known for their aggressive, vibrant and influential roles
in the Asia-Pacific. Distinctive characteristics included being hard working, pioneering,
progressive and acquisitive. Further descriptions included their fondness for accumulating
land as the traditional form of wealth, with the rest of their capital being held in liquid
form. They were also known for lacking interest in participating in politics (Fitzgerald
1997).
The migration of the ‘Chinese’ people from their homeland has been one of the largest
movements of individuals in recent history (Clammer 2002). Throughout history, Chinese
communities have spread all over the world, with some twelve million Chinese moving out
of China from the 1820s onwards and managing to adapt to different social environments
(Skeldon 1995).
Although there are many estimates of the exact number of overseas Chinese, figures are
imprecise. Prior to the 19th century, a number of diasporic Chinese communities were
already scattered overseas; however, Chinese immigration overseas was prohibited in
China. The majority of those overseas saw themselves as living abroad only temporarily,
reflecting the political and cultural discourse of return. By the end of the 19th century, the
political attitudes towards overseas movement had changed and living abroad was no
9
longer considered treason or a crime. Chinese who were successful elsewhere could
become an asset to the Chinese empire through the skills and expertise they acquired
overseas. In 1893 the lifting of the ban on foreign travel was in reality only a removal of a
defunct policy, as there had been illegal movements all through the prohibition period. This
act gave official recognition to diasporic Chinese for their contributions and it encouraged
them to identify not only with their provincial homes, but also with China and Chinese
culture.
Different political systems and geographical factors influence people of ‘Chinese’ descent
all over the world (Chow 1998). Certainly culture is continuously changing, and ethnic
Chinese have also developed distinct cultural expressions. Tu (1994) argued that such
cultural expressions have often been used generically to designate communities that are
culturally and racially similar but are otherwise unrelated. These Chinese may look similar,
but their thinking may be different (Chan 2001).
The formation of identities is subject to varying perceptions of culture, to the geography of
power hierarchies, and to strategic accommodations at local, national and transnational
levels. Increasing transnational movements and continuous transformations through the
intensification of flows of resources, people, capital and information have altered local
conditions in all aspects of life. As global flows constrain local production and
consumption, they also modify local cultures and identities (Axford 1995). As a
consequence of the creation of multicultural communities globally, cultural practices often
intersect with and blur the boundaries of place. This has led to a situation where the
construction of identity for migrants and their descendents often occurs in a state of
dilemma, thus transforming the collective notion of a shared Chinese identity. Their sense
of belonging is maintained through intrinsic social relationships between their country of
origin and country of settlement (Clifford 1997).
These overseas Chinese have created a number of successful firms in several industries
such as light manufacturing, real estate, and trading commodities (Yeung and Olds 1999).
By 2008, more than 60 million Chinese lived overseas, in Taiwan (23 million) and Hong
10
Kong (7 million), with another four and a half million in Singapore. Commercially
powerful, dominant minorities spread all over Southeast Asia. In today’s world of high-
speed travel and communications, this diaspora has become a source of strength and
tremendous leverage in the global economy. The overseas Chinese represent a powerful set
of organizing forces that will help to shape the future of China and the host countries. They
bring three things back to China:
1. Capital that is large-sale, mobile and intimately connected to China
2. Knowledge, comprising business acumen, technical know-how and a broad
awareness of how the rest of the world works
3. A cultural reservoir of Chinese identity built up outside China; another model for
being Chinese that brings the traditional values into the modern world. This ‘buffer’
serves as a coherent system where everyone from both east and west, from
traditional and modern societies, can find a comfort zone to learn about the opposite
side.
Their capital is impressive by any standards. In 2004, a Bank report by National Bureau of
Statistics (NBS 2004) put the GDP of this Greater China (in purchasing power terms) at
US$3.5 trillion, already more than that of Japan, and nearly half as big as that of the United
States. The same report estimated that ‘Greater China’ has already surpassed the United
States by 2002, with a purchasing power GDP twice as big as Japan’s and three times that
of Germany. China, for instance, held the world’s largest foreign reserve, at US$1.9 trillion
(NBS 2004). The foreign reserve of Taiwan stood at US$292 billions, which places the
country as the third largest in the world. It was estimated that fully three-quarters of the
hundreds of billions of dollars of investment capital flowing into China was coming from
overseas Chinese. Beijing was shrewdly encouraging this flow (Backman 1995). All of
China ‘special economic zones’ were set up all along the southeast coast, because they
were the areas that more than 90 percent of overseas Chinese called home.
At the upper levels of personal wealth, the overseas Chinese are, particularly, groups of
migrants that travel between homes in Hong Kong, Vancouver, London, Sydney and San
11
Francisco. Some spend so much time in the air that they have earned the nickname
‘astronauts’, and their children the title ‘parachute kids’ for the way they come for the
holidays from boarding schools (Harris and Ryan 1994).When these overseas Chinese go
back to the villages and counties that they or their ancestors come from, they bring with
them money and presents, wearing fine western suits and bearing tales of globe-spanning
commercial networks and enterprises that sound like magic cash machines. They instantly
become role models for those who stay behind. Their very existence sets up a vision of a
different future, of a China that is vigorous, prosperous, and unfettered by party or borders.
In Australia, ethnic Chinese come from a range of backgrounds, especially different
countries of origin. Thus, different regional, religious and social class backgrounds are
found in different capital cities (Harris and Ryan 1994). They also have very different
immigration and socio-economic profiles. Many of those born in Southeast Asian countries
have arrived in Australia under family migrant categories, while those from Northeast Asia
are more recent migrants and are more likely to arrive under skilled or professional or
business categories.
In the last twenty years, Asian families migrating to Australia have changed from
‘permanent’ migration to ‘semi-migration’ – the ‘astronaut’ families. Astronaut families are
a type of family arrangement found in migrant Asian families in which one or both parents
reside and work in their home country while the remainder of the family live in the host
country (Ip et al. 1998, Pe-Pua et al. 1996). The astronaut arrangement is not a preferred
option but an involuntary and temporary arrangement that is considered a better alternative
to unemployment and underemployment. The ease of flying between countries and the
better socio-economic background of these families make it easier for the parent or parents
to travel back and forth between the home and the host countries. This was unheard of
twenty years ago. These first generation Chinese entrepreneurs have facilitated the
exchange of ideas, goods and services. They form the bridges between different countries,
their country of origin and the host country (Pookong and Skeldon 1994).
12
1.3 Why Study Chinese Entrepreneurship?
Chinese entrepreneurship is related to several established disciplines including culture,
economics, management, psychology, sociology. There are several different approaches in
addition to these disciplines. A multi-theoretical approach was therefore adopted in this
study to study the five dimensions of these entrepreneurs in order to provide a rich insight
into Chinese entrepreneurship in Melbourne from different perspectives.
Schumpeter (1934 and 1939) formed the basis for understanding the entrepreneurial
process; his is the working definition of entrepreneurship that is used and implied in this
study. The main theme is how the Chinese start their businesses ventures by using the
knowledge, experiences and resources available to them to identify and exploit
opportunities; and what the consequences are of their entrepreneurship for themselves and
the economy. Ripas (1998) and Wennekers and Thurik (1999) were also found to be
explicitly relevant in this study, for explaining economic growth and overall entrepreneurial
success.
This study specifically seeks to explore and provide information on these entrepreneurs in
small and medium enterprises (SMEs), including their personal profiles and the types of
entrepreneurial ventures they created; their motivations for business ownership and the
human and financial resources available to them; and their network affiliations (known as
guanxi connections in Chinese culture); and especially the difficulties encountered during
the entrepreneurial process – the start-up, development and expansion of their business
ventures.
Immigration has always been high on the political agenda of the Australian Government.
To date, there has been little policy specifically addressing immigrant entrepreneurs in
Australia, even though there has been a Business Migration Programme since the 1980s
(Strahan and Luscombe 1991). Australia is one of many countries (such as Canada, the
United States) that have attracted immigrants since its first settlement. Coincidentally,
13
immigrants have had a higher rate of self-employment and entrepreneurship than their non-
immigrant counterparts.
In 2006, one in four of the Australian population of 18.5 million people was born overseas
(ABS 2006a). These first generation immigrants, together with their Australian-born
children – the second generation – comprise over half of the population of Australia’s
largest cities of Sydney, Melbourne, Adelaide and Perth (Collins 1991, Collins 2000).
Entrepreneurial activities have become stronger and more important aspects of the life of
immigrants in Australia, and their businesses continue to be important in the economic
growth of Australia. This is reflected in the existence of numerous ethnic communities in
Australia (Chin 1988, Ingley and Selvarajah 2002). To understand ethnic Chinese
entrepreneurship, the author believes that the underlying cultural background (Confucian
Piety) plays an essential role in laying the foundation and the seeding for further
entrepreneurship; this it will be discussed in full in Chapter 4.
Entrepreneurship among different immigrants and different factors is important in shaping
the economic development and contributing to the economic potential in Australia. The
influences should be explored and utilized by all levels of the whole community. Some of
the factors for consideration are as follows:
• The influx of skill and economic benefits that these entrepreneurs create and grow
should not be underestimated. They stand as the next connection to the local and
outside economies.
• The traditional view of immigrant entrepreneurs as uneducated, unskilled and poor
no longer reflect reality (Gartner 1984).
• The same immigrants are also found to seek upward social mobility by having or
providing better education to their children. Certain ethnic groups such as Chinese
in early Gold Rush period provided classic examples of this phenomenon. A study
by Gartner (1984) indicated that entrepreneurs are better educated than the general
population, especially in the second generation.
14
• A study by Carney and Gedajlovic (2000) supported the flow of routine
manufacturing from high labour cost to lower labour cost locations in most Asian
countries.
Therefore, the detailed discussion backed by empirical input regarding the different
attitudes of two generations of Chinese towards entrepreneurship can provide many clues to
the factors that are influencing entrepreneurs to act differently, such as the social, economic
and cultural environments of Australia. Earlier studies on Australian immigration history
have always been a time-linear narration. In fact, most of them concentrate only on
categorizing history into different phases of Australian immigration. It is difficult to find an
intense study on ethnic Chinese entrepreneurship in the second generation, i.e. those who
were born here or who arrived in Australia as minors.
Despite information on small business formation and the economic contribution of Chinese
entrepreneurs in Australia and other developed countries (Backman 1995, Chin 1988,
Collins 2002, Collins 2003, Li 1988), little is known of the possible transition change from
the first to the second generation of Chinese in Australia. This scarcity of research on the
two generations of entrepreneurs in Australia is a critical omission. There is also a need for
this research in an economic and social context in order to identify the contributions of the
newer entrepreneurs to the modernization of developing economies. Such research will be
also useful in understanding the particular needs, and pertinent issues concerning the
promotion and development of the entrepreneurial activities of both present and future
generations.
The thesis focuses on the entrepreneurial journey of two generations of Chinese immigrants
and underpins the telling effects of culture and business management. These findings will
help future researchers to create favourable quotients for further development of both
entrepreneurship and society.
15
1.4 Research Objective
The primary objective is to investigate the success achieved by first and second generation
Chinese entrepreneurs so as to improve understanding of their impact and contribution in
the development of Melbourne. Ultimately, this study seeks to provide an insight into their
entrepreneurial activities and their social and economic contributions to themselves and the
nation, leading to Chinese being recognized as an important source of economic growth.
This will provide an avenue for these entrepreneurs to understand themselves better. It is
expected that the outcome from this research will lead to supportive policies and
programmes for these entrepreneurs, and will also serve as reference for government policy
makers, who are responsible for small and medium enterprises (SMEs), and private sector
development.
A further objective of this research is to study major differences between the two groups,
with particular references to their views, execution and implementation of entrepreneurship.
The findings of this research will enhance the understanding of the entrepreneurial
differences between the generations.
The next contribution of this research is to develop a profile of successful Chinese
entrepreneurship in Melbourne. As contributors to economic growth and nation building,
understanding the needs and wants of this group will be important to policy makers.
1.5 Research Questions Five dimensions of Chinese entrepreneurs from the first and second generations were
identified for investigation and exploration, in order to achieve the objectives of the study
outlined earlier. These are their background, their motivations for business ownership,
traditional Confucian values, difficulties and hurdles, and their overseas expansionary
vision. Ultimately, the study concentrates on their successes.
16
These five dimensions were identified based on past studies into Chinese entrepreneurship
in western countries such as Australia, the USA and Canada, and some Asian countries
(Collins 1996, 2003, Hsing 1996, Li 1988, Light 2002). This study is therefore constructed
on six research questions: This study looks at the perceptions and views of both first and
second generation ethnic Chinese entrepreneurs in Melbourne to answer the following:
• Research Question 1: What are the background factors contributing to the success of the
entrepreneurs?
• Research Question 2: What are the motivational factors that contribute to the success of
the entrepreneurs?
• Research Question 3: What are the traditional Confucian values that contribute to the
success of the entrepreneurs?
• Research Question 4: How do the difficulties and hurdles encountered during the
entrepreneurial process contribute to the success of the entrepreneurs?
• Research Question 5: How does their overseas expansionary vision contribute to the
growth of their entrepreneurial ventures?
These questions are based on the gaps identified earlier in the thesis; further discussion is in
literature review in chapters 2, 3 and 4.
1.6 Theoretical Framework of the Study
Chinese entrepreneurship will be examined in the light of existing theories and studies in
order to develop a better understanding of the Chinese, and to determine the extent to which
these theories apply in a local and national economic context. Hence, five hypotheses have
been formulated and will be tested. These hypotheses comprise the five identified
dimensions of successful entrepreneurs and are based on the various theoretical
perspectives adopted in the study. Each of these theoretical perspectives will be supported
by its corresponding body of empirical research. The use of a multidisciplinary approach in
17
the study of Chinese entrepreneurs underscores the diverse nature of the entrepreneurial
phenomenon and the fact that no single taxonomy can capture all of the important
differentiating variables. These theoretical perspectives utilized in the study are
summarized below. An in-depth analysis of them will feature in the literature review.
At base, this thesis is about Chinese entrepreneurs in Box Hill. The focal point of the
investigative light is on the understanding of the elements contributing to the success of
their businesses. Chinese entrepreneurship, as explained earlier, is related to several
established disciplines including Chinese traditional values, cultural background, overseas
experience, economics, management skills, personal traits and sociology.
This study seeks to explore and provide information on the five dimensions. Accordingly,
five hypotheses based on these dimensions derived from entrepreneurship literature will
guide this study. In this introductory chapter, an overview of the content of this thesis is
provided.
Secondly, the study is also interested in immigrant entrepreneurship; a multi-theoretical
approach is therefore adopted in the study in order to compare different theories and to find
out the contributing factors to immigrant entrepreneurship. Therefore, the economic impact
on the local community and economic growth principles are relevant to the study. The
background (Bennet and Dann 2000, Schumpeter 1934, Kirzner 1999) on the
multidisciplinary approach adopted in the theoretical framework of the thesis, with views
on entrepreneurship, psychological aspects, motivations, resource-based views and
networking perceptions in entrepreneurship will be summarized. This background
information on the principal issues of analysis in the thesis are further discussed and
examined in the next chapter, which is the first part of the literature review.
Thirdly, different theories of the ethnic enclave economy will be studied. These theories are
important to illustrate the different strategies of settlement adopted by immigrants upon
their arrival in Australia. In view of this, other entrepreneurial theoretical perspectives
18
which have been proven in literature as relevant factors in explaining entrepreneurial
behaviour and success also form part of the theoretical framework of this study.
In this thesis a number of hypotheses are developed to explore the factors that influence
first and second generation ethnic Chinese entrepreneurs in Box Hill, Melbourne. These are
covered in detail in the later literature review chapters. However a summary detailing the
development of the hypotheses is presented below.
1.6.1 Background of the Entrepreneurs This study is informed by the literature pertaining to human and financial capital and the
literature pertaining to social learning theory, which provides a complementary perspective
to the resources-based view. Theoretical perspectives in the specified areas are drawn upon
to develop a hypothesis about the background of the Chinese entrepreneurs that is
associated with their educational level, prior work experience, entrepreneurial family
background experience, as well as the extent of their finances. Guanxi connections, which
include personal networking and local know-how is also included in this investigation
(Yang 2002). Research has proved the importance of human and financial capital to the
creation and success of entrepreneurial businesses. The possession of human capital
(consisting of capabilities, business skills and knowledge derived from education, previous
work experience, entrepreneurial family background) and financial capital (consisting of
access to funds) has been found to differentiate successful entrepreneurs from the less
successful ones (Bandura 1977; Brush et al. 2006). Thus it is hypothesized that:
H1. The background of the entrepreneurs is related to the success of their businesses.
1.6.2 Motivations Previous studies (Bennett and Dann 2000, Fielden and Davidson 2005) have investigated
reasons why entrepreneurs choose the path of entrepreneurship. These studies conclude that
a combination or range of factors, rather than any single factor alone, provides the impetus
for entrepreneurs to create their own business venture. The reasons normally given for
19
Chinese venturing into business are complex and multiple, such as migration, profit
maximization and inheritance of family businesses (Yeung 1999, 2000). Generally, the
motivation for the ventures is based on personal attributes and a vision of their
entrepreneurial pathway. For instance, psychological motivations such as freedom, desire,
the potential to make more money, and strong belief in one’s own capability have been
widely investigated with regard to their influence on businesses (Lerner et al. 1997).
The second major motivation can be explained by ‘push and pull’ theory. This is now a
common way of explaining different motivations to start a business (Amit and Muller 1995,
Brush 1992). Push factors are elements of necessity such as insufficient family income,
dissatisfaction with a salaried job, unemployment and a need for a flexible work schedule
because of family responsibilities. Pull factors relate to independence, self-fulfilment,
entrepreneurial drives and desire for wealth and social status (Ducheneaut 1997). It is
therefore likely that the motivational factors of Chinese entrepreneurs influence their
business success; hence the following hypothesis:
H2. Entrepreneurial success is related to the motivation of the entrepreneurs.
1.6.3 Traditional Confucian Values Confucianism has been woven into the very fabric of Chinese society. For hundreds of
years, Confucianism has been actively taught. No matter what a person’s religion is,
Confucianism defines the proper mode of conduct within society and within the family
(Nish et al. 1996). Chinese families use stories, sayings and special terms to instill
Confucian ideals in children. Although it is not a religion, Confucianism continues to exert
a major influence on the everyday lives of Chinese people (Chan 2008, Jabobs et al. 1995).
Research has revealed that, even in overseas Chinese family businesses, the most important
family values are Confucian (Jacobs et al. 1995, Lee 1996). These Chinese family values
and interpersonal patterns contribute to business development and success in different cases
(Yan and Sorenson 2006). The influence of Confucianism and its incorporation into the
20
lives of so many for so long has built a tight matrix between the culture and the
psychological character of the people (Cheng 1997).
Based on the above perspectives, traditional Confucian values will be explored to find out
whether there is any relationship between Chinese business success and these values. This
leads to the following hypothesis:
H3. Entrepreneurial success of the Chinese is related to traditional Confucian values.
1.6.4 Difficulties and Hurdles
The fourth hypothesis of the study rests on the premise that Chinese immigrant
entrepreneurs face a lot of barriers in their entrepreneurial endeavours that impede their
progress. Chinese entrepreneurship literature (Selvarajah 2008, Wickberg 1994) points out
a number of barriers that Chinese entrepreneurs face such as infrastructure barriers, social
and cultural barriers, educational and occupational barriers, role barriers and behavioural
barriers. Other external difficulties and hurdles include poor access to market information,
technology and finance, poor linkages with support services and an unfavourable policy
and regulatory environment (Smart 2003, Tseng 1995). It has been observed that the
reduction of these problems results in the greater success of Chinese entrepreneurs
(Kitching et al. 2005); hence the following hypothesis:
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs.
1.6.5 Overseas Expansionary Vision Overseas business connections are important in how local firms approach creating new
businesses (Zhou 2004, Yeung & Olds 1999, Tsang 1998). A vision to utilize the advantage
of these connections is a form of innovation. Schumpeter (1934, 1943) argues that an
21
entrepreneur is the innovator who introduces something new into an economy.
Schumpeter’s definition and description of entrepreneurship not only addresses economic
factors of entrepreneurship but also emphasizes innovative, growth-oriented ventures.
Drucker (1985) supported the notion that entrepreneurship refers to the ability of new firms
to create innovation. Every innovation successfully introduced by business firms, large or
small, new or old, creates new demand for goods and services and therefore creates new
wealth. Thus, the importance of the overseas expansionary vision will be investigated.
However, the vision is not just about money. These overseas Chinese are bearers not just of
the new ways, but also of the old – of the dominance of family, clan and village, the
importance of face, the predominance of values. They are a root that has not been cut back,
a place where ‘blood is truly thicker than water’. Thus, it is hypothesized that:
H5. Entrepreneurial success is related to the overseas expansionary vision of the
entrepreneurs.
Hence, based on the hypotheses, the study compares the differences between the first and
second generations of Chinese entrepreneurs in Box Hill, Melbourne, with emphasis on
their views, execution and implementation of entrepreneurship. This is an additional
objective of the present study.
1.7 Summary of the Hypotheses of the Study Based on the above discussion, five hypotheses (derived from the five identified
dimensions of the Chinese entrepreneurs from two different generations) have been
formulated and will be tested for the first and second generation Chinese entrepreneurs in
Melbourne. Each of these theoretical perspectives will be supported by its results.
H1. The background of the entrepreneurs is related to the success of their businesses.
H2. Entrepreneurial success is related to the motivation of the entrepreneurs.
H3. Entrepreneurial success of the Chinese is related to traditional Confucian values.
22
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs.
H5. Entrepreneurial success is related to the overseas expansionary vision of the
entrepreneurs.
Diagram 1.1 shows the diagram of the theoretical framework of the study; H= Hypothesis.
Diagram 1.1 Theoretical Framework of the Study
Based upon the previous literature review, a theoretical framework was developed to find
the relationships among the five dimensions that contribute to business success.
Motivation
H2
Difficulties and
Hurdles H4
Overseas
Expansionary Vision H5
Traditional Confucian
Values H3
Background
H1
Entrepreneurial Success
23
1.8 Box Hill – Chinatown Before turning to the review of literature in the next chapter, this section presents a basic
demographic and geographical description of Box Hill, as well as an overview of the
migration and business pattern in the area.
Prior to 1980, Box Hill was the home of immigrants from Europe, especially from
Germany, Italy and Greece. Since the 1980s, waves of Vietnamese, Cambodians, and in
recent years, Hong Kong Chinese, Taiwanese and mainland Chinese have moved to Box
Hill, creating the Chinatown of today. Most of the Chinese ethnic entrepreneurs in the older
and mature part of the City of Melbourne’s Chinatown are from Hong Kong and Macau.
This suggests that the early wave of immigrants to Australia prior to 1991 was from Hong
Kong and its surrounding region. Box Hill, a relatively new ethnic cluster, has the majority
of its inhabitants from Mainland China. Mandarin and Cantonese are spoken equally by the
Chinese inhabitants of the two Chinatowns. Again this suggests that roughly 50 percent of
the Chinese have come from Guangdong province and Hong Kong where Cantonese is the
common dialect (Selvarajah et al. 2008)
Of Box Hill’s 10.59 percent Chinese population, 6.19 percent are Chinese by birth. Of the
City of Melbourne’s 10.42 percent Chinese population, 3.39 percent are Chinese by birth.
(The term ‘Chinese by birth’ refers to ethnic Chinese originating in Mainland China,
Taiwan, Hong Kong and Macau.) This again suggests that of the two Chinatowns, Box Hill
has more recent migrants compared to the City of Melbourne.
Box Hill, located 14 kilometres east of Melbourne, is bounded by the Eastern Freeway to
the north, Elgar Road to the west, Middleborough Road to the east, and Canterbury Road to
the south. The early settlement of the city can be traced back to the 1850s, when the main
activity was agriculture, such as mixed farming, vineyards, and orchards. The significant
development of the township, however, commenced after the 1880s following the
development of areas closer to Melbourne. A market was opened close to Box Hill railway
station in 1895 which enhanced the city’s commercial prominence. During the 1940s and
1950s, the city experienced rapid growth, and today Box Hill is one of the main
24
commercial centres in Victoria. The suburb is home to a large Asian community, and it has
many Chinese and South East Asian cafes, bars, restaurants, and grocery stores.
The emergence of Box Hill as another Chinatown was due to the refugees from Southeast
Asia in the 1970s. To accommodate the newcomers, the Immigration Department placed
them at the Eastbridge Hostel, a Federal-funded immigration hostel in Nunawading.
Slowly, the immigrants settled down in the suburbs near to the hostel (a similar pattern also
occurred in the formation of business clusters at Footscray and Springvale). Naturally, Box
Hill was one of the places that the newcomers chose to stay as it was close to the hostel.
The immigrant hostel and subsequent formation of a micro-cluster had a ‘honey pot effect’
on the formation of a bigger cluster in Box Hill during the 1990s.
From the mid-1980s, more immigrants from Hong Kong and Taiwan arrived to stay in Box
Hill. They were professional, technical and managerial persons, and some were quite
wealthy (especially those who came to Australia under the Business Migration program). In
1989, after the Tiananmen incident, a lot of Chinese students who were studying in
Australia were granted permanent resident status. This contributed to the growth of Box
Hill as the second Chinatown in Melbourne. From 1991 to 2001, the number of Chinese-
speaking immigrants living in Box Hill jumped from 1281 to 2949 (Selvarajah et al. 2008),
an increase of 130 percent. On the other hand, the number of Vietnamese-speaking
residents remained stagnant and the number of major ethnic European (such as Greeks and
Italians) immigrants declined. To serve the needs of its large Chinese population, retail
shops, professional service providers such as accountants and solicitors, real estate brokers
and other social services providers sprang up in Box Hill, making it a new Chinatown (City
of Whitehorse Community Profile).
1.9 Definitions A brief summary of definitions here provides the basic concepts and meanings of this
study.
25
1.9.1 Migration
Migration in the context of this thesis may be defined as the international movement of
people from one place to another (www.britannica.com/ebi/article-9275837). This
movement can be permanent, for purposes such as uniting families or for business ties, or
temporary, with the intention of education or work. It can also occur as a result of factors
such as famine, political unrest or wars. Nevertheless, it is usually associated with an
expectation of better prospects after migration, both for the migrants and for the country of
destination.
1.9.2 First and Second Generation Chinese The combination of information on individual and parents’ birthplace makes it possible for
people to be identified as first, second or third-plus generation Australian. According to
ABS (2006a), the groupings are classified as follows:
• First generation refers to Australian residents who are born overseas.
• Second generation refers to people who are born in Australia but have one or both
parents who are overseas-born.
• Long-established Australians refers to people who are born in Australia whose
parents were also born in Australia.
While the definition of generational groupings according to birthplace is conceptually neat,
i.e. mutually exclusive, the definition quickly proves problematic in the face of empirical
realities, particularly in the classification of Australian-born Chinese (ABC). Firstly,
although based upon the birthplace of individuals and their parents, the definitions do not
acknowledge their ‘ethnic’ background. For the purposes of this study, individuals, whether
‘pure’ or ‘mixed’ Chinese, who acknowledge their Chinese heritage are included in this
study. Self-acknowledgment of genealogy and race is deliberate as far as the study is
concerned.
26
Secondly, the definition of third-plus generations suggests that both parents have to be
Australian-born in order for Chinese to be categorised as long-established ABC
(Australian-born Chinese). For the purposes of this study, only one parent needs to be
Australian-born for their descendents be considered third generation, and so on for the
higher orders. This greater flexibility is deliberate, as the study is concerned with the
impact of long-term residence on identity construction. However, in this study, only the
first two generations will be considered. Thirdly, according to Khoo (2004), it is not
possible to differentiate between third and higher order generations in the Australian 2001
census data.
1.9.3 Acculturation (9 years old)
In this study, the second generation includes those who arrived in Australia as a minor and
before they reached their tenth birthday. This age cut-off assumes an insignificant effect of
acculturation on entrepreneurial journeys due to earlier settlement in a foreign country. In
other words, they are treated the same as those who were born here in Australia. This cut-
off criterion is important, and its validity can be found in a similar study by Barrett et al.
(2002), who examined the cultural adjustment experiences of 158 children and adolescents
from former-Yugoslavian (N-42), Chinese (N=60) and Anglo-Australian (N=56)
backgrounds. In the study by Barrett et al (2002), to ensure accurate cultural representation,
all participants were born, and spent a number of years growing up in their culture of origin
with different lengths of time ranging from 2.5 months to 7.5 years.
In addition, for those Australian-born Chinese and those who have grown up in Australia,
though they may speak Chinese (either Mandarin or Cantonese) at home, their main
language is English (ABS 2006b). In other words, the Chinese language which is a second
language may not be spoken at all. Since language is the core factor of culture and identity
(Barker 1992), it can be argued that these young Chinese have become more Australian due
to the higher usage of English than Chinese (Chung 2006). Although the second generation
has been exposed at least to two cultures (the Australian culture in the society and the
Chinese traditional culture in their family, in which the parents were the first generation in
27
Australia), they are more westernised than their parents. This study also serves as an
examination of the Chinese and Australian ways of entrepreneurship.
1.10 Thesis Outline
In order to track down the evolution in the outlook and attitude of the Chinese immigrants
towards entrepreneurial ventures over the generations, the entrepreneurial views of Chinese
immigrants in Box Hill in Victoria were studied; these immigrants have their origins in
Southeast Asian countries and mainland China. Various relevant literatures and methods of
analysis will be used to substantiate the hypotheses in the following sections:
Introduction (Chapter 1)
Chapter 1: General Overview and Purpose of this Study
This chapter provides the background and the layout of the thesis. This thesis is divided
nine chapters in total. It introduces the problem statement, the research questions and the
hypotheses.
Literature Review (Chapters 2 to 4)
Chapter 2: Different Views of Entrepreneurship
Chapter 2 contains a brief literature review and definitions of entrepreneurship. In
particular, traditional Chinese business and management styles will be discussed. These
will be compared to western styles. The emphasis in this thesis is placed on Chinese
entrepreneurship.
The interpretation of entrepreneurship may vary between the Chinese and the Australian
business communities, as humans are highly influenced by elements such as philosophies,
traditions and cultures. The thesis explores the notion that the second generation Chinese
28
immigrants will gradually move towards a more Australian values base, while their
predecessors will hold on to their traditional Chinese culture mainly.
Chapter 3: Chinese Entrepreneurs and Ethnic Enclaves
Chapter 3 contains a brief history of Chinese immigrants and of Australian immigration
history. Immigrants from different countries have long shaped Australian history at
different times, including its sociological, demographic and economic changes.
While the review of the subjects associated with entrepreneurship creates the assembly line
of the relevant clues, the brief history of Chinese immigrants as well as the history of
immigration in Australia is important to demonstrate the development of Chinese
entrepreneurship. These immigrants came from many parts of the globe carrying their
unique perceptions based on the philosophy and culture of their respective homelands.
Gradually all these divergent views and forces merged into the mainstream of immigrant
activities in Australia and thus started shaping the history of this country.
The significance of different ethnic enclave economies, especially the formation of
Chinatowns in Melbourne, will be discussed. The information gathered will be used to
explain the importance of networking and business formation within the Chinese
communities.
Chapter 4: Characteristics of Successful Chinese Entrepreneurs
This chapter illustrates the essences of being a Chinese entrepreneur in Australia. The
chapter investigates the entrepreneurial profiles and the activities of Chinese entrepreneurs.
The elements of successful entrepreneurship will be discussed. Though there are
similarities between the two generations of Chinese entrepreneurs, the chapter will explore
the entrepreneurial pathways of the two groups in order to highlight differences.
29
The process of immigration is a multi-dimensional process, where migration is just one
element among the other variables like the law of the land or the past experiences of each
individual, as well as the influence from other co-ethnic immigrants (Selvarajah 2004). It is
the chemistry between such variables that determines the outcome – as for example, the
earlier immigration policies were not receptive to Chinese immigrants in particular (Collins
2000, 2002).
Methodology (Chapter 5)
Chapter 5: Research Design and Methodology
This chapter details the design and testing of the questionnaires. The methodological
framework of this research will be presented, including the methods and research
techniques that are applied. Different statistical tools are used to help interpret the results
gathered by the questionnaires. The process involves different quantitative analyses of the
data gathered from two hundred (200) subjects of both first and second generation
entrepreneurs.
SPSS software was for carrying out various statistical tests. Structural Equation Modelling
(SEM) was also used to establish the conceptual model for this study.
Analysis and Results (Chapters 6 to 8)
Chapter 6: Analysis – Demographic Profiles of the Chinese Entrepreneurs
The results are divided into two chapters (Chapter 6 and Chapter 7). Chapter 6 relates to the
demographic findings, such as sample size, country of origin, gender, industry, position,
targeted businesses, targeted customers, age, religion, spirituality and how businesses are
set up.
30
Chapter 7: Analysis – The Five Dimensions of Chinese Ethnic Entrepreneurship
This chapter reports on the results from quantitative data related to the questions on the
views of entrepreneurship. Results are presented using frequency percentages, according to
the sequence of the sections in the questionnaire survey. More statistical tools, such as scale
developments, are used to develop patterns of agreement and themes. These results will
provide more information about the five dimensions being investigated in this study.
Chapter 8: Testing of Hypotheses and Discussion of Results
Fourteen elements contributing to the success of businesses were identified. They all show
high importance as contributing factors. Regression analysis was carried out on the results
from both generations. The results from the analysis were used to test the five hypotheses.
The results appear below:
H1. The background of the entrepreneurs is related to the success of their businesses –
Supported
H2. Entrepreneurial success is related to the motivation of the entrepreneurs – Supported
H3. Entrepreneurial success of the Chinese is related to traditional Confucian values –
Supported
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs – Supported
H5. Entrepreneurial success is related to the overseas expansionary vision of the
entrepreneurs – Supported
Chapter 9: Conclusion
This chapter discusses the impact and the role of Chinese entrepreneurs in Australia. The
concept of ‘staircase effects’ is introduced to illustrate the effects of various elements
during the process of adaptation and adoption by these Chinese. Their journeys of
31
entrepreneurship show the importance of other issues such as the relationship and the future
of the Australian and Chinese economies.
1.11 Summary This study seeks to explore and provide information on five dimensions of first and second
Chinese entrepreneurs: the background of the entrepreneurs; their motivations for business
ownership, traditional Confucian values, difficulties and hurdles, and overseas
expansionary vision. The questions are related to Chinese entrepreneurship, the influences
of migration and the differences between two generations of entrepreneurs. Five hypotheses
based on these dimension will guide this study.
In this introductory chapter, an overview of the content of this thesis has been provided. A
brief background on the multidisciplinary approach adopted in the theoretical framework of
the thesis, including psychological, motivations, resource-based views and networking
perceptions in entrepreneurship has been introduced. An overview of the definitions of
entrepreneurship has been provided. Information on the study area, Box Hill, has also been
presented. This background information on the principal issues of analysis in the thesis are
further discussed and examined in the next chapter, which is the first part of the literature
review (Chapters 2 to 4).
32
Chapter 2
Different Views of Entrepreneurship
2.1 Introduction The literature review is organized into three chapters (chapters 2, 3 and 4). The process of
understanding immigrant entrepreneurship and comparing Chinese and western
entrepreneurship commences in this chapter with a review of literature on defining the
principal components differentiating Chinese entrepreneurship:
• Definition of entrepreneurship itself;
• Basic elements of entrepreneurship;
• Theories of immigrant entrepreneurs;
• Comparison between Chinese and western entrepreneurships;
• Comparison of individualism and collectivism.
This chapter identifies gaps in the entrepreneurship literature especially in illustrating the
difference in traditional Chinese views and those of the westerners. Furthermore, the
importance of Chinese culture will be detailed as it defines the emphasis and influences of
traditional values on Chinese entrepreneurship. The importance will highlight the making
of successful businesses in the Chinese communities in earlier days, especially in the first
generation entrepreneurs. A comparison between Chinese and western entrepreneurships
will show the change in the entrepreneurial behaviour of Chinese entrepreneurs in
Australia.
In chapter 3, the different phases of Australian immigration will be used to illustrate the
history of Chinese entrepreneurship in Melbourne. In addition, the formation of
Chinatowns and the three theories of ethnic enclave economies will be discussed. In chapter
4, various elements of Chinese entrepreneurship will be discussed. These elements are
33
influenced by the cultural background, education, motivations, resources availability, prior
business experiences, management and organization skills. A detailed discussion of each
element is needed.
2.2 Definitions of Entrepreneurship The definitions of entrepreneurship in literature are broad and they vary from one author to
another. Vanderwerf and Brush (1989) in their review of twenty-five definitions for
entrepreneurship indicated that entrepreneurship has been defined as a business activity
consisting of some ‘intersection’ of the following human behaviours:
• Creation – which is the establishment of a new business unit;
• General management – which is the managerial direction of or resource allocation
for a business;
• Innovation – which is the commercial exploitation of some new product, process,
market, material, or organization;
• Risk taking – which is the acceptance of uncommonly high risk from the potential
losses or failure of a business unit;
• Performance intention – which is the intent to realize high levels of growth and/or
profit through a business unit.
By 1800, many French economists and writers had given a special meaning to entrepreneur
and entrepreneurship, with differences arising largely from the characteristics of the sector
of the economy that chiefly attracted their interest and attention. For example, the French
aristocratic industrialist Jean Batiste Say (1828), with practical business experiences, wrote
that the chief contribution of the entrepreneur was to combine and coordinate factors of
production. He perceived an entrepreneur as a manager.
Other researchers, also commenting on the diversity in defining entrepreneurship, think that
because entrepreneurship is a wide spread business phenomenon it embraces a diffuse
range of economic activities. Thus, definitions differ and vary as they try to adapt to the
34
specific characteristics of these differing economic activities. The number of fields
available for entrepreneurial endeavour, the forms which such endeavour may take and the
scope for profitable activity through market exchange may vary considerably depending on
whether the society in question is pre-capitalist, early or late capitalist, socialist (Kallenberg
1986).
In this chapter, entrepreneurial behaviour that involves activity and success of
entrepreneurs will be examined. A general classification of these explanatory variables in
literature reveals that these variables stem from different theoretical and disciplinary
backgrounds. The chapter commences with a brief review of the various economic
perspectives on entrepreneurship, particularly the theories that best explain the ingredients
of making of successful entrepreneurs. This review will then lead to a general working
definition of entrepreneurship derived from different authors’ views of entrepreneurship,
which form the basis of investigating entrepreneurial process.
Other theoretical perspectives such as psychological, motivational and resource-based
views, networking and innovation, which have been theorized and empirically proven in
literature as determinants of entrepreneurial behaviour and success, will be reviewed also.
Hypothesis One (H1) is used to check the influences of these background factors of the
Chinese entrepreneurs on the business success. The hypothesis (H1) implies that research
about Chinese entrepreneurship needs to take different perspectives and backgrounds into
consideration. In addition, the sociological and economical contexts of the entrepreneurial
activity need to be included in the equation for study.
H1. The background of the entrepreneurs is related to the success of their businesses.
Such a multi-disciplinary approach to the study of entrepreneurial behaviour is important,
since entrepreneurship scholars argue strongly that the entrepreneurial phenomenon cannot
be adequately explained by one theory alone and, a multi-disciplinary approach is
recommended (Campbell 1992, Rauch & Frese 2000, Ripsas 1998, Schumpeter 1954).
35
Thus, a combination or range of factors is needed to explain entrepreneurial behaviour or
success.
In the western world, entrepreneurship is a pattern of behaviours, a style of management
which is concerned with obtaining and managing resources to exploit opportunity (Glezer
1998, Massey 2005). Entrepreneurs deal with risk in strategy creation with a quick initial
screening using a careful, but limited, analysis to evaluate the quality of an idea, but then
they stay flexible throughout the process of implementation. The pursuit of opportunities is
not constrained by resources which are currently available and controlled. Resource
exploitation is, therefore, seen as a manageable challenge, but this in turn demands a clear
appreciation of risk and, invariably, a strongly developed ability to network within the
organization and its environment (Greene & Chaganti 2004, Yoon 1991). Other theoretical
perspectives such as psychological, motivational and resource-based views, networking and
innovation, which have been theorized and empirically proven in literature as determinants
of entrepreneurial behaviour and success, will be reviewed also. Hypothesis Two (H2) is
used to check these motivational factors and the influences on the business success.
H2. Entrepreneurial success is related to the motivation of the entrepreneurs.
An important issue arising from the review of the developmental definitions of the concept
of entrepreneurship is that many of the definitions, theories and works of literature on
entrepreneurship have emerged from Europe, America and other western cultures.
Definitions are rather based on various researchers’ empirical studies, observations,
fieldwork and culture. This, to a large extent, shows that the concept and definition of
entrepreneurship is context or culture bound – which is usually from a westerner’s point of
view (Ahlstrom et al. 2004, Chu 1995). That is, it depends on the context or the angle from
which one is analyzing it. The issue therefore is whether the insight into entrepreneurship
based on these western countries can be successfully exported to other non-western
countries such as China and other Asian countries. The importance of this issue cannot be
ignored, as it goes to the validity of attempts to aid and support the study of Chinese
entrepreneurship internationally with any model, because of emphasis on Confucianism and
36
other traditional Confucian values (Fouts & Chan 1995). These factors will be discussed in
the following chapters.
If culture is enmeshed with entrepreneurship, there must be differences and those
differences are likely to vary from one race to another (Gilroy 2000, Kotkin 1993). This
study therefore has a considerable interest in finding out just how much Australian and
other western entrepreneurs differ from Chinese entrepreneurs. This is another important
gap identified in the literature in this study. Hypothesis Three (H3) is used to check the
validity of the influences of traditional Confucian values on entrepreneurship behaviour.
The hypothesis (H3) implies that research about Chinese entrepreneurship needs to take
cognizance of intersections of race and entrepreneurship. In addition, the socio-cultural and
economic context or the environment of the entrepreneurial activity needs to be included in
the equation for study.
H3. Entrepreneurial success of the Chinese is related to traditional Confucian values.
2.3 Factors for Successful Entrepreneurship Yusuf A (1995) carried out research in the South Pacific islands where respondents were
asked to identify and rank the factors that they perceived as critical for success in small
business. Several possible factors for success were suggested and classified as follows:
• Good management – the ability to develop and effect good business plans, to obtain
and employ resources effectively, to balance traditional obligations with business
demand, and to accurately keep records and control finances.
• Satisfactory government support – provision of basic business Set-up, training
facilities, tax incentives, and protection against competition from big businesses.
• Marketing factors – especially in relation to location, the market and size of
demand, and sales promotion skills.
• Overseas exposure – tour of business facilities, residency, study, and/or
apprenticeship training abroad.
37
• Level of education and training
• Access to finances and level of initial investment
• Prior experience and traits such as self-confidence, charisma, perseverance, local
reputation and trustworthiness
• Prior experience in business
• Political affiliation
The results showed that the qualities and the making of entrepreneurs are universal and
similar (Basu 2004, Walker & Brown 2004). They are not restricted to one race or one
country. Therefore, although background and upbringing of the Chinese entrepreneurs are
different, reduction of the difficulties and hurdles encountered during the entrepreneurial
journeys should not be different to the success of businesses. Consequently, this argument
forms the basis of Hypothesis Four (H4).
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs.
In essence, the process of entrepreneurship is a result of an individual’s actions, and the
basic factors are as follows:
Potential Seeking – Propensity for risk taking. The essential element here is that of
taking on adventures or risky undertakings that are full of uncertainty. Cantillon (1931)
stressed the importance of the entrepreneur as an arbitrageur, who conducts all exchanges
and bears risk as a result of buying at certain prices and selling at uncertain ones.
Cantillon’s entrepreneur is perceptive, intelligent and willing to take risks: his role is to
bring the two sides of the market together, bearing all the risks involved in this process.
Risk-taking propensity remains a key aspect of the entrepreneurial psyche as visualized by
American researchers (Carland et al. 1996). To these researchers, risk-taking is a primary
element of entrepreneurship. However, some studies have indicated no significant
differences in risk-taking propensities for entrepreneurs as compared to the general
38
population (Brockhaus 1980, Sexton and Bowman 1983), but other have discovered a
higher propensity for risk-taking among entrepreneurs (Carland et al. 1995).
Innovating. Entrepreneurship is the means through which the creation of new
combinations is to be brought about .This characteristic is emphasized by Schumpeter
(1934, 1945) and central to the American model of entrepreneurship. Schumpeter’s view of
entrepreneurial innovation was rooted in the classical theories of economists such as Say
(1828). In entrepreneurship literature, innovation remains a frequently identified functional
characteristic of entrepreneurs (Brockhaus 1982, Gartner 1990, McClelland 1961). Drucker
(1985) actually defined entrepreneurship as innovation in a business setting.
Even though innovation is a necessary element of entrepreneurship, it is insufficient to fully
circumscribe entrepreneurial behaviour because of the broad parameters of the function.
Nevertheless, the preference for innovative behaviour is firmly established as a
distinguishing characteristic of an entrepreneur. For example, Carland et al. (1984)
proposed that innovation is the critical factor in distinguishing entrepreneurs from
managers and small business owners.
Personal Satisfaction. That individual’s actions are profoundly affected by his or her
personality. Strong need for achievement is another characteristic identified to describe
entrepreneurs (McClelland 1961, McClelland & Winter 1971). In a study of behaviour in
young men, McClelland (1961) concluded that a high need for achievement would
influence the self selection of an entrepreneurial position, defined as a salesman,
management consultant or a business owner. Several subsequent studies have shown a
positive relationship between achievement motivation and entrepreneurship (Begley &
Boyd 1986, Davidson 1989, Lachman 1980). However, other studies have shown that need
for achievement is not the most important variable for predicting the likelihood of starting a
business (Hull et al. 1980). Nevertheless, motivation remains an important characteristic in
the psychological theories of entrepreneurship. Most of these studies conclude that
entrepreneurs have a high need for achievement.
39
This is a major reason for their success; they refuse to be beaten and persevere when ‘the
going gets tough’. On the other hand, this also explains why some entrepreneurs fail. They
have too much faith in their own ability; they believe they are infallible and can do almost
anything; they refuse to accept they might be wrong; they fail to seek help that might be
available. Successful entrepreneurs are also able to deal with unexpected obstacles
(Zimmerer & Scarborough 2005).
Networking. It is the energy and abilities of the entrepreneur that bring entrepreneurial
activity into being. Entrepreneurs are good networkers (Zimmerer & Scarborough 2005).
Constrained by resource limitations, especially finance, entrepreneurs use creativity, social
networking and bargaining to obtain favours, deals and action. There is a paradigm that
ideas can be found anywhere, anytime and people need to be alert for opportunities. In this
study, the author will investigate further Chinese ‘guanxi’ connections and other traditional
Confucian values, from which successful entrepreneurs learn where they can obtain sound
and often free advice.
Importantly, entrepreneurs are the central figures in the entrepreneurial process.
Researchers have described this entrepreneurial process as involving all the functions,
activities, and actions associated with entrepreneurs perceiving opportunities, and the
creation of organizations to pursue these opportunities (Bygrave 1989)
Adaptive Opportunists. They are decision makers and generators of action. They make
choices and decisions in a variety or a multiplicity of social contexts and situations. True
visionaries have to sell their new ideas and create demand. They transform a simple, ill-
defined idea into something that works. Entrepreneurs add value (Birley & Muzyka 2000)
on their beliefs. Entrepreneurs acquire and utilize resources to create products and services,
which satisfy customers and markets. Value is then added through a transformation process.
They have their own ways of dealing with opportunities, setbacks and uncertainties to
‘creatively create’ new products, new services, new organizations and new ways of
satisfying customers or doing business (Birley & Muzyka 2000).
40
Entrepreneurs are able to create unique strategies and they understand market needs and
satisfy them (Jennings 1994, Swedberg 2000). There is often a strong element of demand-
pull. However, there are definite cases of a good idea being lost or wasted through poor
marketing. This is where the entrepreneur sometimes needs a partner to provide a
commercial brain. Effective control of the value-adding process requires sound
performance measurement to achieve profit maximization. The entrepreneur needs to
understand which factors are critical for success and ensure that performance in respect of
these is measured and any failings are remedied.
Business Management. The economic and non-economic aspects of their activities
become part of the process of development. Adam Smith (1776) perceived the ‘capitalist’
as an owner-manager who combined basic resources – land, labour, and capital – into a
successful industrial enterprise. Smith described how capitalists were essential ingredients
to the growth and distribution of wealth in society. The next one hundred years saw
economic theorists expand and modify Smith’s original theories. Around 1810, in the midst
of the industrial revolution, general ‘managerial capabilities’ were required for success as
an entrepreneur (Say 1828). At this time there was no middle management in organizations
and the entrepreneur had to fulfil these roles alone (Long 1983). The idea that the
entrepreneur must also be a manager was followed up by Knight (1921) and Leibenstein
(1968).
Mill (1848) strongly believed that the singular factor in differentiating a ‘manager’ from an
‘entrepreneur’ was the ‘bearing of risk’. Schumpeter (1943) believed that ‘innovation’
rather than ‘risk’ formed the central causal characteristics. An extensive review of literature
revealed that from the time of Adam Smith in 1776 through to the middle of the twentieth
century, entrepreneurship literature was dominated by economists focusing upon the
outcomes of the entrepreneurship phenomenon.
Dynamic process. Many researchers also explain the entrepreneurial process as a dynamic
and holistic process initiated by an act of human volition that occurs at the level of the
individual firm. It also involves a change of state, antecedent variables and a discontinuity,
41
and its outcomes are extremely sensitive to the initial conditions of these variables (Gartner
1989, Ronstadt 1984, Schumpeter 1934, Virtanen 1997, Wennekers & Thurik 1999). To
these researchers, entrepreneurial process, which is an integral component of
entrepreneurship, is not a static system, or a fixed state of existence, but a dynamic process
of becoming rather than a state of being. It involves the combination of time dimension and
innovating behaviour in the market to create value. Such combination induces unforeseen
hurdles and difficulties, and they vary from one place to another.
Regardless of the diversity in its definition, most authors agree that entrepreneurship is
fundamentally a human creative act. It commences by finding the personal energy and
financial means to initiate and build a commercial enterprise. It is invariably an innovative
process which requires an identification and seizing of an opportunity. It entails an
organization of existing resources to convert those opportunities into workable/marketable
products or service, thus adding value through time, efforts, money, or skills for the benefit
of society. The entrepreneur assumes the risks of the competitive marketplace to implement
these ideas, and realizes the rewards from these efforts.
It can be deduced from the above review of literature on the conceptualization of
entrepreneurship that it is a dynamic process of the creation of incremental wealth. The
wealth is created by individuals who assume the major risks in terms of equity, time and/or
career commitment and through innovation provide value for some product or service. The
product or service may or may not be new or unique but value must somehow be infused by
the entrepreneur by receiving and allocating the necessary skills and resources.
In the sections below we look at the theories that support the study. Social learning theory
(SLT) in section 2.4 provides the theoretical underpinning for the social and networking
orientation of the Chinese entrepreneurs and in section 2.5 the different theories relating to
immigrant entrepreneurs are addressed.
42
2.4 Social Learning Theory The distinctive feature of social learning theory (SLT) is the central role it assigns to self-
regulatory process. People are not simply reactors to external influences. They select,
organize and transform the stimuli that impinge upon them. Through self-generated
inducements and consequences they can exercise some influence over their own behaviour.
SLT approaches the explanation of human behaviour in terms of a continuous reciprocal
interaction between cognitive, behavioural and environmental determinants Bandura
(1977). This theory provides the explanation for the Chinese entrepreneurs in effecting
personal and social change.
Cognitive theories promote the view that learning originates through mental processing of
information resulting in behaviour to be executed; behavioural theories on the other hand
advocate that learning is the outcome of behaviour, its consequences, and the relationships
between the two as determined by individuals. Although the two approaches have opposing
ideas, the SLT combines the two. Bandura (1977) asserts that individuals are capable of
learning from their behaviour as well as modifying their behaviour based on learning
experiences and observations of other people’s behaviour and associated consequences.
The SLT theory seems capable of accommodating and absorbing the varying explanations
to acculturation patterns of the first and second generation entrepreneurs.
It explains how the entrepreneurs learn by modelling, how frequently and when imitative
behaviour will be performed. Chinese entrepreneurs learn from role models what to do, at
least in approximate form, before operating their own business. While most influential role
models are family members, the prevalence and visibility of successful examples can be
helpful to entrepreneurs. Similarly, role models are normally trusted counsellors who share
their business knowledge, skills and experience and, most importantly, serve as respected
role models for would-be entrepreneurs and budding entrepreneurs. In the Chinese
entrepreneurship context, role models are best described as experienced business owners
willing to give back to their communities by assisting other Chinese ready to start or grow
their businesses. These are usually found through the guanxi networking (Light et al. 1990,
King 1991).
43
Raijman and Tienda (2000) pointed out that ethnic resources such as the knowledge and
skills to run businesses, ability in transferring experiences and managerial skills can
facilitate the necessary start-up lessons. By learning these skills, the Chinese entrepreneurs
can spare needless errors and avoid unnecessary waste of resources. They can profit from
the successes and mistakes of others as well as from their own experiences. In everyday
situations numerous opportunities exist to observe the actions of others and the occasions
on which they are rewarded. These types of people are dependent and they are especially
prone to adopt the behaviour of successful models. It helps entrepreneurs appreciate the
value of new information. It influences individuals’ willingness and ability to make new
connections among pre-existing ideas, as well as with new ideas, hence allowing them to
recognise opportunities.
2.5 Theories of Immigrant Entrepreneurship Evans (1989) claims that the ownership of small businesses is seen as a key strategy in
immigrants’ adaptation to industrialised societies. Similarly, Lofstrom (2002) and Yoon
(1991) assert that immigrant entrepreneurs have achieved upward social and economic
mobility through running and managing small businesses. According to Amit and Muller
(1995), based on their motivation to engage in entrepreneurial activity, there are two types
of entrepreneurs, namely, ‘push and pull’ entrepreneurs. The former includes those who are
pushed to start a business as they are dissatisfied with their current position in the labour
market in terms of unemployment or underemployment. The latter are those who are
attracted by their new venture idea and initiate venture activity.
Amit and Muller (1995) also concluded that ‘pull’ entrepreneurs are more successful than
the ‘Push’ ones. Chavan and Agrawal (2002) found from their study, examining the
changing role of ethnic small business in Australia by studying three generations over a
period of time, that the first generation of ethnic entrepreneurs are associated with ‘Push’
motivations and the second and third generations of entrepreneurs are associated with ‘Pull’
motivations. As scholars (Basu 2004, Chavan & Agrawal 2002) have found, immigrants are
motivated to engage in entrepreneurial activity either derived from ‘push’ or ‘pull’ factors,
44
or from both, as immigrant entrepreneurs can also be classified as either. There are a
number of theories that appear to be relevant for immigrant entrepreneurship and the
following paragraphs will examine them.
2.5.1 Disadvantage and Stepladder Theories The first theory explains that disadvantages such as language barriers, cultural
unfamiliarity, un-recognized qualifications, inadequate skills and discrimination force
immigrants to settle for lower-skilled or under-employment types of jobs (Henderson 2003,
Mesch & Czamanski 1997, Tseng 1995). As Kupferberg (2003) describes it, immigrants
are assumed to be less integrated into the labour market because they are being
discriminated against and structurally excluded. Due to these disadvantages, many
immigrants are excluded from mainstream occupations in the primary labour market
(Fernandez and Kim 1998, Greene & Chaganti 2004). This implies that there is a
possibility that immigrants tend to be directed to the secondary labour market, where most
of the available jobs have low wages and poor working conditions. As Light (1984) claims,
immigrants may derive a special incentive from this unfortunate situation to consider self-
employment. In addition, this drive may increase as the disadvantage increases. Thus,
disadvantages in the labour market can be a factor that pushes immigrants from
underemployment to engage in entrepreneurial activity (Clark & Drinkwater 2000, Pio
2005).
On the other hand, the stepladder theory argues that low status employment can be an
avenue for immigrants to access business ownership (Raijman & Tienda 2000). According
to Raijman and Tienda (2000), immigrants’ participation in undesirable employment in
organizations owned and managed by other co-ethnics (owners of the organizations from
same ethnic groups), is a way to acquire the knowledge and experience required to establish
a business. Rather than immigrant workers being exploited by co-ethnics, they believe that
time spent in low-wage employment can be seen as a form of on-the-job training. In
addition, such employment enables immigrant workers to build their social relationships
within the ethnic economy. Thus, their networks can then be widened and the chances to
move through a variety of jobs will increase. With such training opportunities in place, they
45
are able to obtain industry-specific business skills and accumulate experience in the
adopted country. As a result, the immigrant sector develops and the immigrant can work in
ethnic firms through a self-feeding process. After acquiring the necessary skills and
becoming acclimatised to the local labour market, immigrants will then establish their own
businesses (Bailey & Waldinger 1991, Henderson 2003, Waldinger 1993).
In this sense, disadvantages can provide a pathway for immigrants to become
entrepreneurs. Furthermore, from a psychological point of view, the disadvantages
experienced in the mainstream labour market could encourage immigrants to become
business owners. As described by Kupferberg (2003), immigrants may have the feeling that
they are seen as second-class citizens in the newly settled country due to the lack of legal,
political or cultural rights, social citizenship rights and the right to access the labour market
on an equal basis. Thus, immigrants are put in a situation where structurally imposed
tension may lead to diminished self-esteem. This lower self-esteem might cause them to
perceive that they are disliked or looked down upon by the host society. This feeling may
inspire a counter-movement to repair their damaged self-esteem. Therefore, self-
employment can be an alternative for immigrants to raise their sense of self-worth
(Kupferberg 2003), and as a means of resisting discrimination and responding to blocked
mobility (Fairlie & Meyer 1996, Waldinger et al. 1990).
Meanwhile, some researchers have reported that the lack of recognition for foreign
experiences which leads to unemployment or underemployment can also be a driving force
for immigrants to play entrepreneurial roles (Henderson, 2003, Henderson et al. 2001, Ho
2003, Mesch & Czamanski 1997, Trlin et al. 2004). Henderson et al. (2001) found from
their study that generally immigrants’ professional skills were being under-utilised or even
not used at all in the host country. Hence, the lack of recognition of their experiences
results in unemployment or underemployment (Boyer 1996, Friesen & Ip 1997). These
phenomena are associated with real or perceived loss of self-esteem, social status and
power (Ho 2003); Kupferberg (2003) believed that self-employment is one of the important
coping strategies and a desirable alternative.
46
Correspondingly, Hammarstedt (2001) declares that self-employment can be a good way to
avoid unemployment and underemployment. These self-employed people who are
motivated to engage in entrepreneurial activity are seen as ‘push’ entrepreneurs. Indeed,
immigrant entrepreneurship can pave the way to upward social mobility (Kloosterman,
2003). Nevertheless, business researchers have documented that the businesses many
immigrants engage in are small businesses which are characterised by low entry cost, high
levels of competition, limited profit margins, high rate of failure, and labour intensity
(Fernandez & Kim, 1998, Phizacklea & Ram 1995, Waldinger 1989, Waldinger et al.
1990). The reasons for this situation can be best explained using opportunity structure
theory.
2.5.2 Opportunity and Risk-taking Theories According to Waldinger et al. (1990), immigrant entrepreneurs face various challenges in
adapting to the host culture and establishing their own businesses. The main problems that
ethnic business owners commonly face include: protecting themselves from political
attacks; dealing with surviving competition; managing relations with customers and
suppliers; obtaining financial and human resources; acquiring needed information and
appropriate training and skills. These social and economic handicaps coupled with the
disadvantages discussed earlier drive many immigrant entrepreneurs into small businesses.
The opportunity structure theory argues that ethnic entrepreneurs can only move into those
niches that are underserved or abandoned by native entrepreneurs. These opportunities are
mainly found in the industries where the risks of failure are high. They are characterised by
low status, low rewards, heavy labour, high running costs, and limited profit margins
(Kupferberg 2003, Waldinger 1989). Due to the evolution of the global economic system,
the structure of opportunities is continually changing in modern business society. In
addition, political factors might frequently hinder the working of business markets.
Immigrant business owners have therefore found themselves facing various market
conditions (Aldrich & Waldinger 1990). Waldinger et al. (1990) point out that demand for
services provided is essential for a business to prosper. The primary market for immigrant
47
entrepreneurs can be the members of their own ethnic community in which there are no
language barriers.
Within the same community, people intimately know each other’s needs and preferences. In
this sense, ethnic entrepreneurs can develop niche customer bases. Kloosterman (2003) sees
this as the pull factor on the demand side that creates the opportunities for immigrants to set
up a shop within their own ethnic community. Immigrant businesses then do this to meet
newcomers’ needs and facilitate them in solving their special problems caused by the
strains of settlement and adaptation. Some businesses provide cultural products, such as
newspapers, books, magazines, food and clothes. Others offer special services, for instance,
law firms and accountants (Waldinger et al. 1990). Ethnic entrepreneurs thus enjoy an
advantage over potential competitors outside the community since they can tap into the
buying preferences of consumers in these groups (Hammarstedt 2001). Massey (2005)
claims that enterprise is a risky business as only a proportion of the businesses will survive.
Entrepreneurs have to take a number of risks such as financial, emotional and social. This is
because they put themselves on the line and thus, their social identities can suffer as well.
Barbosa et al. (2007) claimed that risk has always been at the centre of the definition of
entrepreneur. Risk perception has been conceived as a determinant of risk behaviour and
entrepreneurial decision making. One interprets the environment based on one’s
perceptions which include analysis, judgment, and intuition. In this sense, whether a
situation is deemed of moderate or high risk depends on the perceivers. Different people
can draw different conclusions. As Stearns and Hills (1996) note, successful entrepreneurs
are good risk managers but not wild-eyed risk takers. They are able to calculate risks and
whether the potential rewards are appropriate. Das and Teng (1997) also suggest that a
successful entrepreneur is a professional risk-taker because one of the most distinctive
features of entrepreneurial behaviour is risk taking. Indeed, risk-taking behaviour has been
associated with entrepreneurship and entrepreneurs have been described as self-employed
individuals who adjust themselves to risk (Gilmore et al. 2004).
48
Entrepreneurs introduce new products or processes and they adjust themselves to risk
where the return is uncertain (Palich & Bagby 1995). Starting a small business is seen to be
a particularly risky undertaking (Gilmore et al. 2004). The risk that entrepreneurs face can
be both financial and psychological since new actions and activities may put their self-
images at risk. Failure may lead to the loss of their capital and of their self-image.
Therefore, Das and Teng (1997) asserted that the entrepreneurs are inherently risk takers.
They often underrate their chances of failure and they need to be aware of the risks
involved and make appropriate financial decisions (Pinfold 2005).
Similarly, immigrants are also risk takers by nature because the process of leaving one’s
home to take up life in a new country means accepting great changes (Waldinger et al.
1990). As Delores (1997) pointed out, immigrants face a number of emotional and
cognitive adjustments to the reality of life in the host society. They experience the stresses
of adapting to a new country and being upset by the loss of their own culture. Therefore,
Waldinger et al. (1990) claim that people who enter the immigration stream tend to be able,
better prepared and more inclined toward risk.
There is no doubt that immigrant entrepreneurs must be prepared to take risks. According
to Kupferberg (2003), the risk-taking theory emphasizes that immigrants are prepared to
take on a low status business when they perceive that there is a future in that business.
These immigrant entrepreneurs will have strong motives to prove themselves and thus they
tend to enter the business differently from a member of the native community. Aldrich and
Waldinger (1990) claim that in almost all markets, small businesses continue to attract
immigrants and many newcomers have set up small business enterprises.
There are two possible explanations for this situation. One can be the low status and low
rewards in running such businesses. The other may be that small businesses have a high
rate of failure. These two factors may reduce the pool of native-born entrepreneurs.
Immigrant entrepreneurs therefore can step in as vacancies arise (Waldinger 1989). Since
the structure and allocation of opportunities open to potential ethnic owners have high rates
of failure and low status, immigrant entrepreneurs must have the ability to take risks in
49
order to survive. In addition, they are able to quickly respond to the results that the business
produces. Immigrant entrepreneurs will abandon those businesses that have limited
prospects and stick to those businesses that bring good profits, regardless of whether the
businesses might be risky. Based on this theory, immigrant entrepreneurs are seen to have
great sensitivity to the market and this market-adapted behaviour enables them to seize any
opportunities and attempt all types of businesses.
However, immigrant entrepreneurs usually face many difficulties and barriers to enter into
larger businesses, most of which are higher status ones. According to Porter (1979), one of
the major sources of barriers to entry is capital requirements. Larger businesses require a
large amount of capital not only for start-up, but also for day-to-day operations. As
Waldinger et al. (1990) note, larger businesses must shoulder heavy overhead and
administrative costs. In addition to the financial requirement, human capital is also
necessary for larger businesses. They must recruit well-qualified and experienced
employees who have stable work histories. For this reason, large businesses are prepared to
hunt these people in the primary labour market, to pay high salaries and to offer a wide
range of fringe benefits to them (Stanworth & Curran, 1989). Furthermore, unlike ethnic
small businesses, the market their larger counterparts target is the host society. This
requires immigrant entrepreneurs to have sufficient command of the local language
(Morokvasic 2003). So financial and human capital, coupled with a sufficient
understanding of the host country’s language typically prevent immigrant entrepreneurs
from entry into larger businesses. As a consequence, immigrants are forced to run small or
ethnic businesses.
2.5.3 Middleman Theories Some immigrants act as middlemen working between the elite and the masses, distributing
the products and services between these two (Boyd & Xu 2003, Yoon 1991). Middleman
minority is an important immigrant adaptation strategy (Cobas 1987), as it suggests that
immigrant minority groups occupy an intermediate position in the ethnic stratification
system of their host society (Boyd & Xu 2003, Chah 2002). Trading with ethnic goods and
50
services in this system creates business opportunities for immigrant entrepreneurs
(Kloosterman 2003).
Such activity also provides labour market opportunities for newcomers (Bauder 2003).
According to Bonacich (1973) and O’Brien and Fugita (1982), the middleman minority has
three characteristics. Firstly, this group has a sojourner orientation to the host country.
Secondly, they promote ethnic solidarity as a response to host hostility, which means that
they will use ethnic collective actions to resist being disadvantaged or discriminated against
by the host society. Finally, they are concentrated in the businesses that can be easily
converted to cash (Fernandez & Kim 1998).
Similarly, Zhou (2004) also sees the middleman minority entrepreneurs as sojourners.
Sojourners are those immigrants who move into the new countries not for permanent
settlement but only for financial purposes. Their interest is to amass as much profit as
possible in the shortest period and then sell off the business and reinvest their money
elsewhere or send it to their home countries.
Several researchers (Boyd & Xu 2003, Chah 2002) found that middleman businesses are
seen as those small ones which are highly accessible. Cherry (1990) argues that middleman
minority groups invest in small businesses because they do not have enough capital to set
up large businesses. He believes that limited available capital is the explanation for Chinese
immigrants investing in laundry and grocery businesses. Consequently, the availability of
resources appears to be the key factor influencing immigrants to choose the way in which
they form their businesses. As Fernandez and Kim (1998) pointed out, aspiration and
business opportunity alone cannot explain immigrants’ access to business ownership.
Another important element is their ability to mobilise the resources required for
establishing and running a business.
51
2.6 Chinese Business Culture ‘Culture’ is defined as personal refinement, establishing a person’s ideals, values, formation
and uses of categories, assumptions about life and goal-directed activities (Burns 1998).
Kershen (1998) describes ‘culture; as human experience of language, ideas, beliefs,
customs, codes, rituals, ceremonies, religion and laws with the option of being learnt and
transferable geographically. The Chinese culture regards harmonious relations among
family members as the foundations for a prosperous business. Extending harmonious
relations to external business networks, Chinese family enterprises use subcontracting to
maintain production flexibility and to reduce inter-firm coordination costs (Batonda &
Perry 2003).
A study into the traditions and business cultures of Chinese pathways to entrepreneurship
will enhance a better insight and understanding of this thesis, especially the difficulties
encountered by the first generation Chinese entrepreneurs in Australia. The traditional
Chinese culture believes that a successful business depends on three external factors: luck,
compatible environments, and harmonious social relations (Fung 1948, Clammer 2002).
However, it will be incorrect to view the modern Chinese family business as a purely
passive and reflexive system. On the contrary, new generation Chinese entrepreneurs
nowadays actively pursue strategies that attempt to ‘match’ with these three factors (Chen
2001).
• Adaptive Opportunism – Luck can influence the fate of the enterprise. Chinese
entrepreneurs also believe that missing an opportunity is even worse than
extravagantly spending all the family’s fortune. In other words, the success of an
enterprise does not depend on sheer luck but on alertness to the opportunity.
Chinese family business have always competed and prospered by being capable of
identifying profit opportunities, and exploiting them to their advantage (Kim 1994).
However, the final decision of this factor still falls on the head of the family; a
feature which enhances the power of the father-figure is the common ownership of
family belongings. Possessions are normally seen as belonging to the group,
although individuals may have stewardship of certain parts of the resources. When
52
poor families have little physical capital to be deployed, they still manage to
cultivate human capital for collective advancement (Lee 1996, Pistrui et al. 2001).
This is not only confined to rich families, but permeated through the whole society.
• Business Management – Favourable external conditions may enable a project to be
completed at half of the original effort. But when the external conditions are
unfavourable, Chinese entrepreneurs strive to ‘overcome’ them by searching for
new alternatives. They retreat to their family members and utilized family networks
(Backman 1995, Chen 2001). They restrict their productions to small scale; take
short-cuts to produce some non-capital-intensive and unsophisticated commodities,
with short gestation periods. A Chinese family firm is governed by paternalism.
They exhibit a strong sense of responsibility toward employees that is not only
moral, but also economic. Owners of the family firms consider themselves as
patriarchal business leaders who confer welfare benefits on their employees as
favours, take a personal interest in their subordinates’ non-job related activities, and
disapproves of trade union activities. This practice partly explains the low dispute
rates in industrial relations in East Asian economies and, more importantly, enables
a network of subcontracting to work efficiently. Moreover, members in the Chinese
family business express, in their behaviour and attitudes, a strong sense of vertical
order (Lee 1996, Pistrui et al. 2001).
• Networking – The Chinese culture regards harmonious relations among family
members as the foundations for a prosperous business. Extending harmonious
relations to external business networks, Chinese family enterprises use
subcontracting to maintain production flexibility and to reduce inter-firm
coordination costs (Friesen & Ip 1997, Park & Luo 2001). A Chinese family firm
engages extensively in business networks and nepotism. The creation of wealth in
one family unit can be managed in isolation; it must buy and sell, exchange
information, borrow money, and seek advice. Therefore, it is essential to make
linkages if one’s own purposes are to be served. The operation of Chinese business
networks is, in fact, an extension of family culture. To ensure that such networks
53
operate reliably, Chinese firms pay special attention to trust in business transactions
(Carney 1998, Lee 1996).
Given the resource base, Chinese entrepreneurs in the world market have largely forsaken
the strategy of upgrading their technologies where they lack competitive advantages.
Instead, they have pursued strategies in the form of imitation, and specialize in regional co-
ordination (Child & Tse 2001). In fact, a lot of Chinese from overseas are still lacking the
research and development tactics to raise them and the businesses to next level up (Ralston
et al. 1996, Thune 2001). This phenomenon can be found in all Chinatowns including Box
Hill and other suburbs that are of interest in this study.
2.7 Chinese Entrepreneurial Process and Characteristics Liang (1987) stipulated the following ten characteristics as condensation of ‘typical
Chinese business style’:
• Selfish – Being protective of their families’ reputations and assets, Chinese do not
work cooperatively with others, whether they are the public or government bodies.
Corruption and biased judgements severely handicap the normal functioning of
legislation.
• Hardworking – Being self-exploitative to the limit, Chinese are on average very
hardworking people, and seldom take leisure time off as it will affect the
profitability.
• Superficial – Chinese tend to show off their riches, doing all it takes to promote
their own image and to save face in front of the other people.
• Timid – Chinese are not risk-taking people; most of them are taught to lay low and
to choose the moderate pathway in all types of decisions. Thus, they can easily shift
and change a decision made at an earlier stage.
• Control by one’s destiny – Chinese believe heavily in fate, and they are satisfied
with what they are given, without being concerned about what they can have.
54
• Conservative – ‘A bird in the hand is worth two in the bush’, Chinese are not
willing to change ‘settled’ conditions for some unknown future; they are less
aggressive in pursuing the future by changing the present conditions.
• Average quality – Chinese do not usually pursue ‘precision’ or ‘premium quality’.
Guidelines are set to be broken, the law is to be respected but not followed.
• Over-jealous – similar to point 1. Chinese do not work cooperatively with others;
cohesion between different families does not exist. They are always jealous of other
people’s achievements, but they will not want to understand or analyse the reasons
behind the success of other people.
• Flexible – Chinese are willing and able to bend rules to accommodate one’s desire
to achieve. They can work very hard, even with non-ethical standards, to achieve
their goals.
• Moderate – Chinese are taught from a very early age to stay away from taking
drastic decisions, which can be irreversible. Risk taking is a virtue that should not
be encouraged. Old pathways are always better in providing a stable environment.
New territory should not be explored.
These ‘traditional styles’ were advocated by Liang (1987), who established his own
thoughts during the 40’s and 50’s years. These values, however, are still embraced by the
older generations of Chinese who have some sort of influences over the teachings of the
younger generations (Jacobs et al. 1995, Yan 2006). Although these influences have been
diminishing in recent 20 years because of advances in telecommunication and computer
technologies, this Confucian influence still maintain its grip the ways that businesses are
established and run in this business world.
The first generation entrepreneurs bring into Australia a different business style from that
prevailing in Australia. This experience may be of considerable disadvantage to the
immigrant small business persons who attempt to gain access to small business support
services in Australia (Chan 2001, Ip et al. 1998). It may also create perceptions of
assistance-providers, especially Governments and Government agencies which cause the
immigrant small business to actively avoid anything to do with them (Strahan and
Luscombe 1991). Favourable external conditions enable a project to be completed at half of
55
the original effort. But when the external conditions are unfavourable, Chinese
entrepreneurs strive to ‘overcome’ them by searching for new alternatives. They retreat to
their family members and utilized family networks. They restrict their productions to small
scales; take short-cuts to produce some non-capital-intensive and unsophisticated
commodities, with short gestation periods (Hsing 1996, Tseng 1995)
Any good business venture is the outcome of a cumulative chemistry of various elements,
where they impact one another. Thus, a detailed review of such elements is a must, which
will be shown in the following chapters. However, this venture, to a great extent, is very
different when comparing the Australian and Chinese business styles discussed in previous
paragraphs. The influences by such elements on the Chinese immigrants’ entrepreneurship
in Australia depend on the recipients, their past experiences, backgrounds, and especially
their views of running businesses (Boyer 1996, Chan 2001).
This study will cover both the past and the present state of Chinese business environments,
which will help in determining the differences between the two generations in discussion,
and will throw light on the plausible future course of the entrepreneurship in discussion.
In traditional Chinese culture, ethics within the community are more important than the law
and legal principles set by the State (a term for Chinese government in China). In other
words, disputes and confusions are also resolved by the conscience and common taking
within the community (Child & Tse 2001). To shift the decision making power from within
the family to external independent law enforcer and other professionals is a face-losing
exercise (Liang 1987).
Dependence on the State to help sorting out the disputes is minimal. In fact, the belief that
‘the truth is in one’s heart’ is so prevalent that most people ignore the guided rules and
regulations, and they will do things in their ways. Instead of creating new business, or
value-added items, Chinese tend to imitate other people’s success and duplicate the
formulae of other people (Gold 2000). This is the short cut to survive and to make enough
money within the shortest period of time. However, this will only increase unhealthy
56
competition Lack of individualism can only lead to cut-throat price competition, which can
only depreciate the effort put into by similar business types being set up. Consumers will
like to see larger but different ideas within the community instead of copied businesses
styles (Fouts & Chan 1995, Fung & Jie 1996).
Simply speaking, typical Chinese society is guided by ‘moral standard’ dependent on the
like and dislike of the person-in-charge, everything from politics in the highest level to
judgment of a criminal is based on ‘moral standard’ set by the head of various families of
various sizes (Lee 1996). Western society is guided by ‘political and judicial systems’
independent of the government in charge. Chinese may talk or buy their way whenever it
comes to confrontation with the law enforcement agency. This presents a conflict of
thinking when the immigrants start the new life in Australia, in the early days. This is a
typical example of cultural shock to both Chinese and Australians (Cheung & King 2004).
From the first generation immigrants’ point of view, a cultural shock still exists for them to
extend the past business experiences in Australia. The factors can still affect the value
placed on entrepreneurship and the motives for starting a business for this newer generation
of first generation entrepreneurs (Kim 1994, Morokvasic 2003). It is important to recognise
the role of ‘opportunity structures’ presented by the social and economic context, as a
contributory factor, as well as cultural influences (Hall & Xu 1990, Huisman 1985)). This
diversity that exists between ethnic groups still affects their orientation towards business
and their opportunities for mobilizing resources to start and run a business (Kaye 2002).
In the last 20 years, the first generation immigrants came from a different background.
These are more educated, and they come with more money. However experienced though
these first generation entrepreneurs are in their own professional fields, they may also
experience difficulties (Stromback & Malhotra 1994, Yuan 1988), such as:
• Inadequate cultural awareness skills of some mainstream bodies
• Conservative view that these immigrants were too difficult to assist
57
• Lack of familiarity of these immigrants with the Australia business environment,
taxation and legal requirement
• Administrative inflexibility in terms of inadequate recognition of overseas
qualifications and skills.
Hence, there should be a transitional change from the first to second generation
entrepreneurs in their establishing and running of the businesses (Garcia-Alvarez et al.
2002, Fletcher 2004), especially in the last 20 years. The factors for this argument will be
illustrated later in this thesis.
2.8 Importance of Chinese ‘Family First’ Ethics In the Chinese history, politics and laws have been fairly universal across the regions of
whole China. The one ideological constant in China has been Confucianism (Chen 1991).
Confucianism had epitomized the core values of China since the Han dynasty (206BC–220
AD). Its philosophy has been deeply embedded in the minds of the Chinese. Core values
change very slowly, and even Mao’s Great Cultural Revolution (1966–76) could not
destroy the centuries of adherence to Confucian values (Lachman 1983, Jacobs et al. 1995).
The fundamentals of establishing and running businesses have not been changed,
whichever pathways that these entrepreneurs choose.
‘Family first’ has always been the most important factor and determinant of the traditional
Chinese culture in every practice (Lee 1996, Pistrui et al. 2001). Much of this arises from
the emphasis: what importance does each member of the society give to the individual?
What does each member give to the family or to the community? Family has always been
the primary make-up building block of the whole community. Families of same surnames,
whether directly or indirectly related, always cluster around the same localities. Sayings
such as ‘The whole country – one big family’ or ‘Four seas – all brothers and sisters’ are
used to describe the bonding between the individuals (Liang 1987).
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Throughout Chinese history, the head of each individual family had always been the eldest
male, being married with several wives and concubines. All the descendents would be
expected to live within the ‘big house’ until they died. Everyone would be working for the
common good of the ‘surname’. The authority and privileges would be assigned to the
individuals according to the hierarchy within the family (Clammer 2002, Triandis 1986).
Males, however young they would be, always enjoyed the supreme authority and privilege
compared to the female counterparts. The males would be assigned different tasks within
the family, while taking the supreme orders from the head of the family. The decision-
making task rested upon the head of the family, everyone else would be expected to follow
and to carry out the orders as such. Lower hierarchy would be the servants and labourers
who were sold to the family by the parents when they were very young. They also took up
the surname of the family. These workers were to work for the family for the rest of their
lives (Clammer 2002, Earley 1997).
This embedded tradition of hierarchy forms the basis of both family and business relations.
Everyone from the family will be honoured to carry the same ‘surname’. The same
‘surname’ individuals will always bear the glory and fame, as much as shame and guilt of
the others who carry the same ‘surname’.
In Australia, the greater importance is given to the individual. For example, in the movies
individuals are portrayed as struggling against the odds (and often against society). The
music also has the same bent, as do the literature, artistic traditions and the political ideals.
Chinese are more society focussed, except among western-influenced intellectual elites,
discussions are seldom about the individual or personal rights. There are no words in
Mandarin and other Chinese languages about ‘privacy’, ‘individualism’, or ‘personal
things’, without the connotation of self-indulgence, selfishness and insensitivity to others.
Chinese life is about the collective (Choi & Choi 1994, Sinha & Tripathi 1994).
In the past many years in China, Hong Kong, Taiwan and other Asian countries, the
engines of the Chinese economy have been the family, the family business, and the village
enterprise (Boyer 1996, Lee 1996, Hsing 1996). In the traditional Chinese extended family,
59
the family is an economic entity. Everyone who has a job or a business gives what he or she
makes to the head of the family and receives money for necessities in return. The success of
the family is the success of everyone in it. All life decisions – whom to marry, where to
live, how to make a living – follow much the same pattern. This sense of family is closely
tied to a sense of place (Pistrui et al. 2001, Uhlenbert & Mueller 2003, and Yan & Sorenson
2006). In China, the Communist Party reinforces this identification with place through an
iron triangle’ of residence permits (hukou), secret personnel files (dangan), and work units
(danwei). Until very recently, one can not travel to, for example, Shanghai without a
Shanghai hukou, and an assignment to a Shanghai danwei, with the appropriate references
from one’s dangan.
In each family, the authority of the father is absolute, as the head of a hierarchy arranges by
generation, age and sex, in which every member of the extended family is related in rank to
every other. By the time the Chinese toddler has even mastered the vocabulary of this
complex pecking order, he is hooked on hierarchy. Aggression is suppressed, dependence
encouraged. What is owed to parents have no limits; therefore a sense of guilt for one’s
filial inadequacy is part of the Chinese personality (Clammer 2002, Taormina & Lao 2007).
The vigorous conduct of change by democratic means is unlikely to be advanced by the
prevalence of expectations which leads to fear of conflict, inability to act within a peer
group and submission to authority. Creativity is often suppressed. Family firms are
especially well suited to networked production and to industrial settings where their low
managerial overhead and their ability to efficiently organize low-cost labour in non-
complex technologies is a key competitive advantage (Child & Tse 2001, Lee 1996).
2.9 Comparison between Chinese and Western Entrepreneurship
Major changes taking place in the global economy create a clash of ideologies between the
traditional commercial culture of Chinese firms and the new economic environment
(Carney 1998). The importance of brand building, an increased reliance on research and
development, new organizational management skills become more obvious in the
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entrepreneurship styles of the newer generation. Ahlstrom et al. (2004) suggested that
certain characteristics of the Chinese firms that are assets in the slower growth industries
may prove to be liabilities for firms that sought rapid growth. Therefore, the success of the
new generation entrepreneurs depends not only on the personal attributes and the
foundation of the first generation; a change in the ‘running of the business’ has to be in
place for meeting challenges from within and outside Australia.
Suggested by Ahltrom et al. (2004), the changes required are decentralised organizational
structures, transparent corporate governance, and acceptance of outside capital that required
the ceding of ownership and control. These will be departure from traditional practices.
Also, it depends on the ‘openness to change’ of the old firms to grow and expand. In recent
years, there have been intense changes occurring in East Asia with significant bearing on
entrepreneurial development in the region (Ang et al. 2000).
Similar comparison study by Ralston et al. (1996) suggested that the new generation
managers in China are more individualistic and they are more likely to act independently,
while taking risks in the pursuit of profits. However, these new generation managers are,
likewise, not forsaking their Confucian values (Selvarajah 2008). Thus, they may be
viewed as crossverging their eastern and western influences, while on the road of
modernization. Although the samples by Ralston et al. (1996) were taken from the state-run
enterprises, rather than individual and independent business sectors, and the age of the
sample groups (40+) was also higher than the second-generation group in this thesis,
parallel comparison can still be drawn in predicting the change of business style and
management skills in the latter group. The findings from the empirical data may illustrate
that the second generation entrepreneurs are growingly more westernised.
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Table 2.1 Western and Eastern Business Styles
Western Business Styles Eastern Business Styles
Occident (modernity) Orient (tradition)
Rational (public) law Ad hoc (private) law
Double-entry bookkeeping Lack of rational accounting
Free and independent cities Political/administrative camps
Independent urban bourgeoisie State-controlled merchants
Rational-legal (and democratic) state Patrimonial (oriental despotic) state
Rational science Mysticism
Protestant ethic and the emergence of the
rational individual
Repressive religions and the predominance of
collectivity
Basic institutional constitution of the
West
Basic institutional constitution of the East
Fragmented civilization with a balance of
social power between all groups and
institutions (i.e. multi-state system or
multi-power actor civilization)
Unified civilization with no social balance of
power between groups and institutions (i.e.
single-state systems or empires of
domination)
Separation of public and private realms
(rational institutions)
Fusion of public and private realms (irrational
institutions)
Source: Weber 1978, pp.1192
The importance of this section is to propose a transitional change from the first generation
to the second based on the contrast between Individualism and Collectivism. Individualism
can be defined as an individual’s self-orientation that emphasizes self-sufficiency and
control with value being given to self-accomplishment; whereas collectivism can be
defined as the subordination of personal goals to the goal of the (work) group with an
emphasis on sharing and group harmony (Morris et al. 1994, Triandis 1986).
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It is not unexpected that Chinese cultures score high on collectivism, while individualism
epitomizes western cultural values. This scenario is similar to the notion that the second
generation immigrants will accept western culture more than the first generation. Ralston et
al. (1993) found that the values of Hong Kong Chinese managers, who long had been
exposed to western influences, were more western (individualistic) than their PRC
(People’s Republic of China) Chinese counterparts, suggesting that the long exposure to
eastern values had influenced the values of the Hong Kong Chinese managers. The
influence of culture on relationship development processes in Overseas Chinese is also
supported by Batonda & Perry (2003).
The emergent profile of this second generation entrepreneurs, including managers and
professionals who will be leading Chinese into the 21st century is one of a generation whose
values are clearly more individualistic, less collectivistic and less committed to Confucian
philosophy than their previous generation counterparts. Ralston et al. (1993) describe this
phenomenon as ‘crossvergence’, where crossvergence does not mean the Chinese adopt
western values, but that they internalize some aspects of western individualism into their
Confucian-based value system. Thus, they develop a unique perspective or set of values
that combined facets from both cultures.
Welsh (1999) suggested the concept of ‘transculturality’ aims for a multi-meshed and
inclusive understanding of culture. People can make their own choices with respect to their
affiliations while their actual homeland can be far away from their original homeland.
Thus, the identity of Chinese second generation in the multicultural society is
‘transcultural’ (Welsh 1999) comprehending both traditional Chinese culture from their
local affiliations, such as families, and Australian culture in the society.
The process of inter-cultural exchange takes place within ethnic groups, and leads to
cultural renewal within the value systems of each ethnic group (Secombe & Zajda 1999)
Chinese younger generation may inherit the traditional Chinese culture from their parents,
and they are meanwhile confronted the contemporary culture of their society. Chinese
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people are of the ‘both-and’ thinking type and thus, they blend in with the western culture
and learn western ways of doing businesses. The first generation in a western society learns
quickly from the western culture. These parents use more verbal praise, talk to their
children, and give them more freedom and choice in their own decision-making (Rice &
Dolgin 2002), a situation that reflects their ‘both-and’ cultural characteristic. As Slee
(2007) pointed out, the younger generation may become confused about their identity when
their family struggles to maintain its ethnic identity in the face of Australian mainstream
culture. For those with parents born overseas, their identity development is in relation to
how well their parents have blended in the Australian mainstream culture.
2.10 Individualism vs Collectivism
There are cross-cultural differences in parenting style between the individualistic cultures,
such as Australian, and collectivist cultures such as Chinese (Slee 2007). Inspired by
Hofstede’s landmark (1980) international survey of western work-related values, Triandis
and his associates had since applied the approach to most of their cross-cultural research on
individualism and collectivism at the cultural level (Hui & Triandis 1985, Triandis 1986).
Hofstede (1980) defined individualism as the emotional independence from groups,
organization, and other collectivist societies where people are born into extended families
or kinship systems which protect them in exchange for loyalty. As for collectivism, Hui and
Triandis (1986) defined it as a syndrome of feelings, emotions, beliefs, ideology, and
actions related to interpersonal concern. These are reflected in the following seven
categories:
1. Consideration of implications (cost and benefits) of one’s own decision and/or
actions for other people
2. Sharing of material resources
3. Sharing of non-material resources (such as time and effort)
4. Susceptibility to social influence
5. Self-presentation and face-work
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6. Sharing of outcomes
7. Feeling of involvement in other’s lives.
Hofstede and Triandis’ studies on individualism and collectivism have been replicated in a
large number of cultures. There is little doubt that the individualism-collectivism construct
represents a cross-culturally valid characterisation of a number of cultures. However, there
is an increasing perception that the construct may be too neat to be true and may not be
universally applicable. Cheng (1997) pointed out that these two theories may have been
over generalised and that some values may not fit well with either individualism or
collectivism, there may also be some values that comfortably accommodate both (Choi &
Choi 1994, Sinha & Tripathi 1994).
Similar findings by Adler et al. (1986) suggested that east–west cultural differences were
becoming more significant and had proved to be troublesome variables for western-owned
multinational companies. In this study, the difference between the two generations in their
responses to the survey is the more important element to study. This will indicate a
transitional change from collectivism to individualism among different dimensions of
entrepreneurship displayed in their journeys. There may be groups which display values
that can fit and accommodate both theories.
Hofstede (1980) has shown that countries such as the United States, Australia, Great Britain
and Canada demonstrate high scores on his individualism-collectivism index, while
Venezuela, China, Pakistan, Thailand and Mexico score fairly low. Has this index changed
in recent years, in particular reference to the Chinese entrepreneurs? Simply speaking,
individualistic cultures may foster development of an individual’s self-concept and self-
confidence. There is also likely to be a greater sense of personal responsibility for
performance outcomes, while interpersonal competition may generate a steady stream of
ideas of innovative change. However, there is also likely to be an emphasis on personal
gain, self satisfaction, selfishness and expediency.
65
On the other hand, collectivism offers the advantage of more harmonious relationships
among individuals. In this type of culture, greater synergies may occur from the combined
efforts of people with diverse skills, while individuals may enjoy a network of social
support. However, there is likely to be a loss of one’s self to the group or organizational
persona, and a greater level of emotional dependence on the organization. Chinese
entrepreneurs from the first and second generation come from different educational
backgrounds, working experiences and networking styles. Their idealism and expectation
of their entrepreneurial experiences display the differences between the east and west
entrepreneurial behaviours (Chu 1995).
Table 2.2 Individualism and Collectivism
Collectivist Individualistic
People are born into extended families which continue to protect them in exchange for loyalty
Everyone grows up to look after him/herself and his/her immediate (nuclear) family only
Identity is based on the social network to which one belongs
Identity is based on the individual
Harmony should be maintained and direct confrontation avoided
Speaking one’s mind is a characteristic of an honest person
Relationship of employer–employee perceived in moral terms, like a family link
Relationship employer–employee is a contract that is supposed to be based on mutual advantage
Hiring and promotion decisions take employees’ in-groups into account
Hiring and promotion decisions are supposed to be based on skills and rules only
Relationship prevails over task Task prevails over relationship Collective interests prevail over individual interests
Individual interests prevail over collective interests
Opinions are predetermined by group membership
Everyone is expected to have a private opinion
Group harmony and consensus is the ultimate goal
Individual differences in Collectivist and actualization is the ultimate goal
Source: Extracted from two tables in Hofstede (1991, pp. 67, 73).
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2.11 Adoption of Western Styles in Chinese Business In summary, for businesses to grow, management skills have to be in place to facilitate the
transition and expansion. In the last 30 years, China and other major Asian countries have
been adopting new ways of doing business, due to the influences of technological changes
that bridge the countries within a split second (Ralston 1993, 1996). Reluctance to adopt
new management skills will only restrict the proper growth and expansion of one’s business
(Gilmore et al. 2004). Transition changes are needed to ensure the survival of the
businesses.
In this study, two options are forwarded for the survival of the family businesses:
1. Whether the market or product is existent. For example, in Box Hill and other Asian
community suburbs, the long history of these businesses have already help various
businesses to establish and grow to their optimal sizes, such as restaurants and
hairdressing shops. Larger size and concentration of the community will enhance
the chance of survival because of the higher attractiveness to the potential customers
and users (Friesen & Ip 1997, Henderson 2003).
2. Whether the market or product is so specialized that only certain people or firms
have the know-how. Indeed, having a differentiated, specialist product or service
often goes hand in hand with having a well-targeted market segment. This ‘niche
strategy’ offers the better chance of success (Carland et al. 1995). It involves filling
or creating gaps in the market that big firms find unsuitable for their large
investment capacity. It emphasizes the non-price elements of the marketing mix,
such as quality, and satisfying a small, clearly-defined target market or segment
which have these specialized needs.
Option 1 does not require a lot of knowledge or professional skill. On the other hand,
option 2 provides a potential to those entrepreneurs who want to be specialized in their own
fields or businesses. Further into the growth of the businesses, entrepreneurs have to
expand further in order to grow beyond the family-owned size, into larger firms (Begley &
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Boyd 1986). Thus, proper and westernized management skills are needed. They will need
to develop the team and delegate more and more. Delegating to those closer to the problem
necessitate tolerating mistakes, supporting and protecting staff as they grew into their jobs,
encouraging them to experiment and test the market, and finally, rewarding their successful
initiatives (Carland et al.1995). Inevitably, there will be some confusion and ambiguity of
tasks and a certain amount of internal competition, but organizational structures will need
to be formalized as the business grows (Burton et al. 1995). These styles may not be
recognized or put into practice by the first generation entrepreneurs because of their limited
background knowledge and resources to go beyond their own local businesses (Strahan &
Luscombe 1991).
The emphasis will probably shift to maintaining stability, fine-tuning and structuring the
business more tightly by coordinating activities, eliminating overlap and careful analysis.
Not unexpectedly, the first generation entrepreneurs may have never considered further
growth or penetration of the market, new development of their products or services (Boyer
1996, Ip et al. 1998). This is because these entrepreneurs usually start at a later stage (in
their 40s). By the time the businesses are founded and developed, these entrepreneurs may
not be willing to take further unnecessary risks which may in turn jeopardize their hard
earned living.
Conflicts may arise due to differences in opinions. Cultural preferences for certain
behaviours will take precedence over the western view of logical managerial behaviours,
such as hiring employees and expectation of intense loyalty to the family or in-group. Often
times, hiring decisions are based on nepotism rather than competence because family can
be trusted and should be helped (Hall & Xu 1990).
2.12 Summary An important issue arising from the review of the developmental definitions of the concept
of entrepreneurship is that many of the definitions, theories and works of literature on
entrepreneurship have emerged from Europe, America and other western cultures.
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Definitions are rather based on various researchers’ empirical studies, observations,
fieldwork and culture. This to a large extent shows that the concept and definition of
entrepreneurship is context or culture bound. That is, it depends on the context or the angle
from which one is analyzing it. The issue therefore is whether the insight into
entrepreneurship based on these western thinking can be successfully implied used in the
Chinese entrepreneurs. The importance of this issue cannot be overstated because of the
different cultural and business backgrounds.
Secondly, if culture is enmeshed with entrepreneurship, there must be differences and those
differences are likely to vary from country to country. This study therefore has a
considerable interest in finding out just how much entrepreneurs are influenced by the
Chinese and western culture. Two analogies have been given to show the differences
between the cultures. Another important gap identified in the literature is that existing
entrepreneurship definitions and theories have been developed assuming all generations of
Chinese entrepreneurs have the same entrepreneurial profiles. In fact, the study of the two
generation entrepreneurs in this thesis represents an ideology clash between east and west.
Thus, a further study into the difference between the two generations is necessary to check
if the results are different.
The review of literature in the next chapter examines the different phases of Australian
immigration. In addition, the formation of Chinatowns and the three theories of ethnic
enclave economies will be discussed to provide background information of Chinese
entrepreneurship in Melbourne.
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Chapter 3
Chinese Entrepreneurs and Ethnic Enclaves
3.1 Introduction This chapter will commence with a brief history of Chinese migration to and settlement in
Australia. In addition, the different phases of Australian immigration will be used to
illustrate the history of Chinese settlement in Melbourne. Prior to 1980, Box Hill was the
home of immigrants from Europe, especially from Germany, Italy and Greece. Since the
1980s, waves of Vietnamese, Cambodians, and in recent years, Hong Kong Chinese,
Taiwanese and mainland Chinese have moved to Box Hill creating the Chinatown we have
today.
The formation of ethnic enclaves and the three theories of ethnic enclave economies will be
discussed. Ethnic enclave refers to a concentration of people from the same ethnic group
within a specific geographical location. Ethnic enclaves provide incentives to become self-
employed and they give rise to a protected market in which particular ethnic groups are
able to trade with one another through their preferred language. The literature related to
explanatory variables of entrepreneurial behaviour, activity and success of the Chinese
entrepreneurs is examined. A general classification of these explanatory variables in
literature reveals that these variables stem from different theoretical and disciplinary
backgrounds. The theories will help to understand the pathways taken by the Chinese
entrepreneurs. Along with the nature and history of Chinese entrepreneurs, the chapter
concludes with a summary of the key studies reviewed and the importance of Chinese
diaspora in Australia.
Such a multi-disciplinary approach to the study of entrepreneurial behaviour is justifiable,
since entrepreneurship scholars argue strongly that the entrepreneurial phenomenon cannot
be adequately explained by one theory alone and, a multi-disciplinary approach is
70
recommended (Campbell 1992, Lerner et al. 1997, Rauch & Frese 2000, Ripsas 1998,
Schumpeter 1954).
3.2 Population of Australia with Chinese Ancestry
In the 2006 Census (ABS 2006a), there were 669,890 Australians with Chinese ancestry,
compared to 556,000 in the 2001 Census. This made up 3.1 percent of the total Australian
population. Their population was the largest among those of Asian descent. Of those with
Chinese ancestry, 9.1 percent were Australian-born and born to Australian-born parents
(both parents and either parent), making them a population of 60,917. These are the second
or third-plus generation Chinese. The first generation Chinese are those with both parents
born overseas, there were 594,962 of them 88.8 percent of the total (ABS 2006a). The
remaining 2.1 percent did not state the origin of their parents.
According to the 2006 Census, of those Chinese resident in Victoria, 90.6 percent were first
generation migrants, while only 7.2 percent of second and third plus generation migrants.
These figures are comparable to those of the national statistics. Compared to the same
categories of statistics in the 2001 Census (ABS 2001), the figures are very close (89.5
percent and 7.5 percent), While the population of third-plus generation seems to be
relatively small, this category is likely to increase substantially in the future with more
second generations reaching marital age and increasing numbers of Chinese migrants
permanently settling in Australia. At the same time, there have been more Chinese
migrating to Australia from China and neighbouring countries.
In 2006 Census, the total population of Australia (excluding the overseas visitors) was
21,511,606 (ABS 2006b). According to the 2006 Census, the overseas-born population was
4,416,037 persons, which was 20.5 percent of the total population. In comparison, the total
population in Victoria was 5,430,943. In the same Census (ABS 2006b), the overseas-born
population was 21.6 percent (1,173,201). In the 2006 Census, there were 69.4 percent of
Australians with Chinese ancestry who spoke a language other than English at home,
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making a population of 465,154. English was not the dominant spoken language at home in
the Chinese families.
In contrast to the large Canton-based origins of early Chinese migrants in the first half of
the century, there has been a growth in ethnic diversity as a result of the expansion of
numbers. Traditionally, people came from various districts of Canton such as Chungshan,
Toishan, Kaoyau and they are often separated from each other because of the different
dialects spoken (Choi 1975). Today, Chinese Australians are even more highly diverse in
their national and ethnic origins. Taiwanese, HK, Shanghaiese, for example, are among the
fastest growing segments of the Chinese Australian population.
There has also been a general shift away from the largely working class origins of the late
19th–early 20th century Chinese. While there is considerable social and economic diversity
within the Chinese Australian population today, it is also the case that many post-1965
Chinese immigrants came from professional, white collar and highly educated backgrounds
(ABS 2003b, Chan 1999)
Fitzgerald (1997) predicted that the Australian population of Asian descent will be between
7 percent and 10 percent by 2020. In fact, this may be an underestimate, as it does not allow
for the possibility of temporary residents such as students and business entrants who may
become permanent residents. A conservative projection made in 2001 is that Asians would
make up more than 10 percent of the Australian population in the next 10 years (ABS
2006b).
The modern Chinese diaspora is one of the largest and most geographically dispersed in the
world. The Chinese Government estimates that there are 30 million ethnic Chinese living
outside of China (Thune 2001), and they are to be found on every continent in the world. In
some countries, Chinese communities number in the millions and comprise a substantial
portion of the national population, for example, in Malaysia, Indonesia and other Southeast
Asian nations. In many western countries, such as the United States, Canada, the United
72
Kingdom and Australia, they are among the largest and longest established non-English
speaking migrant groups (Barrett et al. 2002, Frost 2002).
3.3 Different Phases of Immigration
Migration has long been a feature of Chinese life. As Wickberg (1994: 68) wrote, ‘The
Chinese are among the world’s great migration peoples. Indeed, the history of their country
can be seen as a process of migration, settlement, and control over the region that is now
China across the span of many centuries’. The modern history of China has been
characterised by incessant upheaval, associated with western and Japanese imperialism,
popular rebellions, dynasty collapses and transitions, warlord struggles, civil warfare, and
most recently, the turbulent history of the Tiananmen Square incident. Food shortages and
poverty have also been perennial features of life for the majority of the Chinese populace.
Migration, either internally within China, or abroad, has been a common means of adapting
to this political turmoil and economic hardship (Choi 1975, Collins 1995).
Chinese migration comprises a significant component of the Australian migration program,
with Chinese arriving from China, Hong Kong, Taiwan, Vietnam, Malaysia, Singapore,
Indonesia and other parts of the global Chinese diaspora (ABS 2006a, DIMA 1997).
3.3.1 First Wave – Gold Rush Era
Early Chinese history in Australia had always been linked to the Gold Rush era. Studies on
both local and migrant Chinese were scarce. During the gold rush years of the 1850s, there
were immigrants from overseas countries such as China, Germany, Poland, America,
Scandinavian countries and Hungary. These immigrants were divided according to race,
religion and national backgrounds. The Chinese were employed in menial labour, the
government and the mining community restricted their movements and economic activities
(Yong 1977). The first wave of Asian arrivals was made up of Chinese who came seeking
their fortune during the Gold Rush era of the 1850s. Prior to the discovery of gold in the
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1850s, it was estimated that there were fewer than 3,000 Chinese in Australia (Price 1966).
A decade later, there were over 38,000 Chinese in Australia.
According to Yong (1977), the Chinese were blocked from working in the gold fields and
jobs in the cities. Yong (1977) divided the Chinese ‘entrepreneurs’ into the labouring class
and the merchant class. The Chinese labouring class was engaged in market gardening,
cabinet making, hawking, laundry and cooking, whilst the merchant class concentrated on
import-export businesses, fruit and banana trades, grocery and green grocery. As one of the
largest and most visibly different of the non-British groups that came to Australia in this
period, their difficulties attracted a great deal of interest (Frost 2002). Generally, the
Chinese were characterized as sojourners rather than settlers. Beyond generalizations about
the labour-intensive nature of their agriculture, there was little detailed consideration of
their technology, methods, labour arrangements, and interactions with Europeans. There
was less discussion of how Chinese farming developed over time, and how their skills were
adapted to Australian environmental conditions.
The majority of early immigrants worked as labourers, this phenomenon were similar to the
early settlement of Chinese in Canada (Li 1988, Smart 2003). White Australia policy and
blocked mobility resulted in the economic segregation of Chinese up to 1970s. Business
ownership was restricted to the service sector in restaurant, laundry and retail. This pattern
is similar to that of early Canadian Chinese history (Li 1988). During the time, business
partnership was common strategy to pool limited resources and financial back-up for the
collection goal of achieving upward mobility. Such partnership was largely built on trust
and accountability through multi-stranded social relations (Backman 1995, Carney 1998).
Ethnic minority groups, such as the Chinese were prepared to work long hours in business
such as retail shops supported by family, were amongst the most prolific and successful.
The very experience of living in a difficult environment (and of planning, financing and
executing a move and then surviving in a new and often hostile environment) required
qualities of self-restraint, abstinence, hard work and voluntary postponement of
74
gratification. These were normally far more severe than those demanded by the lifestyle of
those who remained at home (Choi 1975, Yong 1977).
As a consequence, many Chinese who were denied work had switched from mining to
agricultural pursuits as general labourers or station hands. Others resorted to self-
employment as market gardeners or shop owners. Setting up the businesses might be the
last ditch alternative to unemployment or rejection by the majority Australians, which was a
case of ‘survival strategy’ or ‘economic lifeboat’ (Valdez 2002).
In Melbourne, Little Bourke Street was the meeting place for Chinese travellers who were
bound to China having spent time on the gold fields of Ballarat and newly arrived Chinese
to Australia from China. The Chinese were clustering in a single area that provided
security, exchange of information and a place to do businesses among the Chinese
immigrants. This type of clustering was very typical of ethnic minority groups wherever
they came from. However, different from today, the number of Chinese immigrants was not
high enough for the Chinatown to develop beyond its boundary in Little Bourke Street
(Selvarajah 2008).
The characteristics of traditional Chinese business are a direct consequence of the pull of
traditional Confucian values (Chou 1993). The male-dominated population, the commuting
system and the sustained contraction of the size of the community are expressive of a deep
commitment on the part of the immigrants to return to their family and homeland. The
purpose of the journey to Australia is to make money for a better life on their return home.
They come for the purpose of breaking free of traditional constraints and merging with their
new society, the ideas of white Australians are of little concern to them. Rarely do the
Chinese direct their actions against white racism or demand more political attention and
social assistance (Strahan & Luscombe 1991).
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3.3.2 Second Wave – European Settlement
British immigrants had always been the major source of immigrants since white settlement
in Australia (ABS 2006a). However, in the post-war years, Australia had to open its doors
to more migrants in order to provide sufficient labour force for the increasing
industrialisation. However, immigrants from Greece, Italy and other European countries
(mainly Eastern and Southern European countries) were allowed to match the demand of
Australia’s economic development (Collins 1991). The supplement from these countries
was a minor deviation of White Australia Policy. Over the years, although immigrants were
added into Australian population, the overall proportion of Chinese was still at a negligible
level.
This organized migration programme was mainly conducted through government-to-
government agreements between 1952 and 1972 (Ip et al. 1998). This was achieved through
difference assistance programme, such as; ‘ten-pound tourists’, chartering of transport,
provision of accommodation, public schooling and health care. For the period up until the
late 1980s, immigrants from non-English speaking backgrounds were concentrated in the
unskilled and semi-skilled manual jobs in the male and female labour markets, sometimes
called the secondary labour market. One consequence of this was that unemployment
during the post-war recessions had been much higher for immigrants from non-English
speaking backgrounds than for immigrants from English-speaking backgrounds or the
Australian-born (Collins 1991).
This type of programme was substituted by ‘selective programmes’, of which the
prospective immigrants were selected based on their skills, education and qualification.
This was introduced since 1970s as Australia experienced increasing unemployment and a
decline in its manufacturing workforce. The Europeans did not respond well to this new
policy where skilled and educated migrants were sought. The make-up of the immigrants’
population had been changed from UK and Ireland being the dominant source countries
(41.4 percent between 1971 and 1975) to Asian countries (such as Hong Kong –21.5
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percent in 1991, PRC – People’s Republic of China 11.3 percent in 1995) of combined 43.9
percent in 1989. (BIPR 1990, 1994, 1996 and 1997)
3.3.3 Third Wave – 1980 Migrants
First were the arrivals of Indo-Chinese refugees in the late 1970s and the 1980s. Later in
1980s, there were the boat people from Vietnam after the fall of Saigon during the time. By
June 1986, Australia had resettled nearly 90,000 Indo-Chinese refugees, of whom 80
percent were Vietnamese and the remainder from Laos and Cambodia (Collins 1991). At
the same time, there were some other different migrants who arrived from the mid-1980s.
Previous generations of migrants tended to have arrived under the family reunion program,
and were less educated and skilled, or were former students who had studied in Australian
universities. By the late 1980s, the majority of Hong Kong, Malaysia and Taiwanese
migrants were independent migrants admitted on the basis of their credentials, skills or
wealth (Pookong & Skelton 1994).
Thus in the late 1980s, Australia received its first substantial wave of migration from China
since the nineteenth-century Gold Rush. Before 1988, there were less than 38,000
mainland-born Chinese in Australia (Fung & Jie 1996). However, with the more open
climate on the mainland, the Australian educational services industry recruited thousands of
Chinese students to Australia, mainly to study English. After the Tiananmen Square
incident in 1989, the Hawke Labour Government granted special permanent visas to
approximately 20,000 Chinese (from PRC – People of Republic of China) students in
Australia, and about 22,000 more arrived in the 12 months after the incident, most of whom
were also eventually granted permanent residency (Fung & Jie 1996). These former
students and their families, sometimes known as the ‘Tiananmen Square generation’
(Ommundsen 2001), now make up an important segment of the PRC-born population in
Australia. There was a surge of Chinese settlement. The number grew to 206,591 compared
to 36,595 in the population census of 1986 (ABS 2006b), a five-fold increase in twenty
years.
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3.3.4 Selective Immigration Policies
The abolition of White Australia policy encouraged more Chinese immigrants to settle in
Australia. These new immigrants had the formal education, skill and often economic
resources to facilitate their economic and social integration within Australian society
without resorting to ‘sub-ethnic’ resources and politics (Yuan 1988). This forward leap had
already laid the foundation for the second generation to build up its own businesses.
Asian countries had been very prominent among the ‘top ten’ Australian immigration
countries (Collins 1995). During the last 15 years, there had also been new movements of
entrepreneurial migrants (Harris & Ryan 1994). The Business Migration Programme
(BMP) was officially launched (DILGEA 1990) in 1981. Since then, Australia had actively
sought to encourage foreign investments. Immigration flows had increasingly comprised of
highly educated and qualified people with good English language skills, many of whom
came from Asian countries (Ip et al. 1998, Chan 2001)
By 1996–97, the business skills intake increased to 5,600 or 8.4 percent of the total for all
the immigration categories (Castles et al. 1991). These new incoming groups played the
roles of sources and linkages for foreign investments. Hence, the influx of these groups also
brought in different working modules and principles in a western society. Australia, being a
big and resource-rich country with a small population, had always been the dreamland for
most immigrants to seek new opportunities and development (Collins 1991, 1995)
Business migration programme had always been a key component of Australian policies.
Ideally, the programme combined both the amount of monetary investment as well as the
skills of the intended migrants (Lowenstein 1992). The intention was to restore Australia’s
reputation as a business migrant destination. There were two main streams of non-
humanitarian selection, namely the skilled stream (that included business skills) and the
family stream. In addition to this selective migration programme, Australia had a
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humanitarian programme that selected refugees and asylum seekers for resettlement in
Australia.
The difference between these immigrants and previous immigrants was obvious. These
immigrants entered Australia based on stringent immigration selection processes that
focused on the applicant’s skills and qualifications, including technical and business skills,
and the transfer of business capital. While many of the Asian immigrants found jobs in the
labour market, these jobs were often below their past experience and skills levels (Alcorso
2000). Career advancements were limited or blocked. Collins (1996) attributed this to the
ascent ceiling as a blocked mobility factor that prevented their advancement. The benefit of
skilled migration to the Australian economy depended on the ability of skilled migrants to
find employment at a level that adequately reflected their qualifications.
Business migration programme was introduced in 1980s (Lowenstein 1992). The
programme attracted business people from all over Southeast Asia, especially from Hong
Kong and Taiwan, to settle in Australia. These immigrants were obviously different from
the Indo-Chinese refugees and the Chinese students from Mainland China. These business
immigrants were generally older and wealthier. They possessed better business skills and
experiences than the previous groups of Chinese immigrants in the previous 100 years of
Australian immigrants’ history (Boyd 1996, Chan 2001).
Immigrants could always inject new skills into the marketplace, created jobs through
consumption and entrepreneurial activities. They encouraged investment and created
economies of scale in domestic markets (Collins et al. 1995). These were skills that the
Australian government did not have to finance as they were financed by the education
systems of the countries of origin. With globalization and international migration, Australia
was competing against countries such as Canada, US and UK in this immigration category
(Li 1988).
Business migrants to Australia arrived as experienced entrepreneurs with large amounts of
capital ready to make their mark on the national and international markets. Their pathway
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to ethnic enterprise was often found to be very different from that of the traditional path of
ethnic Chinese. The pathway had been changed from wage labourer to entrepreneurs. The
changing demographics across nations give rise to a multicultural workforce throughout
various parts of the world resulting in a growing number of ethnic minorities in different
countries (Li 1988, Pio 2005), including migrant-receiving countries such as Australia,
Canada and New Zealand. The following section is to provide more information of Chinese
entrepreneurship in Australia.
3.4 A Brief History of Chinese Entrepreneurship
The history of Australian Chinese immigrant entrepreneurs has been shaped by racist
immigration policies and practices at all levels of Australian society in early years. The
racist immigration policy of exclusion and the discriminatory laws and practices shaped the
character of Chinese immigration in the first three-quarters of the twentieth century.
However, in the last quarter or the twentieth century, the government policy had turned to a
non-discriminatory immigration policy and to a settlement policy of multiculturalism
(Collins 2000). Both the Labour and Liberal governments had embraced economic
rationalism and globalization. Several factors, such as deregulation of the financial system
and the exchange rate led to fundamental changes to the Australian economy, particularly
the decline of manufacturing and the growth of finance, telecommunications and media.
Early historical data on migration indicated that there were no permitted free settlers to
Australia from China or other Southeast countries (Choi 1975). Organized settlement of
contract-indentured labourers first came to Tasmania in 1830, then to Western Australia in
1847 and from 1848 to New South Wales (Chan 2001). The resource-rich Australian
colonies attracted miners and merchants to NSW, Victoria and Northern Australia to mine
tin, diamonds and gold from 1851.
By 1901, many Chinese moved into entrepreneurship, particularly market gardens, food
and furniture markets (Choi 1975).There were 799 Chinese shopkeepers and groceries in
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New South Wales, and half of these were in the Sydney area, many as greengrocers: one-
third of the Chinese in Victoria and NSW worked in market gardens. Other Chinese moved
into the laundry business or opened small furniture shops. In 1912, the Chinese owned 168
factories (31 percent of the total number) and employed 818 workers (28 percent of the
furniture trade’s workforce (Yuan 1988).
Most of their entrepreneurial activities are concentrated in the small and medium
enterprises sector (Lever-Tracy et al. 1991, Ip et al. 1998). Their specific impact and role in
the country’s economic development is not well known or recognized by the society,
government and other stakeholders. In particular, most researches are concentrated on
earlier Gold Rush Era (Choi 1975, Collins 1991, Ip et al. 1998).
Today, the two largest Chinatowns are in Sydney (Haymarket-Dixon Street) and Melbourne
(Little Bourke Street). There are also satellites Chinatowns, of smaller scale, in the
suburban areas such as Cabramatta, Parramatta in Sydney, Box Hill, Springvale and
Richmond in Melbourne. These satellite Chinatowns are clusters of suburban businesses,
where the ethnic Chinese can do day-to-day grocery shopping, hairdressing, medical
consultations and others. In the past and even present time, restaurant business has been the
most typical of all Chinese immigrant entrepreneurship. The businesses are clustered
around the major ethnic centres or inner suburbs where the ethnic communities are based. It
has now become a feature of the Australian suburban and country town landscape, where
there are different ethnic restaurants, with the Italian, Chinese, Thai, Vietnamese, Japanese
and French cuisines being very popular (Collins 2003). Compared to the earlier generations
of Chinese immigrants in USA (Werbner 2001), Chinese in Australia also tended to engage
in ethnic enclave economy, both in obtaining and supplying Asian goods and services, such
as grocery stores, noodle factories, lawyers and dentists. These multiple and overlapping
markets form the basic network and foundation of Asian suburbs or commercially so-called
Chinatowns.
In early days, these industrial, commercial and service cluster providers were usually
networks of small or medium sized enterprises. According to Schmitz and Nadvi (1999),
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this clustering is particularly important in the early phase of a firm’s life, ‘helping small
enterprises to grow in riskable steps’ and to compete in broader markets. This formation is
important to introduce non-traditional Australian goods and services and to local economy
and to bring in foreign investment and business ideas to broader community.
Werbner (1999) argued that the ethnic enclave economies are collective, best grasped as
networked spaces embedded in particular industries which focus around the production and
distribution of particular types of objects. Outstanding individuals rise on the back of these
networks. For example, in 1975, the Asian clothing enclave economy in the UK barely
seemed to exist. Ten years later, Asian (mainly Indians) traders had increased exponentially
(Werbner 1999). They operated within the ethnic enclave economy, which manufactured
and sold clothing and related goods to outsiders, beyond the ethnic group.
‘Once the clothing enclave was established, it created a need for support network of new
kinds of services’; this was interesting according to Werbner (1999). Werbner believed
some businesses are under-capitalised and often run by inexperienced traders and
manufacturers and some even collapse. Asian millionaires rise and fall, but the gradual
expansion of the enclave continues. The self-feeding process within the enclaves enables
the newcomers to take up work in immigrant firms, and workers who have gained skills and
experience working for co-ethnic owners set up a new business of their own. This is similar
to the formation of Chinatowns in Australia.
The type of industry concentration through clustering and networking can deliver gains to
all parties involved. The economic growth through collective business networks can not be
ignored. Collaboration between different enterprises and businesses is vital to both the
survival of ethnic community and growth of individual businesses. Portes and Zhou (1996)
pointed out that these successful immigrant entrepreneurs can have social and economic
effects on their communities that will go well beyond purely individual success. Rather
than a statistical anomaly, this presence represents an integral part of the answer to the
question of whether immigrants and ethnic groups gain or lose when members engage in
independent economic activity.
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In the last twenty years, there has been a change in Chinese entrepreneurship, according to
the categories of ‘jobs’ or businesses’ that the entrepreneurs are involved in. In this study,
these are the first generation Chinese entrepreneurs. The following is a summary of
different pathways of the first generation Chinese entrepreneurs:
1. Entrepreneurs who arrive in Australia under the business migration programme.
They come with cash, business experience and a commitment to set up a business in
Australia.
2. Professionals, particularly those who get Australian medical, dentistry, law and
pharmacy degrees. They are also entrepreneurs in the sense that they hire employees
for their professional business.
3. Unskilled and semi-skilled with poor English language skills – their pathways are
similar to the Indo-Chinese refugees who are allowed into the country in the mid-
1970s. They did not have sufficient start-up capital for business. At the same time,
they were also trapped in the labour market in the diminishing Australian
manufacturing industry, particularly the clothing, footwear and textiles industries.
4. Marginal entrepreneurs who operate in the Chinese restaurants or small groceries,
milk bars and different types of franchises. While they are rejected by the
mainstream labour markets, being self-employed gives them more freedom to work
longer hours and to choose from a variety of jobs such as cleaning, small retail
businesses and other odd jobs where they can rely on their own family members and
friends.
3.5 Three Theories of Ethnic Enclave Economy
Ethnic resources are important for immigrant entrepreneurship success (Basu 2004, Fong &
Ooka 2002) According to Sequeira and Rasheed (2004), these resources are defined as
socio-cultural and demographic features of the whole ethnic group, which include informal
credit, business knowledge and shared expertise, business training, a ready source of lower
cost labour and social support. Lofstrom (2002) and Raijman and Tienda (2000) also
provided some similar examples of ethnic resources such as the knowledge and skills to run
businesses, ability in transferring experiences and managerial skills, availability of cheap
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labour, and the social support networks that facilitate a new owner in obtaining necessary
start-up capital. Such resources are important for new settlers in establishing their small
businesses in the host countries. Similarly, Sequeira and Rasheed (2006) suggested that
within the same ethnic group, immigrant entrepreneurs can actively utilize these resources
or passively benefit from them in their business activities because such resources help
reduce risks and uncertainties that a new immigrant would face when starting a business,
and they also facilitate to minimise transaction costs associated with labour and financial
market transactions.
Fairlie and Meyer (1996) provided another example of ethnic resources, namely the
exploitation of sector-specific human capital. Human capital includes training, experience,
judgment, intelligence, and the relationships between managers and workers according to
Barney (1991). The levels of human capital that immigrants hold and the ability to transfer
such information across ethnic groups can be key elements that contribute to immigrant
business success (Fairlie & Meyer 1996). Therefore, ethnic resources can explain why large
immigrant groups are more successful than small ones.
According to Clark and Drinkwater (2000), ethnic enclave refers to a concentration of
people from the same ethnic group within a specific geographical location. They provide
incentives and opportunities to find jobs, and to become self-employed within the
communities that they are familiar with. Similarly, Sequeira and Rasheed (2006) described
an ethnic enclave as an interdependent network of social and business relationships that are
graphically concentrated. This enclave is a source of social cohesion and economic support
which provides the immigrants with opportunities to socialize and associate with their co-
ethnic peers. In this network, people from the same community buy or sell ethnic products
and services. They also find employment or start their own businesses. Kupferberg (2003)
from an economic perspective defined an ethnic enclave as small enterprises operated and
owned by members of an ethnic community. Within such an enclave, networks are integral
parts which provide the essential information for the establishment of businesses and the
economic input requirements.
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Therefore, the larger the ethnic group, the more favourable the economic opportunity for its
entrepreneurs will be. Ethnic entrepreneurs know more about their tastes and preferences of
the customers and thus, provide them with the comfort and security of conducting
transactions under the environment of their own culture and language. Li and Dong (2007)
also argued that ethnic enclave theory implies that both the ethnic entrepreneurs and
workers gain superior economic benefits over those in general labour markets since the
ethnic owners obtain low-paid and trustworthy workers while enclave employees receive
rewards such as secure jobs through ties of ethnicity, friendship or family. As Sequeira and
Rasheed (2004) pointed out, the ethnic enclave plays an important role in providing access
to business information, opportunities and support for immigrant entrepreneurs.
To conclude, there is a range of theories associated with the ethnic enclave economy.
Researchers have developed and analysed these theories based on their empirical studies.
Many theories are closely related and some overlap. Some theories draw on cultural factors,
while some focus on socio-economic areas and some theories are related to ethnic and
racial issues. These theories may explain immigrant entrepreneurship for some groups at
certain times. Many of them can fit well with diverse ethnic groups, for instance, the
Chinese community. As indicated in the previous chapters, entrepreneurship is a field that
is characterized by widespread disagreement on basic models, assumptions and methods.
Similarly, a myriad of different understandings of the concept of entrepreneurship exists in
the economists’ perceptions of entrepreneurship (Djik & Turik 1995, Praag 1996). There
are three possible theories regarding the formation of Chinatowns, and they are as follows:
3.5.1 ‘Networking’ Theory The networking idea has been especially attractive as a means by which small firms can
collaborate to compete more effectively. The premise is that clustering and networking
among small firms enable them to achieve collectively more than they can individually, in
accessing and competing in the marketplace (Ingley & Selvarajah 2000). Stromback and
Malhotra (1994) highlighted the entrepreneurial advantages of Asian (mainly Chinese)
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immigrants because of their ‘cultural baggage’ and motivation. These advantages are
important in the future overseas networks of ethnic entrepreneurs in Australia.
The links with relatives or friends in the country of origin are often used to provide a
reliable source of supply, access to a marker, advice about market prospects and to secure
credit (Hsing 1996). Similarly, Lever-Tracey et al. (1991) concluded that Chinese
entrepreneurs are on the whole ‘successful, innovative and export orientated’ entrepreneurs
who have considerable overseas resources, including financial resources and business
networks. These networks provide an advantage when establishing import and export
activities because they provide ‘personalized, trust-based’ networks which extend into the
community and beyond, into mainstream society and overseas (King 1991).
Network activities of entrepreneurs create and maintain social contacts during the planning,
establishing and running of the businesses. These contacts that lead to successful outcomes
are their social capital and are a key component of entrepreneurial networks. Although they
are a set of virtual resources, these will be the key components during the establishment of
the businesses. Entrepreneurs require information, capital, skills and labour to start business
activities (Morokvasic 2003). The contacts that they rely on may also extend across
professional networks, reaching friends and colleagues from earlier jobs. These networks
can even extend relations to different organization, clusters of firms, as well as to other
people who help them set up the firm.
Traditionally, Chinese entrepreneurs rely a lot on their personal contacts through ‘guanxi’
(personal contact and network) with the immediate families, friends and business
associates. They are more adapted to this networking system. The multiple network system
or relation that the entrepreneurs depend on include several factors, such as age and length
of residence in Australia, education levels, work experience, family association and
personal contacts (Park & Luo 2001, Yang 2002).
Paradoxically, dependence on family members may, at the same time, restrict the network
from which the entrepreneurs seek a wider range of resources when planning and
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establishing or acquiring a business. Entrepreneurs may be more likely than average
population to have parents who also run small businesses. Therefore, their own ideas during
planning and contacts through the families may be restricted by the own experiences of the
parents (Carney 1998, Yeung 2000). On the other hand, a network of loosely coupled
acquaintances offering skills, knowledge and insights will reduce the importance of family
members. However, the range and types of businesses set up may be larger and wider than
the ones through the sole dependence on the family ties. There are always pros and cons to
this familial networking system.
Nowadays, the networking system extends beyond the community. Informal networks play
a major role despite the extensive use of government and community services, such as
employment centres, legal aid offices and welfare agencies. Even after a period of time
when reliance on friends and kin has decreased, informal networks remain the single most
important support for most Chinese and are the most important social resource within the
Chinese community. Such network provides informal but personal experience of local
business environment, access to capital, bureaucracy standards and requirements, and local
Australian customs and cultures (Carney 1998, Friesen & Ip 1997).
Although Chinese are accustomed to being a minority and they are not overtly political,
they are strongly oriented towards trade and business and they have an effective informal
structure within the community to provide information, jobs and welfare services
(Selvarajah 2008).
3.5.2 ‘Location’ Theory The theory of the urban growth machine (Logan & Molotch 1987) provides an
understanding of ethnic cluster development, where interest in a place, in the first instance,
may have been ‘planted’ by economic self-interest of an individual, organization or group
of people (Light 2002). Immigrants are attracted to and guided to a neighbourhood by
ethnic social networks anchored among friends and relatives who have moved there
(Massey 1985, Light 2002)
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The number of English-born residents has nearly doubled in Box Hill, for example 125 in
1976 to 212 in 2001. However, in the same period the Chinese, including those from Hong
Kong, jumped from 17 to 952. Chinese professionals choose the eastern suburbs because of
their perceived security. A huge influx of Chinese students has also occurred in the past two
decades. In 1983, there were fewer than 1000 Chinese-born overseas students in Australia.
By 2004 there were 68,857 China born students studying in Australia. The 1997 takeover
of Hong Kong by China also saw a flood of people leave the country. Many of these people
settled near Box Hill. Ip et al. (1998) suggested that it is not surprising to find that many
immigrants tend to move into the middle and upper middle-class suburbs of the major
Australian cities because of their privileged socio-economic background. In Sydney, for
example, they prefer to settle on the North Shore and in the newer areas of the Hills
District, as well as around Hurstville and Sylvania in the south.
This creates a community, within which the individuals and groups utilize the locality as a
convenience of meeting other immigrants of same ethnic background. These immigrants
are hoping to create collective cohesiveness and thereby facilitate the pursuit of collective
goals. Within the community, the immigrants can set up their businesses and run the
businesses between different suppliers without going outside the suburbs. This adds to the
security of establishing the businesses in a foreign country.
At the same time, this ‘working within the local suburb’ system may prohibit the inflow
and outflow of information. Strong solidarity with in-group members may create over-
embeddedness that reduces the flow of new ideas into the group, resulting in parochialism
and inertia (Gargiulo & Bernassi 1999). The reliance on the locality may also prohibit the
immigrants to extend physically outside the boundary, and therefore, the chances of
adaptation into Australia more broadly will only become lower. Even though the economy
itself is self-sufficient, it will not be able to extend further into other areas.
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3.5.3 ‘Social Capital’ Theory The classical economists identify land, labour and physical capital (i.e. assets that generate
income) as the three basic factors shaping economic growth. Compared to physical and
human capital, social capital, members of ethnic community organizations and associated
networks use ‘social capital’ or advantages such as capital from community sources, co-
ethnic employees, co-ethnic suppliers and co-ethnic markets. Coleman (1988) explained the
nature of the relationship between human capital and social capital, which include age,
experience, education and the influence of the family. According to Portes (1998), financial
capital which is measured by wealth and income levels can also be increased by social
capital. Literature supports the growth machine view in that it says belonging to an ethnic
group enhances the establishment and continuing business success of ethnic business
(Adler & Kwon 2002, Portes 1998 & Woolcock 1998).
Collins (1996) argued that innovative strategies designed to increase both the rate of ethnic
small business formation and the success of existing ethnic small business will strengthen
the Australian economy. More importantly, it is also an indirect method to increase
employment in the minor ethnic groups. Although there were cases that some groups of
non-English speaking background (NESB) continued to have rates of unemployment four
to five times the national average. By creating more ethnic small business, it will alleviate
the pressure on the job creation for these particular groups of immigrants.
The concept of ethnic resources or social capital that has emerged from ethnic
entrepreneurship studies refers to some identifiable group resource, such as ethnic networks
and ethnic solidarity that allow resources to be gathered, shared and utilized (Greene &
Chaganti 2004). Their work alludes to the kinds and quality of ethnic resources that
immigrants possess or can access that explained their different propensity for
entrepreneurship. For example, in the beginning, these Chinese specialised in catering
goods and services to their own ethnic communities, or in supplying ethnic goods and
services, such as grocery, clothing, hairdressers, video stores and restaurants. These retail
businesses tended to run within areas of high concentration of ethnic Chinese. They were
not economically significant, as they contributed to very small-scale operations. Palm
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(1985) found that home sellers select real estate brokers partially on the basis of race and
that real estate brokers tend to work for ‘brokers of the same race or ethnicity’. In two other
studies by Teixeira (1997 and 1998), it was found that Portuguese real estate agents served
a predominantly Portuguese clientele. In fact, 52 percent of Portuguese home buyers
utilised a Portuguese agent in their search. Portuguese brokers had ‘cultural expertise’ in
dealing with co-ethnics whose ‘behaviour and needs’ differed from those of non co-ethnic.
These businesses remain. Over the years, new types of businesses such as import and
export trading, education providers, student accommodations are added to the list. The
change of business types change because of different times, plus different economical and
social environments. The subtle change in the sizes of operations cannot be ignored, as they
represent numerous business deals and continuous supply of low cost items to the
Australian community (Millington & Eberhardt 2006).
Li (2001) suggested that the immigrants with more human capital are more inclined toward
self-employment, possibly because these immigrants have greater access to capital and
other resources, as well as more exposure to business experiences. The finding essentially
suggested that immigrants with more resources and qualifications are more inclined to
engage in self-employment. Adler and Kwon (2002) suggested that there are three
dimensions of social structure, each rooted in different types of relations: (1) market
relations, in which products and services are exchanged for money or bartered (2)
hierarchical relations, in which obedience to authority is exchanged for material and
spiritual security, and (3) social relations, in which favours and gifts are exchanged.
Therefore, the self supporting community takes shape and quickly attracts many other
immigrants to join in. Different localities and enclave clusters are formed. Immigrants are
more inclined to work within the social and economic communities which they are more
familiar with, especially the way that businesses are carried out and limited non-regulatory
styles that they can enjoy. These three theories combine to show the multi-dimensional
influences on the formation of Chinese diaspora or Chinatown clustering in earlier days of
settlement in Australia.
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3.6 Chinese Diaspora
The concept of ‘diaspora’ has gained credence as a way to understand the complexities of
global movements and shifting identities of migrants and their descendants in the dystopia
of late modernity. According to Gilroy (2000), diaspora is identified by ‘a relational
network, characteristically produced by forced dispersal and reluctant scattering’. Similarly,
Leung (2003) conceives diaspora as ‘a dynamic patchwork, or a fluid collage made up of
multiple and diverse journeys, sometimes diverging while other times overlapping,
embarked upon by individual of a dispersed community’. Diaspora has been used in various
ways in the literature. Traditionally, the concept of diaspora describes groups of people
who have been dispersed from a common ancestral homeland and have settled in different
places. It also suggests that individuals living across the world identify collectively with
each other base on their host societies and the geographical place from which their
ancestors originate (Levitt & Waters 2002). Earlier migration research suggests migrants
will sever physical linkages with their homeland as they become integrated into the
receiving country. As such, ‘diaspora’ is conceived as a geographic concept which focused
on ‘place’.
Chinese communities in Australia are not homogeneous. Although they may all call
themselves Chinese, they differ among themselves according to dialect, sub-dialect, clan
and family, all of which are linked to their place of ancestral origin in China, as well as by
country of birth outside of China. The degree to which these differences are considered
important varies from individual to individual, but a community, whether it is constituted
for social or business purposes, always comprises individuals who share one or more of
these secondary characteristics in addition to their collective cultural characteristics (Xiao
2001).
For the first 50 years of Chinese settlement in Australia, almost all Chinese who were born
overseas were born in China. But the Chinese diaspora in Australia today includes many
ethnic Chinese who were born in Vietnam, Malaysia, Hong Kong, Singapore and Taiwan as
well as those born in China (Ho & Coughlan 1997). For example, one third (34.1 percent)
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of the Vietnamese born in Australia in 1986 reported that they were of Chinese ancestry.
The 1986 census also showed that 93.3 percent of those born in Taiwan were ethnic
Chinese, as were 84.6 per cent of those born in Hong Kong and Macau, 61 percent of those
born in East Timor, and 60.6 percent of those born in Malaysia and Brunei. In addition,
42.7 percent of those born in Singapore, 40.7 percent of those born in Cambodia and 27.4
percent of those born in Indonesia claimed Chinese ancestry (Ho & Coughlan 1997).
Immigrants are drawn to settle in certain places for personal, social, cultural and economic
reasons. As the numbers grew, whole suburbs underwent subtle and unsubtle personality
changes. Historically, Victoria had always enjoyed longer perspective on migration than
any other state in Australia (Selvarajah 2008). Since 1840’s, immigrants from all over the
world came to Melbourne when the gold rushes began in 1851. Italians, French, Poles,
Germans, Americans and Chinese along with the major source of immigrants – British Isles
began to settle in different locations around the Gold Fields. The story of Chinese on the
gold fields was mostly one of peaceful co-existence. While there were occasional anti-
Chinese riots, these came well after the initial gold rush and large-scale Chinese
immigration. In the second half of the 19th century, it led to state and then national laws
aimed at keeping the Chinese out and later discouraging even non-Anglo-European
migrants,. By 1966, the non-white ban on immigration was lifted. This was replaced with a
points system that still favoured Europeans, but by the late 1960s, more than 6,000
immigrants a year were arriving from Asia.
In early days from 1901 to the 1960s, adaptation which was based on the White Australia
policy required migrants to ‘shed their cultures and languages and be assimilated into the
host population so they would rapidly become indistinguishable from it’. Migrants were
expected to conform to the norms of Anglo-Australian culture, again emphasizing the
desire for homogeneity. The adaptation policy, in keeping with the desire to minimize
difference, was not sensitive to the special needs of migrants once they had arrived in
Australia. This adaptation policy underwent a restructuring in 1964 when the ‘Adaptation
Section’ became the ‘Integration Section’. According to DIMIA (2003), integration policies
allowed immigrants to speak their own languages and retain their customs, but expected
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their full participation in an ‘integrated Australian culture’. Under integration, the idea that
migrant disadvantage ought to be ignored was effectively discarded as a large number of
migrants, especially those whose first language was not English, experienced hardships as
they settled in Australia, and required more direct assistance. The importance of ethnic
organization in helping the process of resettlement was recognized. The Department of
Immigrations began to fund certain some migrant aid and education programs (Collins
1991), and expenditure on migrant assistance and welfare rose sharply in the early days in
response to these needs (DIMIA 2003).
The English, Italians and Greeks were overwhelmingly the largest groups entering
Melbourne from an almost exclusively European pool. The English went to the outer east,
far south and bay side; the Italians went north and north-west; the Greeks intermingled with
the Italians in Northcote, Coburg, Preston, Brunswick and Bulleen, but also gravitated
south-east around Oakleigh and west around Williamstown and Altona. Other nationalities
occupied pockets. The Polish-born settled in Caulfield, reflecting the fact that most were
Jewish refuges and this was where Australian Jews had set up synagogues and schools.
Since 2000, Chinese and Indians immigrants have outnumbered those arriving from Britain
for the first time. Malaysia and Vietnam were the next most common countries of origin.
Added in thousands of international students, and the city’s cultural topography had
become very finely contoured indeed. According to the 2001 Census, Australia was a truly
multicultural country and was home to 4.1 million people born overseas, from over 200
countries. The racial composition of Australia’s population had changed dramatically over
the past 200 years. The population had gone from an almost totally Aboriginal population
to predominantly Anglo-Celtic by 1900, and now a multicultural population.
It was found from the 2006 Census that 70.9 percent were born in Australia (ABS 2006b).
Of those born overseas, the three main countries of birth were United Kingdom (4.3
percent); New Zealand (2.0 percent) and Italy (1.0 percent). No other country accounted for
one or more percent, signifying the diversity of Australia’s overseas-born population and
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that the Asian-born were not the dominant group of immigrants as perceived by many
Australians. The number of English-born residents has nearly doubled in Box Hill
There has always been debate on the socio-economic contributions made by immigrants to
Australia. The immigrants do not only contribute in financial terms during their stay in
Australia; from renting a place, to buying a car to sending their children to school, they also
created limitless opportunities for themselves and other fellow Australia in terms of jobs
creation, businesses opportunities and interaction during their daily encounters.
The establishment and growth of Chinatown within Chinese community deserves a lot of
attention and investigation. Not only the Chinatown represents a commercial precinct
where trading practices occur every day, it also influences the surrounding suburbs in terms
of present and future development. The other areas such as house pricing, number of
immigrants living in the surrounding suburbs, supporting facilities, cultural factors are also
affected by the establishment. These cannot be ignored.
In the past, entrepreneurship in ethnic minority communities could also contribute to
reducing social exclusion and contributing to raising living standards in groups that could
be often among the more disadvantaged in society. Moreover, because of a tendency for
ethnic minorities to concentrate in particular localities, the development of some local
economies, and the standard of living within them, might be heavily influenced by the
nature and extent of ethnic minority business development. Glezer (1988) argued and
supported the notion that earlier immigrants faced ‘blocked mobility’ as employees, and he
suggested that there was a strong tendency of some ethnic groups to have a proportionately
larger presence in small business than British migrants and the majority population had
often been as much the product of constraints and limitations as of their preferences, skills
and cultural assets.
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For example, Chinese furniture makers and laundry keepers were not permitted to sponsor
Chinese migrants to help in their business, so that they had trouble in finding sufficient
labour. In addition, the Factories and Shops Act (NSW 1896, Victoria 1896) defined any
workshop employing one or more Chinese person as a factory, whereas four Europeans
were required for a ‘factory’ to exist. This meant that all small Chinese workshops fell
under industrial regulations concerning wages, conditions of work and limited hours of
opening.
The other solution was to develop a niche market such as market gardeners where they
developed into large wholesale fruit and vegetable distributing firms. Unlike the furniture
and laundry businesses, which competed strongly with other businesses, the Chinese
market gardeners found a niche that did not threaten others and did not attract
discriminatory legislation (Choi 1975).
In the last 20 years, Chinese population increased and the growth in the immigrant
population and their urban ethnic concentrations has prompted the expansion of the
immigrant enclave economy which offered a protected market for immigrant entrepreneurs
to engage in ethnic business and self-employment (Portes & Zhou 1996). At the same time,
the styles and sizes of the community has been more complex and diversified. In
Melbourne, Chinatowns were formed in the major areas of high concentration of Chinese,
such as Melbourne Little Bourke Street, Ballarat, Footscray, Box Hill and Springvale.
Surrounding suburbs grew in terms of Chinese population
Entrepreneurship in the Chinese community can also contribute to the developments of
‘cluster’ economies, because of a tendency for the community to concentrate to live in
certain localities. Hence, business development within the localities will flourish. The
flourishing as such will further ‘strengthen’ the social status of the community. On the
other hand, Woolcock (1998) explained that sharing information and providing advice and
training to co-ethnics can also be counter-productive as they will become another source of
future competition which can lead to market saturation if the ethnic market is limited.
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However, this can be disadvantageous to the growth of the businesses. The argument is
this: ethnic Chinese entrepreneurs, sometimes the opportunists, follow each other into an
economic enclave in entrepreneurial chains. Rivalry needs to be managed alongside trust:
Asians never form a single representative group, but on the contrary, they engage in cut-
throat competition with one another. Hairdressing and restaurants are the most dominant
business type in Box Hill and surrounding suburbs. However, the growth of the population
does not support the continuous opening of new shops. In reverse, the fierce competition
can only force the retail price to go down, without improvement in the services or products
being supplied (Smart 2003, Taormina & Lao 2007). Traditionally, Chinese will only cut
the price down to a cut-throat level that the businesses with most finance can survive
Although the command of an enclave economy, such as the clothing traders in Manchester
in 1990s (Werbner 2001), enabled an ethnic group to acquire collectively wealth and
influence, concentration in a single industry might also lead to a collapse because of
oversupply of the same goods or services. The following sections will illustrate the history
of earlier days, the formation of Chinese diaspora and the importance of Chinese
communities.
3.7 Summary
Apart from showing the different phases of immigration, this chapter provides a detailed
explanation of how the ethnic enclave economies are formed. This progression of these
phases coincides with the Chinese migration history in Box Hill. The concept of ethnic
resources that has emerged from ethnic entrepreneurship studies refers to some identifiable
group resource, such as ethnic networks and ethnic solidarity, which allow resources to be
gathered, shared and utilized. Three theories of ethnic enclave economies have been
studied, these explain the kinds and quality of ethnic resources that immigrants possess or
can access. These theories have also explained their different propensity for
entrepreneurship.
The importance of Chinese entrepreneurship and related diaspora cannot be ignored. These
immigrants introduce multilingualism, cultural sensitivity and knowledge, training and
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qualifications earned overseas. These attributes reside in many ethnic entrepreneurs and in
the ethnic resources they can develop their enterprises. Immigrants are drawn to settle in
certain places for personal, social, cultural and economic reasons.
In the next chapter, the elements of successful Chinese entrepreneurship will be studied.
These will be compared to the western entrepreneurs, to show the possible differences
between the first and second generation Chinese entrepreneurs in Melbourne.
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Chapter 4
Characteristics of Successful Chinese Entrepreneurs
4.1 Introduction
Apart from research findings that investigate the settlement and migration patterns of
Chinese entrepreneurs in various countries (Boyer 1995, Chah 2002, Collins 2002, Li 1988,
Selvarajah 2004, 2008, Smart 2003, Tseng 1995), recent statistics also show that the
Chinese entrepreneurs are important drivers of growth in many of the local and the world’s
economies (Collins 1996, Fong & Ooka 2000, Frost 2002). It is of great interest to find out
if the first and second generations exhibit different patterns of entrepreneurial profiles.
However, research until present does not reflect this. In fact, literature concentrates on the
differences of psychological profiles and identity of entrepreneurs (Bond and Hwang 1986,
Chan 1999, Chan 2000, Clammer 2002). These questions are important to fully understand
the entrepreneurial process, success and the Chinese entrepreneurs’ contribution to the
development of the economy. This study aims to investigate the factors that influence the
first and the second generation Chinese entrepreneurs in Melbourne.
In studying the phenomenon of entrepreneurship in the two generations, two main
emphases in the literature source are sought. Firstly, the knowledge and the resource
needed to create and to manage new business are culturally embedded and historical
specific (Carroll & Hannan 2000, Chu 1995). That is, Chinese entrepreneurship is different
from western entrepreneurship because the Chinese culture and history have a strong and
deep impact on the entrepreneurial process of the Chinese.
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Second, it has been established in several entrepreneurship studies that the first generation
Chinese have access to fewer resources, have less knowledge, and have a lower societal
position compared to the local population (Collins 1991, 2000, Harris & Ryan 1994 and Pe-
Pua et al. 1996). Thus, based on this emphasis, the Chinese entrepreneurs will differ from
the Australian with respect to their personal and business profile: they start and run
businesses in different sectors, develop different products, pursue different goals and
structure their businesses in a different fashion (Pistrui et al. 2001, Ralson et al. 1993,
Selvarajah 2008, Tseng 1995, Tseng 1998, Waldinger et al. 1990). These significant
features of Chinese entrepreneurship contribute to the diversity of entrepreneurship in the
economic process (Backman 1995, Chen 2001, Yeung 1999, 2000).
Hence, studying the various elements of Chinese entrepreneurship and its process including
how Chinese successfully start-up and grow their entrepreneurial ventures will provide a
better understanding of an important sector of the economy.
4.2 Psychological Traits
There are several approaches to describe the entrepreneur and determining business
success. One of the approaches is based on the psychological perspective, which argues that
entrepreneurs often exhibit a typical characteristic profile. Numerous studies on Chinese
entrepreneurs have endeavoured to develop a profile of Chinese entrepreneurs (Ahlstrom et
al. 2004, Collins 2002, Liang 1987) and establish whether a ‘typical’ profile of Chinese
entrepreneurs exists, and if so, whether people matching this profile are more likely to
make successful entrepreneurs (Bennet & Dann 2000). Demographic features such as age,
marital status, ethnicity and educational background, as well as the psychological or
personality traits of the Chinese entrepreneurs, are often studied in order to develop this
profile.
Other factors commonly investigated in such studies (Ahlstrom 2004, Bennet & Dann
2000, Taormina and Lao 2007) include educational qualifications, age at business
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commencement and business type. As socio-demographic and societal changes have
occurred in the thirty years, and access to education about entrepreneurship and business
management has increased for Chinese, it is likely that this situation has changed (Carney
1998, Chen 2001).
However, one area that has demonstrated commonality between entrepreneurs is the study
of psychological characteristics, indicating that entrepreneurship is related to the
behavioural and personality traits of the individual entrepreneur (Brandsttar 1997, Hull et
al. 1980). A study by Yusuf (1995) demonstrates the business characteristics frequently
displayed by individual successful entrepreneurs: they include good management,
satisfactory government support, marketing factors, overseas exposure, level of education
and training, access to finances and level of initial investment, prior experience and traits
such as self-confidence, charisma, perseverance, local reputation and trustworthiness, prior
experience in business and political affiliation. On an individual level, recent studies
(Bennett & Dann 2008) outline the personal characteristics, they include; commitment,
determination and perseverance; the drive to achieve and grow; persistent problem solving;
internal locus of control; calculated risk taking; and integrity and reliability. Innovativeness
is another characteristic that researchers (Kao 1993, Schumpeter 1979, Timmons 1999)
have linked with entrepreneurship. This supports the perception that entrepreneurs are
creative and innovative, using these skills to solve problems and develop new strategies.
The most mentioned of these personality traits are high need for achievement, high need for
power or internal locus of control, high need for affiliation, risk-taking and having self
confidence (Gartner 1989, McClelland & Winter 1971). These characteristics have been
identified as leading to the emergence and consequently the success of entrepreneurs.
However, the trait or personality contribution to the description of entrepreneurs has been
criticized on the grounds that the diversity among entrepreneurs is much larger than
personality descriptions. The problem identified with the psychologists’ approach is they
seem to assume the entrepreneur to be a particular person, in a fixed state of existence
(Gartner 1989).
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The other personality trait is strength, a concept which broadly covers personality attributes
such as resilience, risk-taking, hardiness, persistence, patience and resourcefulness. Thus,
individuals with a strong and open personality disposition are more likely to face
challenges successfully and are better equipped to develop host communication
competence, and in so doing, facilitate their own intercultural transformation and growth
while they go through the adaptive process in the host society (Kim 1994). Also, the lack of
proficiency in the everyday language of the host society may prove a stumbling block as
well as a source of anguish and frustration for migrants (Scollon & Wong-Scollon 1990).
4.2.1 Self-Satisfaction Personal motivations have been labelled as another category of motivators embedded in the
push and pull factor theory, such as the desire for autonomy, to control one’s destiny and
the need to be personally fulfilled. The motivation for self-fulfilment is very strong.
Entrepreneurship has provided an opportunity for the immigrants to discover a new-found
sense of accomplishment in supporting themselves instead of relying on being employed by
others and government welfare systems.
This shows that entrepreneurship is related to the behavioural and personality traits of the
individual entrepreneur (Bennet & Dann 2000). This accords with the findings of Woldie
and Adersua (2004) that self-satisfaction, desire for independence, desire for autonomy,
control of one’s destiny and being the boss are very important personal reasons for business
ownership. Psychological characteristics are strong influences for potential entrepreneurs.
Pitstrui et al. (2001) found that Chinese entrepreneurs are most motivated by the following
four items:
• Desire for higher earnings;
• Desire to have fun;
• Need for achievement; and
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• Desire to make a direct contribution to the success of an enterprise.
The data also found that Chinese entrepreneurs are being driven to achieve a personal sense
of accomplishment, foster family well-being, and develop new skills.
Brandstatter (1997) looked into one of the psychological factors in the entrepreneurship.
The owners indicated how they perceived their past and expected future success as
entrepreneurs. As predicted, owners who have personally set up their business (founders)
are emotionally more stable and more independent (self-assertive) than owners who have
taken over their business from parents, relatives, or by marriage. The personality
characteristics of people interested in setting up their own business are similar to those of
the founders. In addition, independent and emotionally stable business owners are more
satisfied with their roles as entrepreneurs and with the success of their business, prefer
internal attributions of the business outcome and are more inclined to expand their business.
This will be all related to the personal confidence in managing their own businesses.
In addition, dissatisfaction in previous employment has been suggested by many earlier
researchers (Wirth 2001). Another possible factor in influencing people to leave their
previous employment and pursue a business venture is slow career progression (Moore &
Buttner 1997). Therefore, independence gained by self-employment and power to make
own decisions based on their own choices are the other two main attractions that
entrepreneurs seek to obtain. The motivation for people to go into small business ownership
vary, they include personal satisfaction, independence and flexibility. Even given the
anxiety and stress that go hand-in-hand with operating a small business, most small
business operators appear to derive more satisfaction by being the decision maker rather
than the recipient of decisions made by others (Walker and Brown 2004).
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4.2.2 Potential Seeking
Lofstrom (2002) found out that self-employed immigrants are found to do substantially
better in the labour market than wage or salary immigrants. The attractiveness of the
potential to gain more monetary reward is one of the important factors in the consideration
of being entrepreneurs.
The entrepreneur, however defined, is a self-motivated individual who takes the initiative to
start and build an enterprise relying primarily on self rather than others to formulate and
implement his or her goals. Personal attributes such as independence, need for control, self
reliance, confidence, initiative, and resourcefulness have been frequently cited as closely
associated with entrepreneurial values and behaviour. Mueller and Thomas (2000) used the
term ‘internal locus of control’ to describe the mentioned factors as basic internal value of
entrepreneurs required for successful businesses. Interestingly, Pinfold (2001) concluded
that entrepreneurs tend to be overly optimistic about their chances of success, regardless of
whether or not a high level of optimism is warranted.
Founder entrepreneurs tend to have individualistic orientations and motives. Most new
business entrepreneurs in the Huisman (1985) 12-country study are driven by opportunities
to ‘develop oneself’ and ‘to lead rather than follow.’ Key motives identified by the
Scheinberg and MacMillan (1986) 11-country survey are the ‘need for approval,’ wealth,
personal development, independence, and escape from an unsatisfactory job. Opportunistic
behaviours are part of human nature, and thus they are often perceived as self-interested.
One type of entrepreneurs (self-satisfaction) is more involved and concentrated in the areas
in which they have expertise; the other type (potential seeking) of entrepreneurs is more
interested in expanding ‘outside the local circle’ and forming greater contacts with other
businesses.
In summary, these personal traits among others are considered to be crucial in
distinguishing successful entrepreneurs from unsuccessful ones (Brockhaus 1982). Chinese
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entrepreneurs will therefore be investigated within this framework to find out whether they
possess these unique traits, and whether their personality trait backgrounds relate to their
business success. The testing of the related hypothesis will also help to provide knowledge
about the attributes of Chinese entrepreneurs and the extent to which this theory is
applicable. It is therefore hypothesized that:
H1: The background of the entrepreneurs is related to the success of their businesses.
4.3 Motivations
Another determinant of successful entrepreneurship, which is frequently researched, is the
motivations for business ownership. Previous studies (Bennet & Dann 2000, Gilmore 2004,
and Walker & Brown 2004) have investigated reasons why entrepreneurs choose the path
of entrepreneurship. These studies conclude that a combination or range of factors, rather
than any single factor alone, provides the impetus for entrepreneurs to create their own
business ventures.
For instance, psychological motivations such as achievement, independence, and locus of
control have been widely investigated with regard to their influence on business start-up
(Lerner et al. 1997). Economic motivators include economic necessity, a path to material
independence and greater control over the products of labour (Bennet & Dann 2000). In
addition, dissatisfaction with circumstances can describe a combination of factors including
disillusionment with career, perceived lack of career opportunities, flexible work patterns
and the challenge of business ownership.
4.3.1 Economic Motivations
According to the push and pull factor theorists, one of the universal motivations which push
the immigrants into starting their own business ventures is the need to generate income.
Many first generation Chinese are pushed into whatever market economic activity they can
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take up. The changing nature of government programmes coupled with the lack of
opportunity for entry-level work in Australia have led these immigrants to view
entrepreneurship as the best way out of the permanent cycle of poverty (Choi 1975, Collins
1991, Strahan & Luscombe 1991). As a result, they look at their own business as the best
way to achieve those things the system has failed to provide. After realizing dependence on
government programmes is doing nothing to improve their self-esteem, many immigrants
have tried to enter the workplace (Strahan & Luscombe 1991). To save face, many
immigrants have rejected government assistance, started a new job, and at the same time,
launched a new business (Hwang 1987, Ng 1982).
The research by Lever-Tracy et al. (1991) highlighted the importance of the family to
Chinese entrepreneurs in Australia. They found that 80 percent of the Brisbane
entrepreneurs surveyed used family labour, including spouse, children and other extended
family members. Family members are regarded as being trustworthy and committed to the
business. A typical entrepreneurial profile in terms of experience and family background
has been more clearly defined in the second generation. Adult encouragement, parents’
occupations and family interpersonal relationships all gave indications of affecting
entrepreneurial tendencies (Light & Gold 2000). The additional adult encouragement, the
role model of a successful entrepreneurial parent, and a supportive relationship which
encourages independence and achievement are factors strongly linked with later
entrepreneurial behaviour.
This is, particularly, important in the start-up phase to keep the operation cost down and
enhance the likelihood of surviving the competition. However, this reliance on family
labour input is hardly unproblematic; in particular it becomes a common ground for
disagreement between parents and children. According to Collins et al. (1997), data from
the 1996 survey of immigrant and non-immigrant entrepreneurs in Sydney, Melbourne and
Perth showed that very few, generally less than ten percent, of the immigrant entrepreneurs
surveyed said they had a family business background in the first generation.
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Labour cost has always been one of the major reasons of decline in the manufacturing
sector. Therefore, for any enterprise to succeed, the owner has to either compete on:
1. Price
2. Variety of goods or services provided
3. Uniqueness of the goods or services provided.
For example, over the past 20 years, Singaporean electronics firms relocated to
neighbouring Johor province in Malaysia (Hobday 1994), and Hong Kong-based firms
relocated to South China (Hsing 1996). These ‘migration’ of business set-ups indicate and
support the trend of the shift of high labour cost countries to lower labour cost countries. In
Australia, the clothing industry has already ‘died’ and other manufacturers are at risk, and
they were unable to compete with the energy, cheaper labour and sheer size of China’s and
India’s industries.
The same practice of relocating the manufacturing unit to lower cost sites represents
evidence not of technical upgrading but the continuation of labour-intensive low-cost
production strategies employed by the first generation entrepreneurs. In Australia, this
gives the entrepreneurs an immediate advantage to win over the competitors as the labour
cost in Australia is always on the high side.
4.3.2 Social Motivations Socio-cultural value is a major aspect in an entrepreneurial environment. In particular,
Earley’s (1997) theory of face provides a model to connect socio-cultural dimensions to
individual decision to enter entrepreneurship. Earley’s (1997) theory of face derived from
Chinese culture, in which two kinds of faces are identified, lion (moral character) and
mianzi (external prestige). Unlike lion, which is a stable internal characteristic, mianzi is
more fluid, subject to the flow of external successes and failures, and required active
management. Mianzi is more relevant to entrepreneurship because it relates to social status,
achievement, and success and figures prominently in business.
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There are two main processes related to face: gaining face and losing face (Ng 1982). Some
efforts are intended to enhance face, others to prevent loss of face. There are strong feelings
of pride, satisfaction, and confidence followed from gaining face while strong feelings of
shame accompanied losing face. These two aspects of face should serve as predictors of
important decisions with visible external outcomes such as starting a business.
Concern for face increases as the visibility of outcomes increases. Occupation is a
significant, visible characteristic that affects the presentation of the self in society. Social
status systems have received particular attention in the west. In the east, social status is the
basis for the Confucian system of social order. The goal of facework is to enhance standing
in relevant social groups through shaping member impressions. Mianzi can be acquired in
three primary ways: 1) occupation of a high social rank, 2) achievement and accumulation
of influence, and 3) family prestige, wealth, or power.
A second motivation related to face is to prevent its loss. Potential loss of face motivates
actions to avoid it (Earley 1997). A serious threat to loss of face when contemplating
starting a business is the possibility it may fail. Since more than half of all new businesses
may fail within the first five years, the risk of failure is a threat to face when considering
entrepreneurship as a vocation. A strong sense of shame is necessary for loss of face to be
an effective sanction. The desire to avoid shame from letting down the family is a primary
motivator in Asian societies.
Earley (1997) viewed face processes as universal, and that Asian societies base cultural
sanctions more on shame than guilt while western societies are more guilt-based. Shame
responds to external social sanctions, guilt to internal personal convictions of right and
wrong. Shame-based cultures orient citizens toward the social dimensions of success and
failure, namely status, enhancement and shame, respectively.
In summary, entrepreneurial motivations are usually explained by ‘pull’ and ‘push’ theory
(Brush 1992). Push factors are elements of necessity such as insufficient family income,
dissatisfaction with a salaried job, unemployment, and a need for a flexible work schedule
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because of family responsibilities. Pull factors relate to independence, self-fulfilment,
entrepreneurial drives and desire for wealth and social status (Ducheneaut 1997). It has
been confirmed in the literature that these motivational factors play a key role in successful
business creation and development. It is therefore likely that the motivational factors of
Chinese entrepreneurs influence their business success, leading to the following hypothesis:
H2. Entrepreneurial success is related to the motivation of the entrepreneurs.
4.4 Adaptive Opportunism – Innovative Entrepreneurship
Assigning the role of innovator to the entrepreneur implies that successful entrepreneurs
adopt and implement competitive strategies such as introducing new products and services,
new methods of production, opening new markets or sources of supply, or even
reorganizing an entire industry. This is the most obvious criterion of being an entrepreneur.
A key condition of entrepreneurial strategies is the capacity to assume risk by the person or
persons who have the prerogative to take action – either the owner or manager of group of
managers (Osborne 1995). People who start new businesses vary in the degree of
entrepreneurial talent and temperament they possess. The same is true of strategic leaders
inside large organization, where entrepreneurial people are required to champion the
change agenda in dynamic and turbulent environments (Thompson 2004).
Collins (1996) argued that innovative strategies designed to increase both the rate of ethnic
small business formation and the success of existing ethnic small business will strengthen
the Australian economy. More importantly, it is also an indirect method to increase
employment in the minor ethnic groups. Innovativeness is another strong characteristic that
researchers (Kao 1993, Schumpeter 1979, Timmons 1999) have linked with
entrepreneurship, supporting the perception that entrepreneurs are creative and innovative
and use these skills to solve problems and develop new strategies, which impacts their
businesses positively.
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Schumpeter’s (1945, 1979) renowned perspective of entrepreneurship, which emphasizes
creativity and innovativeness in venture creation and being able to use one’s skills to create
new businesses. Drucker (1998) suggested that innovation is a better criterion for judging a
small business than age and size. The term ‘innovation’ is first associated with
entrepreneurship by Schumpter (1942). Innovation is the conversion of ideas into products,
services and processes, and is the result of creative thinking, perseverance, ingenuity and
imagination (Baumol 1993, Grigg 1994). It goes hand in hand with creativity. While
creativity involves idea generation, innovation means converting such ideas into fruitful
business activities and a mindset that has a strategic vision (Kuczmarski 1996). According
to Kao (1989), creativity implies a vision of what is possible, and the entrepreneur
translates that creative vision into action.
However, pertinent questions this research is interested in are: what types of activities are
being undertaken by these entrepreneurs; are their activities limited to some particular
industrial sectors; are they just reproducing existing goods and services or imitating
existing practices? This will enable the study to identify the types of industrial sectors
Chinese entrepreneurs operate in Box Hill and also gain deeper insight into the types of
ventures being created, whether entrepreneurial or in imitation of existing practices.
Schumpeter’s perspective is strongly affirmed in the business literature in that the choice of
industry sector and the type of business activity undertaken has a direct effect on potential
growth and success (Bhide 2000, Carter et al. 1997). According to Bhide (2000), business
ventures based on radically innovative ideas that solve big problems have much greater
potential for success, while less innovative ideas serving small niche markets that are easily
imitated have much lower growth potential. Innovative business ventures that are not easily
imitated are more likely to attract growth capital for expansion (Timmons & Bygrave
1997), attract high patronage, create wealth and be successful.
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4.5 Cultural Issues – Unique to Chinese Entrepreneurs
The influence of Confucianism cannot be ignored, since 20 percent of the world’s
population is ethnic Chinese. Confucianism is not a religion, instead it is, an ideology that
underlines and guides Chinese culture. It is a worldview and set of unwritten principles
initiated by Confucius, studied and developed by scholars for more than 2,000 years.
Confucianism has been woven into the very fabric of Chinese society. For hundreds of
years, Confucianism was actively taught. No matter the religion, Confucianism defines the
proper mode of conduct within society and within the family (Nish et al. 1996).
4.5.1 Confucian Piety
Chinese families use stories, sayings and special terms to instil Confucian ideals in
children. Although it is not a religion, it continues to exert a major influence on the
everyday lives of Chinese people (Chan 2008, Jabobs et al. 1995). The basic unit of society
is not the individual, but the family. Family is always more important than any individual
member, and harmony is the most important value for all family members. Without
harmony, no family can stand, neither can a family business. Children are taught to restrain
their individualism to maintain harmony in the family. The Anglo-American culture is the
most individualistic, providing a very good and sharp contrast to the Confucian-influenced
cultures, as it has been illustrated in chapter two.
Research reveals that even in overseas Chinese family businesses, the most important
family values are Confucian (Jacobs et al. 1995, Lee 1996). These Chinese family values
and interpersonal patterns contribute to business development and success in different
cases. The extent of its influences and its incorporation has built a tight matrix between the
culture and the psychological character of the people.
Traditionally, ideologies of the Confucian social philosophy determine the roles and
expectations at every stage in the Chinese life cycle. In the Confucian tradition, certain
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relations between family members are provided a position of paramount importance; in
particular senior members of a family are accorded a wide range of authority with respect
to the juniors. Both parties to a relationship are circumscribed by rules of correct behaviour
which entail rights and responsibilities for each (Bond & Hwang 1986). ‘Xiao’ or filial
piety, which principally defines children’s moral duty to their parents, has been understood
in the Chinese tradition as the root of morality (Weber 1951) Traditionally, through
education and indoctrination, the younger members of the extended Chinese family learn
and accept the responsibility that they will care for, the financial and social wellbeing of the
elderly members in their family. The elderly accepts care as their right and families have
pressure from the wider community to meet their obligations. Such reciprocal relationships
are still considered a distinctive characteristic of Chinese family cultural values (Ryan
2003). Exercising individuality is a threat to an orderly society and therefore directly
contradictory to one’s duties and responsibilities to others (Fouts & Chan 1995)
There is a longstanding literature concerning the philosophy of Confucius (Fung 1948). The
concern here, however, is to highlight its influence in Chinese familial values and social
roles of individuals as they age. According to Chinese philosophy, age transition is
perceived as a series of fixed states which imply social and moral obligations and a pattern
that is to be repeated across the generations. For those who depart from China for a
substantial period of time often find cultural values and gender identities regarding duty for
the aged to be increasingly influenced by the cultural values of the host country. Uhlenberg
and Mueller (2003) explained the significance of any specific family environment may vary
markedly across societies and across time.
Rigby (1990) agreed that Chinese people are taught not to question their parents’ authority
or break rules, for this will bring dishonour to their families (Cobb 1998, Shaffer 2002).
Rogers (1972) adds that the father of the family is the one to whom Chinese younger
generation must listen; as in traditional Chinese families, parents are the authorities while
the father is the chief. This authoritarian parenting style commended as ‘appears’ to work
well ‘in China and among recent Asian immigrant families in the Untied States’. (Shaffer
2002)
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Between the two generations, there is still a strong sense of family ties, with parents’
authority remaining unquestioned and the role of parent remains exceptionally important in
Chinese families wherever they are (Cobb 1998). The decision making process always
depends on mostly one person, who is the head of the family. External and independent
assistance are not usually sought. In fact, the whole management style is a closed circuit
style, of which any decision-making does not go beyond the boundary of the family.
Basically, importance of any opinion initiated depends on the status and hierarchy of the
spoken person. Trust and ‘sense of belonging’ are the two major factors in determining
further working relationship between the family and the person involved.
Another cultural factor, succession of family business, cannot be ignored in the studies of
entrepreneurship. The successors’ process of induction to family business behaviour plays a
crucial role in the succession process (Fletcher 2004, Yan & Sorenson 2006). On the
positive side, it provides family continuity to the business, raises the entrepreneurial
potential of descendants, and reduces the level of conflict among siblings in the succession
process. However, when this process does not fit particular succession requirements, the
negative side of succession in family business commonly appears: sibling rivalry, poor
performance, and business failure (Carney 1988, Yeung 2000).
In summary, based on the above perspectives, the traditional Confucian values of the
Chinese entrepreneurs will be explored to find out whether there is any relationship
between their business success and these values. This leads to the following hypothesis:
H3. Entrepreneurial success of the Chinese is related to traditional Confucian values.
4.5.2 Western Networking Style
In recent decades, the business environment has become more dynamic and complex than
ever before. Rapidly changing and competitive environments reinforce the importance of
business cooperation. Moreover, a business can hardly succeed without their partners’
cooperation. Therefore, firms must build collaborative and long-term relationships with
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their customers and suppliers. Relationship marketing can help attain these goals by
attracting, developing, and retaining customer relationships (Aldrich & Zimmer 1996,
Werbner 2001).
Another important determinant of entrepreneurial success which is of interest to researchers
is support and networks. It has been widely acknowledged that networks form an integral
part of the explanation of entrepreneurial success. Researchers have generally obtained
positive evidence that networking, whatever its form, does have an impact on a business
venture’s survival and success (Backman 1995, Batonda & Perry 2003, Boyer 1996, Chan
2001, Friesen & Ip 1997).
Networking theorists view entrepreneurship as embedded in a complex network of social
relationships. Within these networks, entrepreneurship is facilitated or constrained by
linkages between aspiring entrepreneurs, resources and opportunities (Aldrich & Zimmer
1986). According to this view, the presence of networks (formal or informal), such as
access or membership in associations, plays an increasingly important role in the success of
entrepreneurs.
Networking is understood as one of the key practices contributing to small business
success. Research into the networking practices of entrepreneurs in business and the
significance of networking to small business success has been pursued predominantly by
US and Canadian academic institutions. The findings from these researches primarily based
on developed countries have emphasised the importance of support systems, mentors and
advisors to the successful start-up and operation of entrepreneurial ventures.
Interestingly, past research findings have indicated that entrepreneurs from developed
countries tend to rely more on instrumental networks (Hofstede 1980). These people are
members of professional associations and formal organizations. Relationships are normally
formalized among organizational members as they interact and are connected with mentors
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and business colleagues who have lived through the entrepreneurial process themselves and
are willing to share the experiences they have accumulated. Thus, in the advanced
economies and more individualistic societies, networks as linkages are used instrumentally
and mainly in resource generation (Aldrich & Zimmer 1986, Carney 1998). This western
networking style is different from the Chinese networking style in the following section.
4.5.3 Eastern Networking Styles – Guanxi connections
The Chinese have been sometimes been called ‘born traders’ and the business culture is a
key feature, prioritising the strengthening of the organization before competing
successfully, with the outside world. Trust amongst businesses is built on the foundation of
undertakings, loyalty and commitment and is a culture distinguishable from other ethnic
groups. Recent studies of the Chinese business environment show differences between
Chinese business culture and other cultures (Child & Tse 2001, Tjosvold et al. 2005). In
particular, guanxi, as a form of personal connection that has ‘strong implications for
interpersonal and inter-organizational dynamics’ (Park & Luo 2001), implies strong
strategic potential for doing business in China (Fu et al. 2006, Tsang 1998). Guanxi
networks, woven by individual guanxi, have become pervasive in business and social
practices. In the last two decades, guanxi networks have been given increasing attention by
both business practitioners and academics within the agenda of China’s economic reform
(Guthrie 1998, Millington et al. 2006).
The practices of guanxi can be traced back to Confucianism, which advocates social
harmony and emphasizes the importance of interpersonal relationships (King 1991).
Conforming to Confucian ideology, the social norms of mianzi (face) and renqing (human
feelings) also regulate the way Chinese individuals utilize guanxi. These social norms bring
intricacies into guanxi practices in three ways: by making personal connection special in its
guanxi base, by making it transferable in social networks, and involving long-term
obligations and behaviours (Hwang 1987, Yang 2002). Chinese people traditionally use the
words xin (trust) and qing (affection) to evaluate the quality of guanxi. The subjective
judgment of the quality of a focal relationship shapes the dynamics of individual guanxi
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network development and utilisation. Guanxi is constantly changing, and the activities
associated with it also therefore need to change. A close guanxi may provide more
confidence for guanxi partners to utilise it for both expressive (affection and trust) and
instrumental (business) purposes (Chen & Chen 2004).
In this scenario, the powerful culture of kinship and connection (guanxi) becomes the
matrix of Chinese community. This is a network scenario. This is not a network formed
around township and village enterprises, but a network of networks whose nodes and
threads are families, clans, village, and language groupings. These are perhaps large
familial (and faux-familial), non-geographic power structures twined, wound,
interconnected, woven through thousands of enterprises across mainland China, throughout
the area of southeast Asian states, and reaching into the United States, Europe and other
western countries.
Even today in China, the political slogan ‘one family member joins the army, the whole
family shares the glory’ illustrates the importance of family value among all members.
Networking has been highlighted in Chinese entrepreneurship literature as a very important
tool for any venture creation and management. In further support of this view, Coughlin
(2002) suggested strongly that networking is a very effective method for entrepreneurs to
get assistance in developing their business plans and engaging in fruitful entrepreneurial
ventures. Chinese rely a lot on their immediate family members, relatives and close family
friends to help them to set up the businesses.
In general, the Chinese place high importance on person-to-person relationships. It is said
that having a good relationship network in China is the single most important factor for
business success as they prefer ‘relationships first, business later’ (Burns 1998). In this
way, the Chinese have a highly structured style of negotiation that goes well beyond the
usual western practices (De Mente 1994). These guanxi-based affiliations cut the cost and
time involved in transactions. Another element of this person-to-person relationship is the
sense of social prestige. One cannot understand Chinese behaviour without understanding
of the concept and role of this subjective feeling. An intangible respect exists in the family,
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language group, neighbourhood, business circles and in society. Known as the ‘face’ of a
person, this can be of overriding importance in the society that bestows it and it is a grave
matter if this standing is lost as this will destroy all an individual’s personal and business
relationships and future engagements (De Mente 1994).
Recent efforts in management related guanxi research has demonstrated that the dynamics
of guanxi in the business context is affected by the attributes of organization and job
incumbents (Gold et al. 2000, Luo 2000). These studies have conveyed findings that the
application and operation of guanxi network varies according to the attributes of
organization (i.e. ownership structure, regional location, industrial affiliation,
administrative hierarchy, size, history and resources) and job incumbents (i.e. educational
level, age, tenure, industrial experience, managerial experience). Additional findings from
Hutchings and Murray (2003) have also supplemented that the attributes of organizations
and individuals are intensively related to the command of the guanxi process, which
subsequently affects the dynamics of guanxi.
Similarly, role models are normally trusted counsellors who share their business
knowledge, skills and experience and, most importantly, serve as respected role models for
would-be entrepreneurs and budding entrepreneurs. In the Chinese entrepreneurship
context, role models are best described as experienced business owners willing to give back
to their communities by assisting other Chinese ready to start or grow their businesses.
These are usually found through the guanxi networking (Light et al. 1990, King 1991).
Interpersonal relationships that exist in different social levels are influenced by the size of
the enterprises and their ideologies. This contributes to distinctive characteristics to Chinese
family firms. For example, in addition to having low staff dependence, Chinese families
have relatively high levels of flexibility, cooperation and hard work between the family
members. This also displays a sense of strong mutual obligation, and they are overall
family-centred. Some of the interpersonal principles advocated by the family business set-
up are more prevalent and may be the primary support of earlier settlement and enterprise
set-up.
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Traditionally, Chinese are taught to help others in order to enlarge themselves. Their
ideologies were that social and economic activities were not based on competition, but on
the collectivist principles of cooperation, coexistence, and mutual support. An organization
is not viewed as being independent, but an integral part of a larger network of organizations
that survives and succeeds together. Maintaining trusting relationships within the
organizational network is vital. These networks tend to be established among those who are
kin or who have a similar cultural background. These enterprise set-ups also tend to shape
the style of management in overseas Chinese businesses. However, the second generation
entrepreneurs will vary in their adherence to these values. For many families, as they
become integrated into the larger culture and external influences, family and traditional
Confucian ideals may become diluted. This will be investigated in chapter 7.
In summary, networks have been proved as an important prerequisite to the successful
Chinese organization of entrepreneurial activities in any society. The existences of such
institutions are crucial at the various stages of entrepreneurial activities. No matter the form
it takes and the people involved, it is clear that networking is used by Chinese entrepreneurs
as a means to establish their businesses and reputation, acquire resources and develop their
businesses, gain advice and information, and reduce isolation (Light et al. 1990, Park and
Luo 2001). Hence, Chinese entrepreneurs strategically allocate resources to developing and
maintaining networks and view effective networks as a crucial aspect for ensuring the
success of their ventures (Carter 1997, Grant 1991).
4.6 Resources
The previous discussion centred on networks resources; this section mainly focuses on
human and financial resources, as well as their usefulness in relation to business success.
The most popular explanations of why certain ethnic groups exhibit higher levels of
business creation activities than other groups are based on two theoretical approaches;
middleman minority theory and ethnic enclave theory. In both approaches, largely based on
community level studies of immigration and adaptation, discrimination is a dominant factor
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in determining the economic behaviour of the group members. It is exhibited in a denial of
access to majority-controlled paths of economic advancement and results in minority group
members turning to self-employment activities as a means of economic achievement.
Groups analyzed in this manner include those defined by religion (Sombart 1914, Weber
1904,), race (Aldrich & Waldinger 1990, Butler 1991, Butler & Herring 1991) and ethnic
group (Bonacich 1973, Light 1972).
Entrepreneurship research has focused on two main types of resources. These are the
tangible assets individuals bring with them to the entrepreneurial process in the form of
human capital or human resources, and the ability of entrepreneurs to secure tangible
resources from the environment mainly referred to as financial resources or capital, and
equipment.
4.6.1 Human Capital
The entrepreneurship and management literature highlight the fact that human capital is a
crucial factor in enterprise establishment, influencing business success. Resource based
theorists propose that an entrepreneur’s human capital is comprised of management skills
and tacit knowledge (Coleman 1988, Sequeira & Rasheed 2004); previous entrepreneurial
experience (Ronstadt 1988, Selvarajah 2004); and venture resources in the form of
capability assets, strengths and skills (Grant 1991). These types of human capital, among
others, contribute to growth and the success of business ventures. The resource based
theorists argue that all these components of human capital, including insight, creativity,
vision and intelligence, are derived from educational qualifications, previous industry and
entrepreneurial experiences (Carter et al. 1997, Ronstadt 1988). The following subsections
discuss the components of human capital: business skills, educational qualifications,
previous industry and entrepreneurial experiences, and family background experience.
According to Kaye (2002), research into small business indicated that size, informality of
structures and processes, and the personal preferences, values and attitudes of the owner or
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manager impact significantly on the way in which human resource practices are adopted.
Chinese forms of business set-up and management style are unique, from the top Imperial
Dynasty to the bottom ‘family’ block. ‘Family’ exists from small to big organizations. In a
farming family, the farming business always belongs to the head of the family. In a
manufacturing family, such as clothing, all the machineries are made and used within the
house, all family members are used to work for the family (Liang 1987).
The hard-working and conscientious attitude among Chinese is a well-known characteristic.
This hard-working attitude comes from a desire for success as they seek promotion and
positions of authority. Within the management hierarchy, workers share the responsibility
for the benefits and fate of the employer so that the employees’ motivation is developed
through constant learning and working. Nish et al. (1996) described this as the mainstream
Confucian cultural heritage. Family members including spouses, children and other
extended family members are often used as both formal and back-up personnel to support
the business. Family members are always regarded as trustworthy and committed as the
lead person. This cooperative network of family and community is the essence to the
success of the business. The centrality of family based social, economic and human
resources are keys to their economic and social integration in local Australian society.
4.6.2 Financial Capital
The second category of critical resources that influence success is financial resources,
consisting of cash and the money assets of the business (Bygrave 1993). Obtaining the
necessary financing to start and grow a business is generally considered one of the
entrepreneur’s major problems. Cash capital comes from many sources, including personal
savings, banks, government programmes, venture capital funds and business angels. In
Chinese culture, money contribution from family and relatives is common (Hsing 1996, Li
1988).
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The importance of the family and ethnic community as a source of financing and
employment and a customer base and support for ethnic entrepreneurs (Waldinger et al.
1990) cannot be ignored. Finance is typically perceived as the greatest single problem by
ethnic minority entrepreneurs at the start-up stage. In addition, these first generation
entrepreneurs also face major problems of discrimination on the part of finance providers,
with the vast majority of these feeling that ethnic minorities are discriminated against to a
greater or significantly greater extent than are small business owners or managers in
general. Although explicit discrimination is difficult to prove, there does seem to be a need
for actions by banks and other finance providers to counteract actual or perceived
discrimination.
Valdez (2002) suggested that entrepreneurs who accumulate capital or acquired credit from
an economic institution that operate on profit, are presumably more integrated in the
market, and as a result, will enjoy superior entrepreneurial success. These entrepreneurs
who engage in such relationships are already better integrated in the market. Likely, the
second generation entrepreneurs will be superior to their parents in terms of more
integration, less resistance, and better adaptation into the Australian society. Hence, it can
be implied their success of setting up the enterprises will be easier than the parents.
It is widely recognized that while economic mobility through entrepreneurship is difficult
for poor people because of their lack of class resources, entrepreneurship is realizable if
they have ethnic resource to support them (Light & Gold 2000). One of the primary
problems that local Australians encounter is the lack of diversity among the financial
intermediaries. Large banks (the ‘big four’: ANZ, Commonwealth, NAB and Westpac) in
Australia dominate their corporate financial systems. Banks have little incentive to fund
high-risk projects, and it is not surprising to assume that bank debt is structurally unsuited
to the high-risk uncertainties of lending to start-up firms and to projects at the initial stages
of a product life cycle (Prowse 1996). There are not too many other banks that the local
Australians can turn to, as they also adopt the lending principle of the big fours. Hence,
networking and overseas connections of their parents played an important role in setting up
the foundation of the future businesses.
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To share the assets and to provide free-interest loans are not uncommon among the Chinese
communities. The parents will see this as an obligation to share the accumulated profits
with the children. At the same time, they will expect their children to be involved in the
businesses, to live as one whole family and to carry on the businesses as their own
obligation. This is one of the expected ethical standards’ for being in the family. However,
the perceived weakness in the area of finance in particular may assist in explaining the
result in relation to financial planning being a key barrier to the successful operation of
their ventures.
Chinese entrepreneurs seek to structure their sales channels or businesses to be as short as
possible (i.e. to minimize the number of intermediaries between themselves and the end
customer). Minimizing the number of intermediaries will provide control and opportunities
to focus on a few people with whom close relationships can be developed. Furthermore, a
short channel will give the entrepreneur valuable feedback on market dynamics, which will
enable a quick reaction to emerging threats or opportunities (Vanhonacker et al. 2007). The
typical flexibility of entrepreneurial firms will fit well with closeness to the market.
Chinese entrepreneurs prefer to work within close association and proximity so that they
can have a tighter control of the management. This contrasts vastly with the views of the
more exploring entrepreneurs.
In conclusion, previous studies reviewed have supported the resource based perspective that
the two basic categories of resources discussed, human and financial resources are critical
determinants of entrepreneurial success. Human capital, which is derived from education,
previous experiences and managerial skills and is complemented by skills and experiences
learned through the socialization process, represents initial endowments that provide the
basis for acquiring other sorts of resources, such as financial and physical capital, which are
all important elements in the start-up and success of any entrepreneurial venture.
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4.7 Difficulties and Hurdles
In the creation and growth of business ventures, entrepreneurs face a variety of problems,
including; major financial issues, day-to-day operational issues, business and personal
issues. The environment in the host society and its communities impacts directly on
newcomers’ adaptation experience (Kim 1994). The receptivity of the host environment
refers to the degree to which the environment is open to, welcomes, and accepts strangers
into its social communication networks and offers them various from of informational,
technical, material and emotional support.
Cultural shock is also described as the disorientation that comes from being plunged into an
unfamiliar setting (McLaren 1998). In an unfamiliar culture, everything that the newcomer
experience is different and subsequently, they may feel incompetent, confused and anxious.
Other studies (Gudykunst & Kim 1992, Taft 1976) describe the symptoms as fatigue from
constant adaptation to the local culture, angry and irritable as well as a feeling of not being
in control in dealing with the unfamiliar environment. While experiencing culture shock,
people’s self-esteem is often seriously impaired. Immigrants with more distinctive physical
features or characteristics in relation to the people in the dominant host society, such as skin
colour, facial features and accented English, may find it harder to acculturate (Padilla &
Perex 2003). The contributing factors are listed below:
4.7.1 Language
Language is commonly perceived as a core element in the interrelationships between an
ethnic minority and the host group as it provides common means of communication and,
more importantly, represents a mode of identity. The behaviour of language can also be
explained by communal notions of social categorisation, social identity, social comparison,
psychological distinctiveness and cognitive alternatives (Wu 1995).
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Language is at the heart of adjusting to a new country for most migrants. The significance
of language in migrants’ settlement is affirmed by sociologists, economists, linguists, and
teachers and by migrants themselves (Burnett 1998). In Australia, virtually every aspect of
settlement hinges upon migrants having some technical English language ability. English is
not only the official language of the law and government, but is also the primary language
of the economic, social, cultural and educational life of the nation. As Tait et al. (1990)
suggested, the rules of success are written in English.
Finocchiaro (1995) explained that language is much more than just a means of exchange
between the two groups as they are also trying to understand, accept, assimilate, and reject
each other’s values. Thus, language expresses and evokes something deeper in addition to
the preliminary function for expressing thoughts, perceptions, sentiments and values of a
culture; it also represents a fundamental mode of collective social identity. The significance
of language as indicative of authenticity is illustrated by Wu (1995): for some cultural
groups, language is symbolic of their ethnic identity and values and it demarcates the
boundaries of group membership.
Previous research on language and ethnicity has proposed a strong relationship between
language and ethnic identity. Language is socially accepted as an important system of signs
for identifying the uniqueness of any culture which is crucial to cultural reclamation as it is
a sign of systematic codification and management of ethnicity that is typical of modernity
(Chow 1998). There are various resolutions when the language of a migrant group comes
into contact with a different language spoken by the host group. In the initial stage both
languages are retained and become part of the national social life where each language
acquires a well-defined function. The transition progresses to a later stage where the
incoming group loses its language and the host language become dominant gradually. A
number of Canadian studies have also found a decline in language competence of the
mother tongue from first to third generation migrants (Breton et al. 1990, Castonguay 1998,
O’Bryan et al. 1997).
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4.7.2 Education
There is a maxim among Chinese parents that they put all their hope in the next generation
and strongly impress upon the second generation the importance of higher education (Chu
1995), so that they are motivated to become high achievers. This axiom has been planted in
their mindset from generation to generation, stimulating a strong competitive spirit. This
value for higher qualifications has a strong influence on second generation Chinese,
especially when the first generation has a low literacy level (Godement 1999).The general
belief is that by studying hard and achieving academically, the younger generation will
increase their opportunities of gaining wealth and respect, whereas without academic
achievement they will be disregarded in society.
Traditionally, the prime aim of migration is to find a better life for the children. Chinese see
providing good education to the children as one of the most important ‘tasks’. They value
education as a preparation to go onto higher social mobility, and that sufficient education or
training is one of the prerequisite to go into self-sufficiency and self-employment. This
phenomenon corresponds with the findings of Castles et al. (1991). It has been found that
immigrant parents, especially those from Asian countries, no matter what class they come
from, place high emphasis on education as a means of ensuring a better future for their
children (Collins et al. 1995). Thus, the hope was that entrepreneurship supported by ethnic
resources provided a path out of poverty and allowed for the acquisition of higher human
capital for their children.
They motivate their children to study by providing all their needs, talking to them about
their future and emphasizing that education would help them in their future. The parents
also believe that a good education can lead to achieve a university degree that in turn will
lead to have a good job. This will be the ticket to the better life, and that the children do not
have to work as hard as they do. The parents will see this as their access to upward mobility
through education, self employment and professionalization. Throughout the upbringing of
this second generation, education is highly valued by the parents. The sense of security and
the future lay deeply in the obtainment of the higher education, especially in the
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professional areas such as medicine, dentistry, engineering, law and other subjects that
required higher university entry scores.
Viviani (1996) found that children of ethnic origin (i.e. children of non-English-speaking
background migrants) are staying on at school longer and doing better than students of
Australian-born parents, and that the children of migrant manual workers are moving into
white-collar jobs. This is in contrast to the children of Australian blue-collar workers who
are not doing well at school. Dobson & Birrell (2005) found that Australian-born students
are lagging in the competition (based on University entry scores) to enter the top health
professions, with those from Asian backgrounds now significantly represent in university
places.
In 2004, almost a third of local students in medicine were born overseas, mainly in Asia. In
optometry, more than two out of five domestic students were overseas-born. In dentistry,
more than half the local students were born outside Australia. By contrast, in the overall
population fewer than one in five Australians aged 15–24 were born overseas. The report
attributed the success of children from migrant families to parental ambition and the
willingness of families to invest heavily to ensure their children could compete for scarce
and prestigious places at university Dobson & Birrell (2005).
It has been found that immigrant parents, especially those from Asian countries, no matter
what class they come from, place high emphasis on education as a means of ensuring a
better future for their children (Collins et al. 1995). Thus, the hope was that
entrepreneurship supported by ethnic resources provided a path out of poverty and allowed
for the acquisition of higher human capital for their children.
The skills and capabilities derived from education are broad ranging, from functional
expertise in marketing, accounting, sales or productions, to abilities to spot market trends,
and learning to deal with people and generate ideas to provide competitive advantage and
underpin enterprise performance (Peteraf 1993). Kim et al. (2003) explained that the
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influence of formal education on the decision to become an entrepreneur can be viewed
along two dimensions, namely acquisition of skills and credentialling. They explain further
that general business skills as well as industry specific skills might help entrepreneurs avoid
common mistakes and guide them in setting up basic business functions. Also, formal
education as credentials can provide access into social networks or serve as an indicator in
an evaluation for resources.
4.7.3 Religion
Religion has never played an important role in Chinese history, in either political or
familial level (Chan 2008, Cheng 1997). Christianity and Buddhism are the two major
religions that have been imported into China (ABS 2006b). However, Religious teachings
are not important in the business circles. Instead, they are on average are seen as being
superstitious. There has been no religious movement comparable to Christianity in Europe.
Order and harmony are cosmic principles that give shape to natural laws of which the
Mandate of Heaven is one. Anything that can enhance the prosperity or fortunes of one-self
or the family is preferred. Most of the early settlers and first generation entrepreneurs do
not have any confirmed religion.
The terms spirituality and religion are sometimes used in an interchangeable way, and there
is a close relationship between the two (Engebretson 2004, Slater et al. 2001). Yet,
spirituality is not equal to religion (Ratcliff 2001). While religion refers to a system of
belief, attitudes and practices (Koester 2006), spirituality is concerned with the experience
of a personal relationship with his or her God, which can be experienced in real life
situations or through religious practices (Engebretson 2004). In short, the relationship
between spirituality and religion is that spirituality is the living core of religion.
As Collins (1999) claimed, styles of spirituality are influenced by worldviews in which
they are first formulated. In this research, the influences of Chinese culture and
contemporary western culture, both of which produce different worldviews respectively,
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account for the Buddhism and Daoism spirituality and religion of the first generation while
the second generation in Australia are exposed to Christianity and conversions is common.
4.7.4 Adaptation
Adaptation has always been a subject of sustained empirical and theoretical attention, and
immigrant entrepreneurship has become part of the classic agenda (Light & Gold 2000,
Waldinger et al. 1999). These entrepreneurial activities have been interpreted first in terms
of immigrants’ ethnicization, then adaptation, and most recently, transnationalism
depending on the currently dominant discourse on their adaptation to their new
environments. Conceptualized in the ethnicization and adaptation theoretical frameworks,
immigrants’ entrepreneurial activities has been viewed as conducive to their integration,
whether immigration studies denote sustained regular economic, political, social, or cultural
cross-border involvements of immigrants and their children that escape the boundaries of
the nation-state.
Several factors influence the integration of immigrants into the host society (Morawska
2004). They include:
• Economic and socio-cultural resources;
• Location of the host country where they reside; and
• Home country they originate from.
Some aspects of adaptation into the host society will certainly enhance the survival and
development of the enterprises whether they are carried out by the first or second
generation entrepreneurs.
A study in the US, by Morawska (2004), showed the importance of these ‘bridge-builders’.
Not only do they contribute economically, these entrepreneurs have been engaged in the
civic-political forums as American Chinese citizens. Thus, several advocacy groups,
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including prominent Hong Kong and Taiwanese immigrant ‘globalist’, have been formed
during the 1990s, most with offices in Washington DC, to advance political and ethnic-
cultural interests of Asian Americans.
Research on immigrants has yielded insights into the problems of adaptation, issues on
ethnic discrimination from the host society, racism and issues relating to identity
management and cultural change (Eriksen 2002). Eriksen asserted that groups who look
different from dominant groups may be less liable to become assimilated into the majority
than others, even if they wish to, for it can be difficult for them to escape from their ethnic
identity. In this case, as well as in the case where minority groups have an inadequate
command of the dominant language, their ethnic identity becomes an important and
distinctive status and an ascribed aspect of their person hold. For migrants, even though the
speed of social and cultural change varies from person to person and for some the change
occurs quickly, people tend to retain their ethnic identity despite having moved to a new
environment (Eriksen 2002).
4.7.5 Previous Work Experience
According to the resource based perspectives, apart from education, human capital is
derived from work experience. Research has shown a robust positive relationship between
prior work experience in the same industry or line of business and venture success (Carter
et al. 1997, Cooper et al. 1994). Highlighting the importance of previous work experience,
Kim et al. (2003) explained that if the work experience occurs within the industry in which
the new business venture is located, individual entrepreneurs will gain opportunities to
understand industry-specific market forces and identify potential market opportunities to
exploit. Furthermore, work experience increases opportunities for individuals to obtain
positions within various social networks that can be tapped into for market information,
access to capital, hiring employees, and developing supplier and customer relationships.
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These overseas entrepreneurs, however experienced they may be in their own professional
fields, may also experience difficulties (Boyer 1996, Tseng 1992), such as:
• Inadequate cultural awareness skills of some mainstream bodies;
• Conservative view that these immigrants were too difficult to assist;
• Lack of familiarity of these immigrants with the Australian business environment,
taxation and legal requirements; and
• Administrative inflexibility in terms of inadequate recognition of overseas
qualifications and skills.
Previous studies (Brush et al. 2006, Coughlin 2002, Fielden & Davidson 2005) have
suggested that employment and experience in the same industry as the business venture is a
clear advantage in the entrepreneurial process and are associated with business growth.
Questions are asked in relation to previous industries the respondents have worked in, their
levels of satisfaction, and the barriers to progress encountered in their former employment.
However, most Chinese are not prepared for all the regulations and bureaucracy when they
arrive in Australia. Usually, the most difficult barriers are languages and their presumed
‘freedom’ to exert their influences by bargaining with the independent regulatory bodies.
Broader restriction and limitation are placed on the work and professions that they desire.
This presents the immigrants no choice but to seek upward mobility through setting up their
own specialty within their own ethnic community.
Baker and Wooden (1992) found that 70 percent of migrants with qualifications obtained
overseas did not use their qualifications in their current job, and concluded that non-
recognition of qualifications might have been partly responsible for the relatively high rates
of ‘invisible underemployment’ within some migrant groups. Chapman and Iredale (1990)
found that only 39 percent of formally skilled migrants subjected their overseas
qualifications to official assessment, and of these, only 42 percent had the qualifications
recognised as being equivalent to Australian qualifications. However, they also found that
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those who had their qualifications recognised did not subsequently earn more than those
who did not.
On the other hand, previous work experience of the entrepreneurs has been suggested as
one of the most important influences of new business success (Cooper 1981). An
explanation is offered by Vesper (1980) arguing that start-up experience acts as a proxy for
skills and competencies as well as enabling the building of network contacts, business
reputation and track record among others, hence experience in organization building seem
to be more successful and efficient in the start up of subsequent ventures.
Experience is an important component of an entrepreneur’s human capital and
consequently influences their cognitive behaviour that in turn influences how they engage
in the entrepreneurial process. While experience is generally considered an asset having
built up networks as well as managerial and other competencies, Starr and Bygrave (1991)
argue that this could also be a liability. This may occur with overconfidence such as when
the entrepreneur is reluctant to change from a past successful strategy even if the conditions
have changed. This is referred to as the liability of ‘sameness’ (Starr & Bygrave 1991) and
this can result to the individual failing to recognize blind spots.
Previous work experiences are described as formative by Goss (1991) and may encourage
entrepreneurial behaviour. The skills gained through formative experience may be
managerial, financial, attitudinal or a combination of these, and may build business
competence – highlighting opportunities for the individual. Katz (1992) argued especially
that the family firm should shape children’s career plans. The typical entrepreneur indeed
has a self-employed parent, though not all entrepreneurial offspring choose self-
employment. Parental impact may lie in the transfer of human capital related to starting or
running a business (Lentz & Laband 1990), these finding are also supported by Carroll and
Mosakowski (1987). Another way of learning is through the observation of behaviour in
others, referred to as role models (Bandura 1986). Thus even limited experience with
entrepreneurial activity can substantially influence how one thinks about entrepreneurship
(Scherer et al. 1990). Curran and Burrows (1988) research in the UK found that 50 percent
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of small business owners have come from a family background of self-employment,
compared with 20 percent for all employees. Therefore, based on the resource based
theorists findings that industry-related experience is one of the most important factors for
successful entrepreneurial ventures, it is inferred that the previous work experience of
Chinese entrepreneurs plays a key role in their success.
In summary, the study’s fourth hypothesis rests on the premise that Chinese entrepreneurs
face a lot of barriers in their entrepreneurial endeavours that impede their progress. These
include language barrier, education levels, business skills and knowledge, previous work
experiences, access to human and financial capitals, and regulatory environments. This
leads to the following hypothesis:
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs.
4.8 Business Skills and Capabilities
There is recognition in the entrepreneurship and management literature of the significant
contribution of business skills and capabilities to business success. Begley and Boyd (1986)
found that although all entrepreneurs start with a set of unique entrepreneurial traits,
business skills and capabilities are essential elements of business creation and success.
Business skills, particularly production and marketing skills, strong idea generation and
dealing with people, are found to be related to business performance and success by Lerner
et al. (1997).
Immigrant enterprise development depends on being the ‘middleman minority’, which is
based on the opportunity structure and operating environment in the host country. The set-
up and the running of the businesses has been gradually changed in such ways that external
assistance and help are sought to deal with larger issues and problems. This is due to the
increase in the complexities and the sizes that the organizations have developed into. The
process of organizational growth advocated by Van de Ven and Poole (1995) is central to
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this study. These phases may be the result of search for new opportunities, or because of
internal crises, or in response to changes in the industry structure over the life cycle of a
product, or in response to the changing nature of problems confronting the organization
(Beverland 2000).
Chandler (1962) identified a four-stage model or organizational evolution, starting with
expansion of volume, moving to geographical dispersion and vertical integration, and
ending with product diversification, where each new strategy created new administrative
needs. Greiner (1972) suggested a five-stage model, starting with creativity and progressing
through direction, delegation, coordination and collaboration. Miller and Friesen (1983)
outlined a corporate life cycle of birth, growth, maturity and revival or decline, during any
of which, organizations could experience success or failure. Success depends on how well
the organization balanced innovation and conservatism, and failure tends to fluctuate
between high levels of innovation and excessive stagnation.
4.8.1 Bureaucracy and Regulation
Administrative and regulatory burdens affect all new and small enterprises and can be one
of the factors encouraging entrepreneurs to engage in informal sector activity as a means of
avoiding their influence. Whilst less of an issue than finance, there is a need for support
organizations operating in areas where there are significant numbers of ethnic minorities to
make administrative and legislative requirements available in appropriate languages and to
provide assistance to ethnic minority entrepreneurs who have difficulties in responding to
them (Boyer 1996, Li 1988, Teixeira 1998, Tseng 1992).
Unlikely in western countries, the Chinese judicial systems have always been dependent on
both state and local governments at the time. These judicial systems are different at
different times, depending on the dynasties. However different these laws may be, the head
of the family will be more important and influential than that of the government
representatives. The role of the judicial system is different from those practiced in the
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western societies. In the western societies, one will argue constantly about what legal and
political systems are the right ones, how the details of these systems should be organized
and implemented, and what rights and protections one will have. The assumption behind
the whole discussion is that there is a system: a legal and philosophical framework, fairly
clearly delineated, within which everyone can work.
In China, personal rule – the emperor was the model; the whole discussion was not about
the system, but about the legitimacy of the government, the ‘mandate of heaven’. That
mandate was judged by the physical well-being of the people. If the people had enough to
eat and were not dying from invasions or natural disasters, then heaven must be happy with
the rulers. If the people were suffering, for whatever reason – war, earthquakes, famine,
venal officials – then heaven had withdrawn its mandate, and before long the government
would fall.
Throughout the whole Chinese history, regulatory bodies of any kind of professions,
industries and developments did not exist. The skills acquired by different professions
were, in fact, similar to the Australian apprenticeship system. A layman was not required
by anyone or any department to get any registration, whether to open a restaurant, to build a
house or to become a doctor (herbal medicine). It was simply because such department or
regulatory body did not exist, regulatory system was non-existent. The regulatory
enforcement began and became more mandatory only since China opened its doors thirty
years ago (Liang 1987).
According to many Chinese, China has no need for a system. If the ancient values alone
will not serve, there is always guanxi, the intricate web of connection built of family,
village, friends, and language group (Chen & Chen 2004, Park & Luo 2001). For western
investors, the lack of strong, unambiguous contract law and reasonably incorruptible (or at
least high-priced) courts may be the largest single barrier to entering the Chinese economy,
and vice versa (Chu 1995).
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Another area of business development for immigrant entrepreneurs relates to the issue of
band regulations at all levels of government (federal, state and local governments) and
other regulatory bodies. In the past, there are a lot of hurdles, administrative burden and
compliance costs of regulation and governance. Collins (2003) suggested a name – ‘red
tape’. Business enterprises required to respond to a range of government administrative,
regulatory and reporting requirements. Compliance costs had been estimated to amount to
as much as one-third (32 percent) of the profits of small businesses in Australia (OECD
1998b). The entrepreneurs have to work their ways around the bureaucratic maze of
legislation, red tape and policy developments that impacted on their businesses. The
inefficiency and incapability to reduce the maze of administration work deter both the
potential and existing entrepreneurs to extend or expand their businesses further.
4.8.2 Prior Exposure to Entrepreneurship
Apart from the resource based theorists’ views on the human capital available to an
entrepreneur, social learning theory offers a complementary perspective which proposes
that entrepreneurs can acquire crucial business knowledge and skills from family members
and friends, especially in Chinese culture. The social learning perspective advocates that
the individual’s socialization process, which occurs in the family setting, transforms norms,
aspirations and career preferences through observational learning and modelling (Bandura
1977). While the most influential role models are family members, the prevalence and
visibility of successful examples can be helpful to entrepreneurs.
For instance, researchers have speculated that self-employed parents might encourage the
development of entrepreneurial attitudes in their children through socialization. Parents
may somehow be instilling a learned preference for self-employment in their children,
possibly by providing work experiences at a young age, or through exposing their children
to the entrepreneurial lifestyle and the social networks tied to their businesses (Carroll and
Mosakowski 1987). The socialization process exposure to entrepreneurial skills may
include not only someone’s parents but also other relatives, as well as friends. Other family
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within the same generation (siblings and cousins) can influence an individual’s beliefs
about entrepreneurship, as well as provide role models and practical knowledge. Lentz and
Laband (1990) viewed this informal training and experience as a separate component of
human capital that might increase someone’s interest in the start-up of an entrepreneurial
venture and also improve the chance of success.
In summary, prior knowledge (may not be in the same fields that the immigrants are
experienced in) influences the way entrepreneurs comprehend, extrapolate, interpret and
apply new information in ways that those lacking it cannot duplicate (Roberts 1991). It
helps entrepreneurs appreciate the value of new information. It influences individuals’
willingness and ability to make new connections among pre-existing ideas, as well as with
new ideas, hence allowing them to recognise opportunities.
This finding also coincides with earlier studies in literature, which emphasize that
entrepreneurs are four times more likely to have been subject to the influences of an
entrepreneurial parent. This view also points out the fact that people’s personalities and
skills are partially the result of their genetic make-up, and partially the result of their
environment, that is, their upbringing (Bandura 1977, Hisrich & Brush 1985). Engebretson
(2004) suggested that family, friends and community are the major influences in the
development of young peoples, whose tasks concern the relationship with family, with
peers, and with other people, while becoming a member of the community.
4.8.3 Standard of Success
In this study, success is explored in relation to how researchers have endeavoured to
measure business success, and as to how the Chinese entrepreneurs’ view their success.
Traditional economics and entrepreneurship theories interpret the success of a business
based on its financial performance and profitability (Djik 1996). Traditionally, most
analyses take for granted a definition of success and failure of any entrepreneurship by
looking at different financial, quantitative measures such as income, size of firm, and the
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number of employed people as the achievement. Business success is determined by
financial indicators including the growth rates, business size, turnover, profitability and the
number of people employed. However, more recently there is a growing argument that,
because business and entrepreneurs are not homogeneous, definitions of success need to
include non-financial yardsticks.
Werbner (1999) defined ‘success’, rather than being an individual achievement, is often
defined collectively – as the establishment and reproduction of a new value regime and its
association with a particular ‘place’ or ‘community’. It is a strong desire commonly shared
by Chinese to be prosperous, and they are highly motivated towards the accumulation of
wealth. A former Chairman of China (Deng Xiao Ping) commented, ‘To get rich is
glorious’. It is a Chinese traditional value to judge people’s wealth and power by assessing
the value of their land and property (Fouts & Chan 1995). Because of this motive, the
principle that ‘money can buy everything’ can become a common official and unofficial
means of getting through procedures and systems. This ‘back door’ channel, also called the
‘Chinese way’, refers to the unofficial economy similar to the black market where one can
get things done that are not available or not possible in the official economy (De Mente
1994). Therefore, the traditional way of measuring success by profitability may not be
adequate.
It shows that there is a relatively different standard of ‘successes in another country of
cultural and social value. In the Sydney survey of Collins et al. (1995), it is reported that
their surveyed businesses are profitable. Also, two out of every three Chinese entrepreneurs
in the national survey have established new business rather than taken over an existing one.
However, in Chinese businesses, there is always possibility of inaccuracy due to different
measuring standards. There are always hidden cash money, distorted taxation and
accounting methods to minimum the taxable incomes. Consequently, there are other
businesses that may be incorrectly ‘classified’ as unsuccessful business. Therefore, money
cannot be the only quality to be used as the criterion.
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4.8.4 Overseas Expansionary Vision
Stromback and Malhotra (1994) highlighted the entrepreneurial advantages of Asian
(mainly Chinese) immigrants because of their ‘cultural baggage’ and motivation. They
emphasized the importance of these overseas networks of ethnic entrepreneurs in Australia.
The links with relatives or friends in the country of origin are often used to provide a
reliable source of supply, access to a marker, advice about market prospects and to secure
credit. Similarly, Lever-Tracey et al. (1991) concluded that Chinese entrepreneurs are on
the whole successful, innovative and export orientated entrepreneurs who have
considerable overseas resources, including financial resources and business networks.
These networks provide an advantage when establishing import/export activities because
they provide personalized and trust-based networks which extended into the community
and beyond, into mainstream society and overseas.
The role of links to the country of origin and networking can be further explored in the
context of internationalisation of these businesses. There are issues of how much
dependency on the links to the country of origin and ethnic resources for business is good
for the ethnic business. Ethnic business owners need to consider whether they should make
themselves stronger in their host country rather than continue to depend on their resources
back home. They also need to decide whether to concentrate on domestic investments
rather than on international dealings (Chavan 2002). This expansionary vision increases the
potential for the business to succeed, and it leads to the fifth hypothesis:
H5. Entrepreneurial success is related to overseas expansionary vision of the entrepreneurs.
4.9 Summary
In summary, there has been quite extensive research focused on the key elements of
successful Chinese entrepreneurs. The literature in relation to entrepreneurship generally
has shed light on many of the variables in question. Previous studies about first generation
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entrepreneurs include a number of problems that they encounter at start-up and growth.
Amongst these problems, the lack of access to finance is widely covered in the
entrepreneurship literature. Other problems highlighted in Chinese entrepreneurship
literature include the lack of managerial, business and technical skills, local know-how,
local customs and culture, and lack of access to business networks, and combining
language and recognition of qualification with the management of their ventures (Chan
2001, Ip et al. 1988, Collins 1996).
In addition, the uniqueness of Chinese characteristics has been shown and compared to that
of the western entrepreneurs. These concepts of entrepreneurship are further explained and
enhanced in this thesis by an understanding of common personality traits of entrepreneurs,
their motivations for business ownership, and the critical resources needed for the
entrepreneurial process.
The next chapter is the methodology research strategy chapter. It will describe the selection
of the respondents the survey instrument, analysis techniques and the research paradigm
employed.
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Chapter 5
Research Design and Methodology
5.1 Introduction
This chapter discusses the philosophical paradigm employed in this research and the choice
of research methodology. The methodology also explains the data collection and analysis.
An overview of research paradigms will be presented in this chapter, including the one used
in the thesis and the research strategies used to collect data for the study. The research
population and the sampling technique applied will be explained, as well as the instruments
and procedures of data collection. Finally, the data analysis methods employed in the study
are presented.
5.2 Objective, Research Questions, Hypotheses of the Study
As stated in chapter 1, the research objective is to investigate the first and second
generation Chinese entrepreneurship in Box Hill. In other words, this study aims to add to
our understanding of Chinese entrepreneurs by shedding light on the dimensions explored
in this research. In order to meet the above objective, five dimensions of Chinese
entrepreneurs were identified for investigation based on past studies, namely; (1)
background of the entrepreneurs, (2) motivations of the entrepreneurs, (3) traditional
Confucian values of the entrepreneurs, (4) the difficulties and hurdles encountered by the
entrepreneurs, and (5) the overseas expansionary vision of the Chinese entrepreneurs.
Drawing upon these five dimensions of Chinese entrepreneurs, five research questions are
posed:
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• Research Question 1: What are the background factors contributing to the success of the
entrepreneurs?
• Research Question 2: What are the motivation factors that contribute to the success of
the entrepreneurs?
• Research Question 3: What are the traditional Confucian values that contribute to the
success of the entrepreneurs?
• Research Question 4: How do the difficulties and hurdles encountered during the
entrepreneurial process contribute to the success of the entrepreneurs?
• Research Question 5: How does overseas expansionary vision contribute to the growth
of entrepreneurial venture?
To gain a deeper insight into Chinese entrepreneurship in Box Hill, five hypotheses were
formulated based on the literature and arising out of the research questions and the
theoretical framework of the study:
H1. The background of the entrepreneurs is related to the success of their businesses.
H2. Entrepreneurial success is related to the motivation of the entrepreneurs. H3. Entrepreneurial success of the Chinese is related to traditional Confucian values.
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs.
H5. Entrepreneurial success is related to the overseas expansionary vision of the
entrepreneurs.
The testing of these hypotheses contributes to the achievement of the objective of the study
by helping to answer the research questions and find empirical support for the theories
adopted for the study.
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5.3 Important Research Characteristics of the Study
Based on the research objectives, questions and hypotheses, this study has the following
key research characteristics: descriptive and correlative.
Descriptive study – the major aim of a descriptive study according to Kumar (2005) is to
describe and provide information on what is prevalent regarding a group of people, a
community, a phenomenon or a situation. This study embarks on the research mission of
using quantitative methods to investigate a number of diverse variables (background,
motivation, traditional Confucian values, difficulties and hurdles, and overseas
expansionary vision) to describe the demographics of these Chinese entrepreneurs. This
study also uses renowned theoretical perspectives to derive the research variables and the
hypotheses of the study. It can therefore be argued that this study starts as a descriptive
study and that the research constructs in a descriptive study must be supported by
established theory (Hussey and Hussey 1997).
2. Correlation study – the strength of the relationships of the variables is described and
explored from the testing of the hypotheses of the study (Bryman 2004). This characteristic
of the study shows that it is a correlation study. Kumar (2005) emphasized that in
correlation studies relationships or associations between two variables are ascertained.
The independent and the dependent variables are derived from the five dimensions of
Chinese entrepreneurs identified for investigation. The independent variables are
background, motivation, traditional Confucian values, difficulties and hurdles, and overseas
expansionary vision. The dependent variable is the Chinese entrepreneurs’ successes. This
study concentrates on determining the strength of the relationships between the independent
and the dependent variables. This is helpful in finding empirical support for the various
theoretical perspectives adopted in the study and providing a better understanding of the
Chinese entrepreneurs.
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Research on immigration has frequently been divided between qualitative studies based on
small, often unrepresentative samples, whose findings are rich in detail but relate only to a
specific group of people; and quantitative studies based on large, representative samples
which can demonstrate broad-scale trends but cannot explain how social life is experienced
by people (Statham 1998). However, due to nature of the interview and the relationship
between the interviewer and informants (Neuman 2000), it is possible that the influence of
the researcher may have led to deviation from the ‘true’ response elicited and recorded by
the interviewer. In fact, the author knew a few of the subjects through previous business
dealings and contacts. Therefore, to avoid the possible bias, this research is based on
quantitative data collection and analysis only.
For comparison, the respondents have been separated into two groups in the analysis, one
being first generation and the other being second generation. Hence, all the results in Part 1
and Part 2 of the questionnaire can be further analysed and grouped under first generation
and second generation (Chapter 7).
In summary, the descriptive and correlation methods in this quantitative research
incorporate tools for measuring relationships between variables by linking them to
deductive or integrated theory (Kumar 2005). This paradigm is typified by data collection
methods using quantitative techniques such as surveys and statistics. The paradigm aims at
exact measures, objective research and hypotheses testing by carefully analysing numbers
from the measures.
5.4 Philosophical Research Paradigms of the Study
There are two common approaches to organizational research: positivist and interpretive.
Positivist approach refers to procedures such as those associated with inferential statistics,
hypothesis testing, mathematical analysis and experimental and quasi-experimental design.
Interpretive approach refers to procedures such as those associated with ethnography,
phenomenology and case studies (Lee 1991). Since a philosophical paradigm influences the
choice of research methodology or research enquiry strategy, there is the need to identify in
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which philosophical research paradigm this study is situated. A brief overview will be
presented on research paradigms with their associated research methods; then the paradigm
used in this study will be presented.
The organizational literature has thoroughly covered what differentiates the two
approaches. In their review of the literature, Morey and Luthans (1984) observe that
organizational researchers have described the differences between the two approaches in
the following ways: objective versus subjective (Burrell and Morgan 1979); quantitative
versus qualitative (Van Maanen 1979).
5.4.1 Positivist Paradigm
The positivist paradigm is derived from the natural sciences and treats research as the
independent observation of events occurring within a system. It is founded on the belief
that the study of human behaviour should be conducted in the same ways as studies in
natural sciences and is based on assumptions that social reality is independent of us and
exists regardless of whether we are aware of it.
This paradigm is associated with a quantitative research method that typically incorporates
tools to measure numbers indicating cause-and-effect relationships. Its explanation consists
of establishing causal relationships between variables by establishing causal laws and
linking them to deductive or integrated theory. The positivistic paradigm is typified by data
collection methods using quantitative techniques such as experiments, surveys, and
statistics. These methods seek facts or causes of social phenomena. The paradigm aims at
rigorous, exact measures and objective research, and tests hypotheses by carefully
analysing numbers from the measures (Kumar 2005). These methods and techniques tend
to specialize in quantities in the sense that numbers come to represent values and levels of
theoretical constructs and concepts, and the interpretation of the numbers is viewed as
strong scientific evidence of how a phenomenon works (Starub et al. 2004).
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5.4.2 Interpretive Paradigm
Interpretive studies assume that people create and associate their own subjective and inter-
subjective meanings as they interact with the world around them. Interpretive researchers
thus attempt to understand phenomena through accessing the meaning participants assign to
them (Orlikowski and Baroudi 1991). These methods of research start from the position
that the knowledge of reality is a social construction by human actors and that this applies
equally to researchers. There is no objective reality which can be discovered by researchers
and replicated by others, in contrast to the assumptions of positivist science (Walsham
1995).
This approach adopts a different framework of analysis. It attempts to understand
subjective human behaviour by focusing on meaning rather than measurement. It is
therefore based on hunches, experience and intuition as the means of investigating research
problems. These methods seek to describe, translate and come to terms with meaning
(Neuman 2000).
5.4.3 Applicable Paradigm of this Study
A critical analysis of the key characteristics of this study indicates that it falls within the
framework of the positivist research paradigm only. Descriptive and correlation studies are
essentially within this philosophical framework. This study to an extent makes an effort to
adhere to the principle of positivism by collecting quantitative data by surveys and by
analysing data using statistical techniques. Also, the hypotheses of the study will be tested
and empirical support will be found for theoretical perspectives without any bias.
The exploratory nature of the interpretive approach requires qualitative date collection and
analysis. Personal interviews are required to collect further details. Unfortunately, the
author works in Box Hill, and the retail establishments and personal contacts extend over a
period of twenty-six years in the area. Therefore, the author is a well-known figure in Box
Hill. While conducting interviews would not be difficult, it would involve some issues:
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• Respondents may be reluctant to give detailed and personal views since they know
the author fairly well and may be embarrassed.
• Respondents may be concerned that the information may be sensitive and that the
author should not know about it.
• The interviews would not be anonymous, and therefore true information might not
be given by the respondents.
• There may be bias by the respondents in making up untrue responses about any
phenomenon.
Although this phenomenological paradigm (as an interpretive research approach),
according to Neuman (2000), is useful in gaining meaningful insight into social action in its
real-life context, the data collected by interview is not appropriate and practical in this
study. Since entrepreneurship is social action, to capture and discover an understanding of
Chinese entrepreneurs in their real life context will be difficult. Consequently, the
interpretive research within the phenomenological research paradigm will not be carried out
in this study.
5.4.4 Pragmatic Paradigm
Pragmatism is to position mixed methods research as a complement to traditional
qualitative and quantitative research. This provides a framework for designing and
conducting mixed methods research (Johnson 2004). This philosophy underlying
pragmatism includes induction or the discovery of patterns (associated with qualitative
techniques); deduction, which involves the testing of hypotheses and theories (associated
with quantitative techniques); and abduction, which is uncovering and relying on the best of
a set of explanations for understanding one’s result. Pragmatism therefore legitimatizes the
use of multiple methods in answering research questions, rather than restricting or
constraining researchers’ choice. It rejects dogmatism and is an expansive and creative
form of research. What is most fundamental is the research problem. Also, individual
researchers have a freedom of choice. They are free to choose the methods, techniques, and
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procedures of research that best meet their needs and purposes. Pragmatists do not see the
world as an absolute unity. In a similar way, mixed methods researchers look to many
approaches for collecting and analysing data rather than subscribing to only one way, for
instance, qualitative or quantitative.
5.4.5 Mixed Methods Research Approach
The mixed methods research approach is a type of research where both qualitative and
quantitative research techniques are combined with their associated methods, approaches,
languages or concept in a single study (Creswell 2003). Creswell et al. (2007) described
mixed methods research as a research design with philosophical assumptions as well as
methods of inquiry, with its central premise being that the use of quantitative and
qualitative approaches in combination provides a better understanding of research problems
than either approach alone. The mixed methods approach or triangulation, as it is
sometimes known, has its origin in navigation, military strategy and surveying (Kohlbacher
2005). The term triangulation in social research is used in a less literal sense to describe the
use of a combination of multiple empirical research methods to investigate a phenomenon
(Wolfram Cox and Hassard 2005). The intention is that the combined techniques
complement each other (Johnson 2004).
Easterby-Smith, Thorpe and Lowe (1991) identified four forms of triangulation:
1. Data triangulation, which is the use of the same method of data accumulation on
different occasions or of a different method on the same object of the study.
2. Investigator triangulation, which is the use of several researchers or evaluators.
3. Methodological triangulation, which is the use of various data sources.
4. Triangulation of theories, which is the development of multiple theories about the
same research problem.
This study enhances the validity and reliability of its data by adopting two forms of
triangulation. The first one is data triangulation, in which the same method of data
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accumulation is used on different occasions. The second one is the development of multiple
theories about the same research problem. Multiple hypotheses are derived from the
theoretical framework of the study, which consists of multiple theories such as
psychological, motivational, resource-based, innovation and network. The testing of these
hypotheses results in the confirmation of multiple theoretical perspectives about Chinese
entrepreneurship. However, the qualitative method is omitted from this study due to reasons
given above.
Triangulation or mixed methods research enables a fuller understanding of empirical results
than might be achieved from data gathered using a single method. However, the main
weakness of triangulation identified in the literature is the investment of time and effort
required (Wood et al. 1998). There is the need for each phase of the methodology to be
planned, designed, executed and analysed. Nevertheless, Gillham (2000) argued strongly
that the investment of time and effort required in the triangulation approach is worthwhile,
since different methods have different strengths and weaknesses. Therefore, if these
methods converge, the researcher can be reasonably confident that he/she is getting a true
picture of the study. The effectiveness of triangulation therefore rests on the premise that
the weaknesses in one method will be compensated by the counter-balancing strengths of
another (Jick 1979). Also, the research finding from one method can be used to confirm the
findings of another (Creswell et al. 2007).
In this quantitative methodology, primary data were collected by means of a mail survey.
Objective data, such as demographic profiles, gender, industries, targeted businesses and
customers and others are used to compare the differences between the two generations of
Chinese entrepreneurs. The results are compared and analysed while the study’s hypotheses
are tested.
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Research Problem
Research Questions
Theoretical Framework
Integration and Analysis of 2 Data Sets (2 separate Generations)
Testing of the Hypotheses and Discussion of the Overall Results
Development of the Profile of Chinese Entrepreneurs
Diagram 5.1 Research Strategies Using Triangular Methodology
Hypotheses of the Study
Quantitative Data
Quantitative Survey
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5.5 Population and Sample of the Study
The population of the study comprises Chinese entrepreneurs in Box Hill. Box Hill, a
relatively new ethnic cluster, has the majority of its Chinese inhabitants from Mainland
China. Mandarin and Cantonese are spoken equally. Again, this suggests that roughly 50
percent of the Chinese have come from Guangdong province and Hong Kong where
Cantonese is the common dialect (Selvarajah et al. 2008). Interest in ethnic
entrepreneurship has been due to two factors. Firstly, the symbiosis of culture and business
has always fascinated the author. The study of Chinese immigrants in Australia provided
the author with the scope to explore the future course of Chinese immigrants’
entrepreneurship. Secondly, as a first generation ethnic Chinese entrepreneur in Australia,
the author was eager to find out whether this study on the business succession from the first
to second generation Chinese entrepreneurs can provide insights into business continuity.
The database of Chinese entrepreneurs in the municipality was obtained from the Australia-
China Commerce and Economic Association Inc. in Box Hill. All the subjects were
selected based on their involvement with the Chinese Chamber of Commerce in Box Hill,
which gave consent and support for the research (Appendix 2). The Association agreed to
mail out the questionnaire to its members. These subjects were all volunteers, without any
pay from either the author or the Department of Business and Enterprise at Swinburne
University.
The questionnaire was mailed out by the Australia-China Commerce and Economic
Association Inc. in Box Hill to its members, and the participants were asked to forward the
completed questionnaire in a reply-paid envelope to the First Investigator (Professor
Christopher Selvarajah) at Swinburne University.
In this study, some of the first generation Chinese were reluctant to reveal their past and
their previous experiences to outsiders, unless the outsiders were personally introduced.
This behaviour is very cultural, as business ‘secrets’ remain within the immediate family.
Fortunately, the author is from the Chinese community in Box Hill and is familiar with
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many of the subjects. Since the questionnaire did not include any sensitive personal issues,
the subjects were willing to fill in the forms. However, it did take some time for some
subjects, even after full explanation, to understand the importance and usefulness of their
replies. In comparison, the second generation group was more eager and willing to
participate in the study.
There was no risk to the participants as the whole anonymous survey was based on their
own personal views on how business is done. There was no personal data or information
that might cause any detrimental effect to self-esteem or embarrassment to the participants.
If the participants were uneasy regarding any issue in the questionnaire including gender,
age, or ethnicity, they could discontinue at any time, and/or report to Professor Selvarajah
or Swinburne University.
In this study, several assumptions have been made:
• Firstly, the terms immigrant entrepreneurs and ethnic entrepreneurs, although not
identical, are interchangeable (Collins et al. 1995).
• Secondly, following Light and Rosenstein (1995), this study adopts a very ‘loose’
definition of entrepreneurship. Entrepreneurs include all those who are in self-
employment; these include employers.
• Thirdly, in this study, each business employed less than 100 people.
In order to achieve the objective of the study of investigating Chinese entrepreneurship,
distinct criteria were used to identify the Chinese entrepreneurs for the sample. The
selection was based on the following attributes:
• The entrepreneur either owned all of his or her business, or was the majority
shareholder (50 percent).
• The entrepreneur, who had initiated the business, was actively involved in
managing it.
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• The business of the Chinese entrepreneur was based in the municipality under
investigation.
• The business had been in operation for at least one year.
• The business venture had to exhibit entrepreneurial features.
After the process of screening and scrutiny using the above outlined criteria, two hundred
and sixty-seven (267) subjects were identified for the sample. To collect quantitative data, a
survey questionnaire was mailed out to all the 267 Chinese entrepreneurs identified in the
study area. This enabled all the entrepreneurs in the municipality to participate in the
research irrespective of their ethnic background, age, country of origin, gender, industry,
position and other factors. Also, with the coverage of the entire population of subjects, the
variety or types of businesses that the Chinese operate, their targeted business and
customers were also included in this study.
5.6 Research Instrumentation
In this study, ‘entrepreneur’ is defined as someone who owns his or her business. The
person derives some income by engaging in business or economic activities as a self-
employed person. The business may or may not be inherited through the family. All the
subjects were selected based on their involvement with the Chinese Chamber of Commerce
in Box Hill, the business connection within the business communities all over Melbourne.
The respondents were clustered around the eastern suburbs, mainly in and around Box Hill.
These subjects were all volunteers and were unpaid.
5.6.1 Quantitative Method
The general purpose of this study was to investigate Chinese entrepreneurship. Therefore,
efforts were made to select a quantitative research instrument that would cover as many
Chinese entrepreneurs as possible in the study area. The general background and operating
environment of the Chinese entrepreneurs is Box Hill; the result from the survey of Chinese
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entrepreneurs in the study area can thus be generalized to Chinese entrepreneurs in
Australia. Quantitative data were therefore collected by means of a survey questionnaire
with 92 questions. The survey questionnaire was mailed out to 267 Chinese entrepreneurs
in the Box Hill municipality in Melbourne. Most of the questions were designed to collect
quantitative data.
The survey questionnaire was employed in the study to collect data because it was well
suited to the descriptive and correlative nature of the study and it enabled a systematic
collection of predominantly quantitative data (Bryman 2004, Kumar 2005). The data
collected were useful in measuring the identified variables and testing the specified
hypotheses of the study, which contributed to the understanding of Chinese
entrepreneurship (Neuman 2006). Furthermore, the mail survey procedure allowed the
efficient, in-time and one-off collection of data from respondents (Sekaran 2003).
Moreover, Sekaran (2003) further argued that questionnaires are preferred by respondents
because questions are more easily understood and can be answered at respondents’ own
pace and in their own time. The above arguments therefore support the choice of the survey
questionnaire in the study.
The 92 questions in the survey questionnaire were related to the research variables and the
five hypotheses of the study. Each question consisted of multiple-choice answers. The
subjects were to select the most appropriate answers; these answers were based on their
opinions derived from their personal experiences, thinking and knowledge. There was no
right or wrong answer. The answers ranked from ‘low importance’ to ‘high importance’.
The use of multiple indicators allowed the author to specify more precisely the desired
responses. This did not place total reliance on a single response, but instead on the
‘average’ or ‘typical’ response to a set of related responses. The guiding premise was that
multiple responses reflect the ‘true’ response more accurately than a single response. Based
on the theoretical framework of the study and the five major research questions, the
questionnaire was structured into six sections (a copy of the questionnaire is included in
Appendix 1).
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The questionnaire consisted of two parts: part 1 contained 12 questions and part 2 had 80
questions. The questions based on descriptive statistics (part 1 of the questionnaire) were
designed to give the Chinese entrepreneurs (in both generations) a general profile.
Part 1 collected demographic information, such as:
- Country of origin, gender, industry, position, targeted business, targeted customers,
age of respondents;
- Date of arrival in Australia, religion of respondents, question about spirituality;
- Type of migrant/migration program, when migrant started his or her own business.
Part 2 was used to collect information under six different headings. Question (0) was a
sample question. It had no statistical importance in this study and was excluded from the
analysis. The questions were divided into the following groups:
- Importance of different factors in setting up one’s own business (Q.1 – Q.8)
- Reasons for becoming an entrepreneur (Q.9 – Q.17)
- Views on different traditional Confucian values (Q.18 – Q.23)
- Views on and importance of different difficulties and hurdles (Q.24 –Q.68)
- Importance of having overseas expansionary vision in a business (Q.69 – Q.79).
5.6.2 Ethics Approval
Ethical issues generally arise in the design and conduct of research on human subjects and
in the reporting of results. It is a Commonwealth legislative requirement in Australia that
all projects involving human subjects meet certain standards and have written approval
from the accredited ethics committee. The Swinburne Human Research Ethics Committee
(HREC) or one of its sub-committees has responsibility for ensuring that research within
the University meets ethical principles. Hence the researcher had the responsibility to
ensure that ethics approval was obtained in writing before commencing the data collection
process, including the pilot study. It meant that no data were collected from any human
participants without approval. A completed standard form together with copies of the cover
letter and the survey questionnaire and interview schedule were forwarded to the Human
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Research Ethics Committee for its approval. The committee gave written approval to
conduct the survey after accepting the proposed research protocol.
An important ethical principle in the ethics protocol which this study adhered to was that no
harm should befall any person requested to participate in research. This necessitated
protecting the respondents’ anonymity and ensuring freedom from a stressful experience.
Thus, a written statement was given to all persons who would be requested to participate,
outlining the purpose and nature of the research project. Its objective was to assist those
persons to make an informed choice as to whether or not they wished to participate. A copy
of the statement was attached to the approval application. Later, the approved statement
became a part of the request letter that accompanied the survey questionnaire. Also, due
care was taken to ensure that all data collected were handled confidentially.
The procedure for grievance resolution during the research was also outlined in the initial
pages of the survey questionnaire. The questionnaire made it clear that in case a respondent
participating in the study had any concern about the participation, or a complaint, the
participant could either contact the research supervisor or the researcher in the first
instance. If the issues raised could not be solved, then the chair of the Human Ethics
Committee must be contacted. All relevant contact addresses and telephone numbers were
included (Appendix 2).
5.6.3 Pilot Study
An analysis plan that addressed the set of issues particular to the purpose and design of the
study was drawn up. The issues included general considerations such as minimum or
desired sample sizes and allowable or required types of variables and estimation methods.
The questions should cover areas that were important and significant to the entrepreneurs
themselves, as well as those questions that these entrepreneurs wanted to find out. These
questions were based on an earlier small-scale pilot study and personal experiences of
different entrepreneurs. Most of the questions were related to entrepreneurial behaviour and
views on the entrepreneurial process. The survey questionnaire was piloted to ensure its
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reliability and appropriateness for the study. According to Bryman (2004) and Neuman
(2006), piloting helps in ensuring that the survey questions operate well and the research
instrument as a whole functions well. In this study, the survey questionnaire was pilot-
tested in two phases.
Firstly, the questionnaire was piloted on two of the author’s contacts who were doctoral
students in sociology to ensure all the variables were completely and clearly covered.
During the pilot study, the doctoral students, who had experience in Chinese immigrant
history and migration issues, were very helpful in the reviewing of the questionnaire. The
questionnaire was reviewed on the basis of syntax, spelling, integration, comprehensibility
and grammar. This was to avoid confusion, ambiguity and sensitive issues such as family
members. This review also ensured that the intended respondents readily found the
questions understandable.
In the second phase, four Chinese entrepreneurs resident in Melbourne, Australia took part.
The researcher identified one Chinese telecommunication company owner, two retail
traders and one doctor (who owned a medical group) resident in Box Hill, who had created
their own businesses and were operating them very well. Their attributes and operations
met the criteria and qualifications of the target population of the study. Three of them
belonged to the first generation, and the fourth one belonged to the second generation.
These contacts were personal friends of the author. They had been advised of the ‘pilot’
nature of the study. The pilot test on this group was extremely important and very useful
since it ensured the cultural relevance of the study. These four people, through previous
acquaintance, gave a lot of useful information in the construction of the questionnaires.
Also, as suggested by Bryman (2004) and Neuman (2006), pilot testing is best conducted
on a small set of respondents similar to those in the final survey. This second group of
Chinese entrepreneurs doing business in Box Hill was very similar to those in the study’s
sample frame.
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The pilot test was conducted to ensure that the academic, business, social and cultural
relevance of the survey questionnaire was intact. Importantly, comprehensibility and
confidence in the research questions and instruments were also assured in advance.
5.6.4 Data Collection Procedure
A quantitative methodology approach was used to collect data for the study. The data were
collected in Box Hill, Melbourne from January to April 2008. The target population of the
study was Chinese entrepreneurs in businesses in the Box Hill municipality in the eastern
region of Melbourne. The database of the respondents was obtained from the Australia-
China Commerce and Economic Association Inc. (ACCEA) in Box Hill.
To collect the quantitative data, survey packs were mailed out to the 267 Chinese
entrepreneurs who were identified from the database provided by the ACCEA and then
further screened to reflect the characteristics of entrepreneurship. The survey packs were
mailed out. The survey pack consisted of the following items:
• The survey questionnaire titled ‘Dimensions of Entrepreneurship – A Study of First
and Second Generation Ethnic Chinese in Melbourne’;
• A covering letter;
• A reply paid envelope on which was printed the researcher’s name and address;
• A letter of expression of interest and consent to participate in interviews.
The covering letter explained the following: the purpose of the research and the benefits to
Chinese entrepreneurs and the nation of Australia as a whole; the estimated time required to
fill out the questionnaire; assurances of confidentiality; ethical approval; and a closing date.
Copies of the covering letter, expression of interest and consent letter, and the survey
questionnaire are provided in Appendices 1, 2 and 4.
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5.6.4.1 Responses to the Survey
A total of 200 usable completed questionnaires were collected out of the 267 that were
distributed, yielding a 74.9 percent response rate. According to Hart (1987), response rates
in business surveys vary from 17 percent to 60 percent, with an average of 36 percent.
Therefore the response rate of 74.9 percent was above acceptable for business surveys.
The high response rate could be as a result of the covering letter attached to the survey
questionnaire assuring confidentiality and emphasizing the importance of individual
responses to the study’s outcomes and the contribution to knowledge about Chinese
entrepreneurs in Box Hill. Also, since little research on this subject matter has been carried
out in the study area, the participants may have perceived this study as a medium to let
others hear about them and their activities. A reply paid envelope was also enclosed to
minimize monetary cost and inconvenience to respondents.
5.6.4.2 The Broad Characteristics of the Participants
The broad characteristics of the participating Chinese entrepreneurs and their ventures are
shown below (detailed analysis of the individual characteristics is presented in chapter 5).
The age of the respondent ages ranged from 20 to 69 (72 percent aged between 30 and 59).
Their businesses were located across numerous small-scale industries, including
restaurants, professionals, retail, trading, computer and others. Eighty-one percent had
started their own business, 61 percent were in a partnership or family business, 64 percent
had targeted local suburbs, and 78.5 percent had targeted general customers.
The first generation Chinese (66 percent of the whole group) came from various countries
such as Hong Kong, Vietnam, Taiwan, China, Malaysia, New Zealand, Singapore and
others. Fifty-five percent of the total respondents were male. Overall, the whole population
was divided into three groups: Christianity (32 percent), Buddhism (30 percent) and no
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religion (35 percent). Lastly, only 14 percent chose ‘Most times’ or ‘Yes’ in answer to the
spirituality question.
5.7 Data Analysis Method
This section presents all the statistics tools used in this study. SPSS software was used
throughout the whole statistical analysis. Quantitative data were analysed using the
Statistical Package for Social Scientists (SPSS) software Version 17. SPSS was chosen
because it was very useful for performing the statistical tests which were conducted in the
study, such as multiple regressions, correlation, reliability, factor analysis and structural
equation modelling.
Data from the responses to the questionnaires were coded and entered into the SPSS
program for statistical analysis. SPSS generated outputs that provided the researcher with
systematic frequency counts and sorted and rearranged the data, and served as a useful
data-entry device, with labels for brief entries. SPSS is very useful for the analysis of large
data as in this study; it enabled the researcher to gain a greater insight into the actions,
attributes and attitudes of the Chinese entrepreneurs. Its usage also brought out the
relationship or interdependence of the independent and dependent variables of the study in
the testing of the hypotheses (Bryman and Cramer 2004; Pallant 2005).
5.7.1 Factor Analysis – Data Reduction Tool
The objective was to find a way of condensing the information contained in a number of
original variables into a smaller set of variates (factors) with a minimum loss of
information. By providing an empirical estimate of the ‘structure’ of the variables
considered, factor analysis becomes an objective basis for creating summated scales. Factor
analysis, including both principal component analysis and common factor analysis, is a
statistical approach that can be used to analyse interrelationships among a large number of
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variables and to explain these variables in terms of their common underlying dimensions
(factors).
Since the number of questions in this study was high (92), there was a need to use factor
analysis to reduce or summarize the original data into smaller manageable units for analysis
and to identify the structure underlying them. Factor analysis, including both principal
component analysis and common factor analysis, is a statistical approach that can be used
to analyse interrelationships among a large number of variables and to explain these
variables in terms of their common underlying dimensions (factors).
The insight provided by data summarization can be directly incorporated into other
multivariate techniques through any of the data reduction techniques. The author benefited
from both the empirical estimation of relationships and the insight into the conceptual
foundation and interpretation of the results. The author first identified the separate
dimensions of the structure and then determined the extent to which each variable was
explained by each dimension. These dimensions and the explanation of each variable were
then determined (see chapter 7). Subsequently, the two primary uses for factor analysis –
summarization and data reduction – were achieved. Groups of variables may be interrelated
to the extent that they are all representative of a more general concept, or construct. The
purpose is to retain the nature and character of the original variables, but at the same time,
the factor analysis is used to reduce the size of the data in order to simplify the subsequent
multivariate analysis.
Factor analysis was employed in the analysis of the questionnaire because it is an
interdependence technique in which all variables are simultaneously considered, each in
relation to all the others, while still employing the concept of the variates, the linear
composite of the variables. All the variables or questions were formed to maximize the
explanation of the entire variable set. This tool provides an empirical basis for assessing the
structure of variables and the potential for creating these composite measures or selecting a
subset of representative variables for further analysis.
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After the data reduction, factor analysis was used to identify representative variables from a
much larger set of variables for use in subsequent multivariate analysis. Later, an entirely
new set of variables was created, much smaller in number, to partially or completely
replace the original set of variables for inclusion in subsequent techniques.
From the data summarization perspective, factor analysis can provide a clear understanding
of which variables may act in concert and how many variables may actually be expected to
have impacts in the analysis. The variables are expected to be highly correlated and
members of the same factor will be expected to have similar profiles of differences across
groups in multivariate analysis of variance or in discriminant analysis. MANOVA assumes
normality, so it could not be used to compare the generations.
The related statistical tools of factor analysis such as Kaiser-Meyer-Olkin (KMO) and a
reliability test were also employed. The KMO and Bartlett test of sphericity indicates the
factorability of a correlation matrix and supports the factorability of variables. Reliability
testing was also conducted for each of the extracted factors to ascertain the degree to which
the items making up the scale agreed; that is, to find out whether all the variables collated
on one factor had internal consistency and measured the same underlying constructs
(Bryman and Cramer 2004, Hair et al. 2006, Pallant 2005). How the statistical methods
were employed in the data analysis will be described in the analysis of the data and the
testing of the hypotheses in chapters 6 and 7.
In this study, several criteria are used:
1. Rotation (direct oblimin, rotated solution and Delta = 0)
2. Extraction (correlation matrix, eigenvalues > 1, unrotated factor solution)
3. Descriptive (initial solution, KMO – valued > 0.7 and Barlett’s test of sphericity
< 0.001)
4. Options (exclude case listwise, sorted by size and suppress absolute values less
than 0.10)
5. Total variance explained – for 2 factors > 50 percent
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6. Communalities - percent variation explained for each variable > 20 percent
(0.20)
7. Different loadings to make up the construct or variable for further statistical
analysis.
5.7.2 Multiple Regression
The main statistical technique used in the study to describe the relationship between the
independent and dependent variables is multiple regression. Multiple regression analysis is
a general statistical technique used to analyse the relationship between a single dependent
variable and several independent variables, as in the case study. Multiple regression is a
widely used and versatile modelling technique, applicable in every facet of business
decision making and business research projects such as this study. It allows the researcher
to predict a score or result on a dependent variable from the score or result of a number of
independent variables (Bryman and Cramer 2004; Hair et al. 2006; Pallant 2005). Multiple
regression analysis also produces correlations, which are useful for the exploration of the
strength of the association between any two pairs of variables, and beta coefficients which
give an indication of the relative contribution of each independent variable. Another related
statistical tool is analysis of variance (ANOVA). It is useful for detecting any significant
difference in the relationship between categorical independent and dependent variables
(Hair et al. 2006, Pallant 2005).
5.8 Summary
The research design and methodology, the objective, the research questions and the various
approaches to the study have been outlined and justified in this chapter. The research
objectives of the study support an approach which allows the use of a quantitative method
of data collection and analysis. This approach allows the investigation and exploration of a
number of diverse variables to provide detailed information about Chinese
entrepreneurship, as well as the testing of hypotheses to determine the applicability of
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existing theories in the context. The presentation of the results and findings follows in the
next chapter.
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Chapter 6
Analysis - Demographic Profiles of the Chinese Entrepreneurs
6.1 Introduction This chapter reports on the analysis of the quantitative data. In this chapter, the analysis is
presented using frequency percentages, with the intention of developing patterns of
agreement and themes across cases. The systematic presentation of the combined
quantitative results will reveal the demographic profiles of these Chinese entrepreneurs.
In order to gain insight into the basic demographics of the Chinese entrepreneurs in Box
Hill, the study includes questions about date of arrival, country of origin, gender, industry,
position, targeted business, targeted customers, age, religion, spirituality and start-up of the
business. Each section below consists of the results and the interpretation of the results, so
that a full demographic profile of the Chinese entrepreneurs can be compiled and presented.
In this chapter, the analysis is presented in a structured manner according to the sequence of
the sections in the questionnaire survey. The sequencing of the questionnaire follows the
five dimensions of the Chinese entrepreneurs based on the research questions (Appendix 1).
Each of the five dimensions begins with a brief introduction reflecting the variables
investigated, followed by the results and findings. Findings are discussed in relation to
previous literature. These results are further analysed and interpreted in Chapter 8, when
the hypotheses of the study are tested and the overall results are discussed. Finally, in
Chapter 9, the findings are summarized, leading to the concluding profile on the Chinese
entrepreneurs in Box Hill (see Diagram 1.1).
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6.2 Sample Sizes of First and Second Generations
The criteria used in this study for selecting the two generations are:
1. Those who came to Australia after the age of 10 = first generation.
2. Those who were born in Australia, and those who came to Australia before the age
of 10 = second generation.
The term ‘second generation’ represents not only those who were born in Australia, but
also it includes the under-age (less than 10 years old) ethnic Chinese who came here with
their parents. It is assumed that this group has generally been attending the local schools.
Hence, this group has spent a significant portion of their growing period in Australia. This
generation has therefore adapted to the Australian way of living as part of daily life. This
adaptation occurred during the most important period when this younger generation tended
to be more receptive towards new changes and ideas (Section 1.9.3).
No distinction has been made between children born in Australia, children from English-
speaking countries and children from non-English speaking countries in schools. Learning
and adjustment difficulties are effectively masked, especially for the last group. In
conclusion, the validity of treating those who arrived before their tenth birthday the same as
those who were born here will stand, and they should be treated as a single group; i.e.,
second-generation Chinese.
As shown in Table 6.1, the raw data pool of 200 subjects is split into two groups – first and
second generation entrepreneurs – and the results are as follows:
Table 6.1 Sample Size of the First and Second Generation Entrepreneurs (N=200)
Variable Level Number %
Generation 1st 132 66
Generation 2nd 68 34
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The sample consisted of:
• The first generation (66 percent)
• The second-generation (34 percent).
During the cross-check, there was one respondent found who was born in Australia but had
left the country and returned at a later stage. This particular person was counted as a ‘first
generation’ as he left the country a few years after he was born, and he did not return until
he was older (>10 years old). The ratio of first generation to second generation is
approximately 2:1. This indicates that there are more first generation Chinese than second
generation Chinese in this study, and this may reflect the current distribution in the eastern
suburbs. Selvarajah et al. (2008) pointed out that Box Hill is a relatively new ethnic cluster
and the immigrants started to move into the area from the 1980s. This is supported by the
results in Section 6.2.8 (ages of the respondents), of which the group aged 20–29 years
constitutes only 24 percent of the whole study.
In summary, there are more first generation Chinese entrepreneurs than second generation
Chinese entrepreneurs in this study.
6.3 Country of Origin
Hong Kong is the country where these immigrants mostly came from (30 percent) in the
overall pool (N=200). In the first generation group, Hong Kong is the country of highest
frequency in the population. This is because the business communities surrounding Box
Hill and the neighbouring suburbs were predominantly (in the earlier years of immigration)
made up of immigrants from Hong Kong. In the second generation, apart from those who
were born in Australia, Hong Kong is still the country of highest frequency. Literature by
Selvarajah (2008) also supports this trend. They are professional, technical and managerial
persons, and some are quite wealthy (especially those who came to Australia under the
Business Migration program).
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The other common countries are Vietnam, Taiwan, China, Malaysia and Singapore. The
results indicate a broad representation of these immigrants. From the mid-1980s, more
immigrants from Hong Kong and Taiwan arrived to stay in Box Hill. In 1989, after the
Tiananmen incident, Chinese students who were studying in Australia were granted
permanent resident status. This contributed to the growth of Box Hill as the second
Chinatown of Melbourne. This follows the same trend found in previous censuses (ABS
1995, 2000, 2006b): Box Hill was first ‘Asianised’ by Vietnamese about 25–30 years ago,
and then by Taiwan and Hong Kong 15–25 years ago, and finally by Chinese from China in
recent years. In fact, the change in combination and distribution of the restaurant business
and other businesses coincides with the immigration trend in the last 30 years. Below is a
summary of subjects from different countries.
Table 6.2 Country of Origin (N=200)
Country of
Origin
Total
Number
%
1st Gen
%
2nd Gen
%
Australia 32 16 0 0 32 47.1
Hong Kong 60 30 50 37.9 10 14.7
Vietnam 19 9.5 10 7.6 9 13.2
Taiwan 20 10 18 13.6 2 2.9
China 29 14.5 24 18.2 5 7.4
Malaysia 20 10 15 11.4 5 7.4
New Zealand 2 1 2 1.5 0 0
Singapore 13 6.5 9 6.8 4 5.9
Others 5 2.5 4 3.0 1 1.5
Total 200 100 132 100 68 100
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It is important to point out that even though the entrepreneurs come from different
countries, these entrepreneurs are Chinese by descent. This broad representation also
indicates a multi-national Chinese community in Box Hill. At the same time, the inclusion
of these countries averages out and neutralizes the bias of any entrepreneurship pattern that
may occur if these immigrants were from one single country. Overall, Australian-born
Chinese (also known as ABC) constitute 16 percent of the whole population in this study
(32 out of 200).
6.4 Gender
The results are illustrated as follows:
Table 6.3 Gender of the Respondents (N=200)
Variable
Type
Total
Number
%
1st
Gen
%
2nd
Gen
%
Gender Male 110 55 75 56.8 35 51.5
Gender Female 90 45 57 43.2 33 48.5
In the first generation component of the sample there are more males than females. This
may be due to the fact that males are predominantly the major income earners in traditional
Chinese families; the wives are left to look after the children. This 13.6 percent difference
is equivalent to 18 more males than females in the first generation distribution (a pool of
132 subjects). The results confirm the absolute status of the father in the family as the head
of a hierarchy (Clammer 2002, Taormina and Lao 2007).
The gender representation of the respondents is fairly even in the second generation. The
higher percentage of women in the second generation indicates that they are more active in
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the work force compared to the first generation entrepreneurs. There are three possible
reasons why these females participate in entrepreneurship instead of staying at home:
• They do not have their own children yet;
• They may have their children looked after by friends, helpers or grandparents,
which is a common practice in Chinese families;
• Their businesses are more flexible, so they do not have to be with the children all
the time.
Although the questionnaire survey did not include questions in relation to the highest
educational qualification of the respondents, higher qualifications in the second generation
are expected. There is a maxim among Chinese parents that they put all their hope in the
next generation and strongly impress upon the second generation the importance of higher
education (Chu 1995), so that they are motivated to become high achievers. This axiom has
been planted in their mindset from generation to generation, stimulating a strong
competitive spirit. This valuing of higher qualifications has a strong influence on second
generation Chinese, especially when the first generation has a low literacy level (Godement
1999). The general belief is that by studying hard and achieving academically, the younger
generation will increase their opportunities of gaining wealth and respect, whereas without
academic achievement they will be disregarded in society. This gives support to the rise in
female entrepreneurs in the second generation, compared to the first generation.
In summary, there is a rise in female entrepreneurs in the second generation. Further
analysis will be carried out, in the next chapter, to find out whether the gender difference
shows any significant differences among different variables within the two separate
generations of entrepreneurs.
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6.5 Industry
The following is a summary of the data on the industries collected in this study:
• Restaurants or take-away businesses show a significant difference between the first
and second generation entrepreneurs. The drop from 32.6 percent to 16.2 percent
can be explained by facts that the hours are longer and the labour involved is no
longer attractive to the second generation. In fact, restaurants or take-away
businesses have always been more demanding in both attention and involvement,
even though they are cash-oriented businesses. Conversely, as mentioned in an
earlier section, the second generation can choose to change to a more comfortable
lifestyle and work style. This will be explained in a later section.
• There is an increase in the ‘dry’ retail category, from 12.1 percent to 29.4 percent;
this includes clothing, phones, computers, pharmacies, pet shops and others. These
businesses require more language and management skills that are more prominent
and easier to achieve by second-generation entrepreneurs.
• Professionals such as doctors, lawyers and accountants are the most common. The
increase from 17.4 percent to 23.5 percent may add evidence that the second
generation is entering the professional fields more than the first generation. This
result is similar to that of the ‘dry’ retail.
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Table 6.4 Industries of the Respondents (N=200)
Industry
Total
Number
%
1st Gen
%
2nd Gen
%
Restaurant
Take-away
54 27 43 32.6 11 16.2
Real estate 16 8 10 7.6 6 8.8
‘Wet’ retail
such as grocery
12 6 8 6.1 4 5.9
‘Dry’ retail
such as clothing
36 18 16 12.1 20 29.4
Professional,
such as doctor
39 19.5 23 17.4 16 23.5
Other 43 21.5 32 24.2 11 16.2
Total 200 100 132 100 68 100
There are several reasons for the choice of industries from one generation to another:
Language is commonly perceived as a core element in the interrelationships between an
ethnic minority and the host group as it provides common means of communication and,
more importantly, represents a mode of identity (Wu 1995). Tait et al. (1990) suggested
that the rules of success are written in English, implying that the reduction in the language
barrier enhances communication and therefore enables the entrepreneurs to adopt and
assimilate into the local businesses and local cultures. The behaviour of language can also
be explained by communal notions of social categorization, social identity, social
comparison, psychological distinctiveness and cognitive alternatives (Wu 1995).
Education is an important determinant in the change of industries from first to second
generation Chinese entrepreneurs. The enhancement in education level increases
opportunities of working in the professional fields and higher paid jobs in order to gain
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wealth and respect, as has been pointed out earlier. This valuing of higher qualifications has
a strong influence on second generation Chinese, especially when the first generation has a
low literacy level (Godement 1999).
Human capital is a crucial factor in enterprise establishment, influencing business success.
Resource-based theorists propose that an entrepreneur’s human capital is comprised of
management skills and tacit knowledge (Coleman 1988, Sequeira and Rasheed 2004);
previous entrepreneurial experience (Ronstadt 1988, Selvarajah 2004); and venture
resources in the form of capability assets, strengths and skills (Grant 1991). These types of
human capital, among others, contribute to growth and the success of business ventures,
and they are directly linked to the educational levels of the entrepreneurs. The results from
above support the theories.
Financial capital is more easily accessible in the second generation than it was to the first
generation Chinese entrepreneurs. This is because, in Chinese culture, money contribution
from family and relatives is common (Hsing 1996, Li 1988). The importance of the family
and ethnic community as a source of financing and employment and as a customer base and
support for ethnic entrepreneurs (Waldinger et al. 1990) cannot be ignored. Family
members including spouses, children and other extended family members are often used as
both formal and back-up personnel to support the business. This is in addition to the cash
capital that can come from many sources, including personal savings, banks, government
programmes and venture capital funds. Although obtaining the necessary financing to start
and grow a business is generally considered one of the entrepreneur’s major problems, it is
not difficult for the second generation to gather the resources.
The main aim of this study is to point out that while it is important to study Chinese
entrepreneurship in Melbourne, the results from the whole pool cannot depict a complete
picture, and, certainly, the results from one single pool (N=200) cannot show the
differences among the two generations. The following is a good example:
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The make-up of the 43 respondents (N=200) who chose ‘other’ represents 21.5 percent of
the whole pool. This result, however, does not give detailed information about the
industries involved. Upon further analysis of this ‘other’, and when the 43 respondents are
split into the first and second generations, it is found the distributions of the 32 respondents
in the first generation are: vegetable growing (5), delivery companies (3), child care (5),
hairdressing salons (9) and other (10 unknown). On the other hand, the 11 respondents in
the second generation comprise computer-related industries (4) and trading (7). Full cross-
tabulation results (Appendix 7) show the significance to be less than < 0.05.
In summary, the shift of business change from labour-intensive businesses to mind-
intensive businesses shows the change in entrepreneurial styles between the two
generations.
6.6 Position
Since all subjects are entrepreneurs, none of them is an employee. There are three
categories: sole employer, partnership with others and family business. The difference
between the three indicates the independence of the entrepreneurs. In the ‘sole employer’
category, only one person is involved. There is more than one person involved in the
categories ‘partnership’ and ‘family business’.
Table 6.5 Positions of Entrepreneurs in Their Businesses (N=200)
Position Total % 1st Gen % 2nd Gen % Sole
employer 78 39 51 38.6 27 39.7
Partner-ship
65 32.5 49 37.1 16 23.5
Family Business
57 28.5 32 24.2 25 36.8
Total 200 100 132 100 68 100
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The only apparent difference in this variable is that there is an increase of family business
(from 24.2 percent to 36.8 percent) from the first to the second generation Chinese. This
increase may be due to the transfer of family businesses from one generation to another,
which is a traditional way of Chinese entrepreneurship. Family business succession cannot
be ignored in the studies of entrepreneurship. The successor’s process of induction to
family business behaviour plays a crucial role in the succession process (Fletcher 2004,
Yan and Sorenson 2006). On the positive side, it provides family continuity to the business,
raises the entrepreneurial potential of descendants, and reduces the level of conflict among
siblings in the succession process.
Traditionally, through education and indoctrination, the younger members of the extended
Chinese family learn and accept the responsibility that they will care for the financial and
social wellbeing of the elderly members in their family. The elderly accept care as their
right and families have pressure from the wider community to meet their obligations. Such
reciprocal relationships are still considered a distinctive characteristic of Chinese family
cultural values (Ryan 2003). Exercising individuality is a threat to an orderly society and
therefore directly contradictory to one’s duties and responsibilities to others (Fouts & Chan
1995). However, when this process does not fit particular succession requirements, the
negative side of succession in family business commonly appears: sibling rivalry, poor
performance, and business failure (Yeung 2000, Carney 1988).
On the other hand, there is a decrease in partnerships (from 37.1 percent to 23.5 percent)
from the first to the second generation. The formation of partnerships in businesses is
common in earlier days, due to collective human and social capital accumulation. Lofstrom
(2002) and Raijman and Tienda (2000) also provided some similar examples of ethnic
resources such as the knowledge and skills to run businesses, the ability to transfer
experiences and managerial skills, the availability of cheap labour, and the social support
networks that facilitate a new owner in obtaining necessary start-up capital. Such resources
are important for new settlers in establishing their small businesses in the host country.
Similarly, Sequeira and Rasheed (2006) suggested that within the same ethnic group,
immigrant entrepreneurs can actively utilize these resources or passively benefit from them
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in their business activities because such resources help reduce risks and uncertainties that a
new immigrant would face when starting a business, and they also serve to minimize
transaction costs associated with labour and financial market transactions. This is common
among the first generation Chinese entrepreneurs.
In summary, the literature supports the change of business mode from partnership to family
business mode, when the businesses are passed onto the second generation. This claim is
also supported by the results in this section, which show that the percentage of decrease (–
13 percent) in partnership is the same as the increase (+13 percent) in family business
between the two generations. There is little change in the proportion of ‘sole employer’.
6.7 Targeted Businesses
This section aims to find if the two generations of Chinese entrepreneurs select the locality
and size of targeted businesses differently. The results are as follows:
Table 6.6 Locality – Targeted Businesses of Entrepreneurs (N=200)
Targeted Business
Total % 1st Gen % 2nd Gen %
Local suburbs
128 64 82 62.1 46 67.6
Greater Melbourne
26 13 14 10.6 12 17.6
Victoria 9 4.5 5 3.8 4 5.9 Victoria + Interstate
17 8.5 15 11.4 2 2.9
International 20 10 16 12.1 4 5.9 Total 200 100 132 100 68 100
The results indicate that, on average, 64 percent of the total pool (two generations
combined) targeted businesses in local suburbs. This figure is similar to the figures of both
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generations. However, other figures indicate that while the second generation expands their
targeted business beyond local suburbs into Greater Melbourne and Victoria, there are more
first generation entrepreneurs doing business interstate (11.4 percent to 2.9 percent) and
internationally (12.1 percent to 5.9 percent).
Overseas and interstate connection – In the last twenty years, Asian families migrating to
Australia have changed from ‘permanent’ migration to ‘semi-migration’ – the ‘astronaut’
families. Astronaut families are a type of family arrangement found in migrant Asian
families whereby one or both parents reside and work in their home country while the
remainder of the family live in the host country (Ip et al. 1998, Pe-Pua et al. 1996).
Although this arrangement is not a preferred option, it enables the entrepreneurs to keep the
‘old’ contacts as well as building up the ‘new’ ones in Australia. It is assumed that the first
generation will prefer to work in an environment with similar background and culture if
they want to expand their businesses. The ease of flying between countries and the better
socio-economic background of these families makes it easier for the parent or parents to
travel back and forth between the home and host countries. These first generation Chinese
entrepreneurs facilitate the exchange of ideas, goods and services. They form bridges
between different locations, especially the homeland (Pookong and Skeldon 1994).
Although the second generation has been exposed to at least two cultures (the Australian
culture in the society and the Chinese traditional culture in their family, in which the
parents were the first generation in Australia), they are not different from average
Australians (Ho 2003, Xiao 2001). This implies that they should have more local
connections and contacts than the first generation. Hence, it is assumed that this generation
chooses to expand into Greater Melbourne and Victoria rather than overseas.
In summary, while both generations target their businesses in all localities, there is a
difference in preference in the two generations; with the first generation preferring to
conduct business interstate and overseas, and the second generations preferring to conduct
business within the state of Victoria.
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6.8 Targeted Customers
The targeted customers consist of three groups: (1) Chinese customers only; (2) Asian
customers, which includes the Chinese and other Asian groups; and (3) general, which
consists of everyone including Australians, Greeks, Italians, Asians and others. The results
are summarized as follows:
Table 6.7 Target Customers of Entrepreneurs (N=200)
Targeted Customer
s
Total % 1st Gen % 2nd Gen %
Chinese 13 6.5 11 8.3 2 2.9 Asians 30 15 20 15.2 10 14.7 General 157 78.5 101 76.5 56 82.4
Total 200 100 132 100 68 100
In the total population, most subjects (78.5 percent) prefer to do business with the general
public. Separately, this proportion is higher in the second generation than the first
generation (82.4 percent compared to 76.5 percent). On the other hand, the proportion of
Chinese as targeted customers is lower in the second generation (8.3 percent to 2.9
percent).
In this case, where minority groups have an inadequate command of the dominant
language, their ethnic identity becomes an important and distinctive status and an ascribed
aspect of their person-hood. For the first generation entrepreneurs, even though the speed of
social and cultural change varies from person to person and for some the change occurs
quickly, people tend to retain their ethnic identity despite having moved to a new
environment (Eriksen 2002). Therefore, in choosing the target customers, the first
generation will have a preference for dealing with customers from the same ethnic
background, to facilitate the exchange of goods and services. Conversely, this is also an
indication that the second generation feels more ‘assimilated’ when mixing with the general
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public. The six percent increase in the general public proportion is matched by the decrease
of Chinese customers in the second generation.
In summary, there is an obvious preference for targeted customers due to generation
difference. This result is also comparable to that of the targeted businesses mentioned in the
previous section. This proves that there is a difference in entrepreneurial behaviour between
the two generations.
6.9 Age of Respondents
The ages of the respondents were spread evenly across the whole range:
Table 6.8 Age of Respondents (N=200)
Age Total % 1st Gen % 2nd Gen % <19 0 0 0 0 0 0
20-29 48 24 4 3 44 64.7 30-39 52 26 30 22.7 22 32.4 40-49 50 25 49 37.1 1 1.5 50-59 42 21 42 31.8 0 0 60-69 6 3 5 3.8 1 1.5
Over 69 2 1 2 1.5 0 0 Total 200 100 132 100 68 100
The results indicate that 96 percent of the respondents are 20–59 years of age. In this study,
all the respondent entrepreneurs are still engaged in their businesses. A further assumption
is that these respondents are still working full time. Therefore, the results of this research
give a current representation of their views on entrepreneurship. The validity of the results
and the significance of this research can be further supported. The Chinese entrepreneurs
fall mainly into the economically active age groups, that is between 30 and 59 (72 percent).
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There were only six subjects aged 60–69 and one over 69, which suggests that the number
of older generation Chinese immigrants is not that high. The combined proportion for the
age groups 40–49 and 50–59 in the first generation is 68.9 percent, while the proportion for
the age group 20–29 in the second generations 64.7 percent. This age distribution indicates
that a significant influx of Chinese immigrants started only thirty years ago. Hence, the
history of Chinese entrepreneurship remains in the initial stage, where the community still
remains largely either first or second generation. This is supported by the following
censuses.
According to the 2006 Census, 90.6 percent of Chinese in Victoria were first generation,
and 7.2 percent were second and third-plus. These figures are comparable to those of the
national statistics. Compared to the same categories of statistics in the 2001 Census (ABS
2001), the figures are very close (89.5 percent and 7.5 percent), The population of third-
plus generation seems to be relatively small, although this category is likely to increase
substantially in the future with more second generations reaching marital age and
increasing numbers of Chinese migrants settling permanently in Australia.
In summary, the results support the notion that Box Hill is a relatively new ethnic cluster,
where less than four percent of the whole pool (N=200) is older than 60. In addition, 72
percent of these Chinese entrepreneurs fall into the economically active groups.
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6.10 Religion of Respondents
The inclusion of religion in this study is to cross-check if there has been any change in the
religious beliefs of the subjects. The results are as follows:
Table 6.9 Religion of Respondents (N=200)
Religion Total % 1st Gen % 2nd Gen % Christianity 64 32 32 24.2 32 47.1 Buddhism 60 30 48 36.4 12 17.6
Daoist 0 0 0 0 0 0 No religion 70 35 47 35.6 23 33.8
Other 6 3 5 3.8 1 1.5 Total 200 100 132 100 68 100
Overall, the pool is divided into three categories: Christianity (32 percent), Buddhism (30
percent) and no religion (35 percent). Upon further analysis of the results from the two
generations, the proportion of no religion remains similar (35.6 percent and 33.8 percent).
However, there is a significant increase in Christianity (from 24.2 percent to 47.1 percent)
from the first to the second generation; this is an increase of 94.6 percent. Conversely, there
is a significant decrease in Buddhism (from 36.4 percent to 17.6 percent) from the first to
the second generation; this is a decrease of 107 percent. Full cross-tabulation results
(Appendix 7) show the significance to be less than < 0.05.
The interchange between Christianity and Buddhism indicates the shift in religion belief
between the two generations. Traditionally, Buddhism is prevalent in most Chinese
families. The shift in religious belief may be due to:
• Less traditional culture and belief teaching in Australia
• Discontinuation of Buddhist practice due to long working hours in the first
generation
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• More local Christian teaching in school
Due to the differences in religious upbringing in their earlier years, more of the younger
entrepreneurs are affiliated with Christianity than the older entrepreneurs, who are more
affiliated with Buddhism. This lends support to the acculturation theory that the influences
during the earlier years, such as education and western styles of thinking and upbringing,
will change the views of these second generation entrepreneurs (Chan 2000).
In summary, religion has never played an important role in Chinese history, at either the
political or the familial level (Chan 2008, Cheng 1997). While Christianity and Buddhism
are the two major religions of the respondents (ABS 2006b), religious teachings are not
important in business. Therefore, the influences of religion on entrepreneurship are not
important in either generation.
6.11 Are You Highly Spiritual?
The total percentage of ‘unsure’, ‘maybe’ and ‘no’ is 66.5 percent of the pool (N=200).
Upon further analysis, the separate responses of the two generations are 62.1 percent and 75
percent. The difference is significant. In Chinese culture, spirituality is often confused with
superstition or fengshui. While there is a decrease of Buddhism in the second generation
(see previous section), the proportion of spirituality has also decreased. Full cross-
tabulation results (Appendix 7) show the significance to be less than < 0.05. The results are
as follows:
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Table 6.10 Level of Spirituality of Religion among Respondents (N=200)
Highly
Spiritual Total % 1st Gen % 2nd Gen %
No 63 31.5 38 28.8 25 36.8 Maybe 47 23.5 26 19.7 21 30.9 Unsure 23 11.5 18 13.6 5 7.4
Sometimes 39 19.5 25 18.9 14 20.6 Most times 18 9 17 12.9 1 1.5
Yes 10 5 8 6.1 2 2.9 Total 200 100 132 100 68 100
In summary, although there is a significant change in spirituality between the two
generations, this should have only minimal influence (similar to that of religion) on
entrepreneurial behaviour and related businesses.
6.12 Did You Start Your Business?
The importance of this question relates to the risk-taking factor (new business set-up) as
well as to family back-up (family business succession). According to the resource-based
perspectives, apart from education, human capital is derived from work experience and
family support.
Research has shown an important and positive relationship between prior work experience
in the same industry or line of business and venture success (Carter et al.1997, Cooper et al.
1994). Highlighting the importance of previous work experience, Kim et al. (2003)
explained that if the work experience occurs within the industry in which the new business
venture is located, individual entrepreneurs will gain opportunities to understand industry-
specific market forces and identify potential market opportunities to exploit. Furthermore,
work experience increases opportunities for individuals to obtain positions within various
social networks that can be transformed into the setting up of new businesses.
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On the other hand, researchers have speculated that self-employed parents might encourage
the development of entrepreneurial attitudes in their children through socialization. Parents
may somehow be instilling a learned preference for self-employment in their children,
possibly by providing work experience at a young age or through exposing their children to
the entrepreneurial lifestyle and the social networks tied to their businesses (Carroll and
Mosakowski 1987). This exposure to entrepreneurial skills through socialization may
include not only someone’s parents but also other relatives, as well as friends. Other family
within the same generation (siblings and cousins) can influence an individual’s beliefs
about entrepreneurship, as well as provide role models and practical knowledge. The results
are as follows:
Table 6.11 Starting Own Business among Respondents (N=200)
Start your own
business
Total % 1st Gen % 2nd Gen %
Y 162 81 113 85.6 49 72.1 N 38 19 19 14.4 19 27.9
Total 200 100 132 100 68 100
In this study, the overall results indicate that 81 percent of the respondents started their own
businesses. Once again, further analysis of the results of the two generations indicates a
decrease (from 85.6 percent to 72.1 percent) from the first to the second generation in
starting their own businesses. Conversely, there is an increase in ‘not starting your own
businesses’ (14.4 percent to 27.9 percent) from the first to the second generation. A
possible explanation is that the first generation may have started to shift and transfer the
family business to the second generation. However, there are still second generation
entrepreneurs starting their own businesses instead of following the familial pathways. Full
cross-tabulation results (Appendix 7) show the significance to be less than< 0.05.
In summary, although there is a decrease in those starting their own business in the second
generation, the proportion of the overall population starting new businesses (81 percent) is
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still fairly high. This supports the notion that there are other entrepreneurs looking into new
businesses instead of carrying on other existing or familial businesses.
6.13 Summary
It is important to point out that, apart from looking at the results in the population (N=200)
as a group, it is important to look at the results between the two generations to see the real
changes and the trends in the course of entrepreneurship. The important findings for the
Part I questions are summarized as follows:
Table 6.12 Analysis of Part I Results (Demographic)
Topic Findings Remarks Sample Size Total is N=200, 1st gen. is 132,
2nd gen. is 68 Good representation and strong results in this study
Gender 1st gen. = more male, 2nd gen. = fairly even
Active work force from both genders in the 2nd gen.
Country Good representation of the most common ‘emigrant’ countries
Results are strongly supported
Industry More labour intensive business in the 1st gen. than the 2nd gen.
The shift is due to change in human and capital resources available such as education, local business know-how and better interaction with the local Australian public
Family business
Increase in family business in the 2nd gen
Traditional succession of family business is supported
Partnership More partnership in 1st gen., more family business in 2nd gen.
Financial back-up and resources are better in the 2nd gen.; however, familial involvement and networking are still important
Targeted businesses
1st gen. – higher percentage looking for customers interstate and internationally
More willing to make overseas connection than the 2nd gen.
Targeted customers
2nd gen. – prefers to do business with general public (within and outside Chinese community) more than does 1st gen. (mainly with Chinese community)
Because of better communication skill and local know how
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Age of Respondents
Only 6 respondents aged between 60-69
Although the history of migration began more than 100 years ago, the vast change occurred only in last 30 years (since the Vietnamese refugee wave)
Religion More Buddhism in 1st gen. than 2nd gen.; more Christianity in 2nd gen. than 1st gen.
Strong indicator of influences of acculturation during earlier years. This supports the importance of education and other western styles of thinking and upbringing in shaping the future of Chinese entrepreneurship
Spirituality Decrease in the 2nd gen. This reinforces the results of ‘religion’ in that Chinese-ness diminishes while Australian-ness increases in the 2nd gen. However, if this trend continues into the 3rd gen. and future generations, will they become real ‘Aussies’ and the Chinese-ness disappear totally?
Start of Business
Higher percentage in 1st gen. 1st gen. start their businesses more than the 2nd gen., while more 2nd gen. follow into family business (as can be seen above)
Cross-tabulation
Good significant differences in 4 areas: Industry, religion of respondents, spirituality and ‘own your business’
Results are strong and supportive
The results above show strongly that changes have already occurred within two
generations. This fast pace is due to a sharp contrast between the Chinese and the
Australian cultures which at opposites ends; such adaptation will not be as obvious if the
host country has fewer cultural differences. The changes involved include: the types of
business, the resources available (human and social capital), business style (partnership),
targeted businesses and customers (future expansion), religion and business set-up.
However, the familial support and connection (both Confucian piety and guanxi
connections) are still important in influencing the pathways of entrepreneurship in the
setting up and running of businesses.
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Chapter 7
Analysis - The Five Dimensions of Chinese Ethnic Entrepreneurship
7.1 Introduction
In this chapter, the analysis is presented in a structured manner according to the sequence of
the sections in the questionnaire survey (as was done in sections 6.2 to 6.12). The analysis
reflects on the five dimensions of the Chinese entrepreneurs. Each section of the five
dimensions begins with a brief introduction reflecting the variables investigated, followed
by the analysis. The analysis is interpreted and the results are reported in chapter 8, when
the hypotheses of the study are tested and the overall results are discussed.
7.2 Dimension 1 – Background of the Entrepreneurs
To be able to effectively develop a holistic picture of immigrant Chinese entrepreneurs and
provide an understanding of their entrepreneurial behaviour, it is important to be aware of
their background and answer the questions: What resources do these Chinese entrepreneurs
rely on? What are the factors influencing the business setup? Do they seek assistance from
others? There is significant evidence in literature that entrepreneurial behaviours make a
fundamental contribution to enterprise set-up and development. In view of this evidence,
attempts have been made by several researchers in entrepreneurship literature to develop a
typical profile of entrepreneurs. However, the debate is whether this generalization can
apply to Chinese entrepreneurs, especially when the entrepreneurial behaviours can be
affected by cultures, environments and the host country.
This section therefore presents the analysis of the background factors (variables) of the
Chinese entrepreneurs in Box Hill and how these factors influence the conduct of their
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businesses. The variables investigated in the study, as shown in Diagram 7.1 below, are the
views of the Chinese entrepreneurs on such things as role models, assistance from friends,
better education, financial assistance, personal expertise, decision making, pre-business
work experience, and passion. At the end of the section a profile of the background of the
entrepreneurs supporting business set-up, which is unique to the Chinese entrepreneurs in
Box Hill, is developed.
Dimension 1 (Group 1 questions in Part 2 Questionnaire) –
Diagram 7.1 Factors Influencing the Background of Chinese Entrepreneurs
7.2.1 Guanxi connections
Role Models
Chinese culture regards role models as one of the most important factors in the learning of
‘doing business’ with others (Chen and Chen 2004). Whilst ‘role model’ is a difficult
Role Model Assistance from friends Better education Financial assistance from others
Personal expertise Independent decision making Work experience Passion
Prior Experience
Guanxi Connection
Background of Chinese Entrepreneurs
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notion to define, and can occur at both a formal and informal level, it is generally accepted
as the provision of advice, expertise and support by an experienced ‘role model’ or a
‘mentor’ to a less experienced person, to assist them in achieving their goals. First of all the
pilot test of the questionnaires showed that the two terms ‘mentor’ and ‘role model’ were
used interchangeably by the respondents and meant the same thing to them. Therefore, in
this analysis only ‘role model’ was used. Questions were asked in relation to role models to
determine what pertains to the Chinese entrepreneurs in Box Hill.
Overall, 85 percent of the respondents place ‘role model’ as ‘important’ or above. The
result further indicated that among the first generation entrepreneurs, the proportion is 78.7
percent. Among the second generation entrepreneurs, the proportion is even higher (97
percent). The benefits of the role model were perceived as ‘enormous’, with the help
coming in a mixture of encouragement and moral support, general advice and guidance,
knowledge and expertise in the industry, and help with confidence building in the industry.
These models are usually family elders and relatives. However, the existence of these
models is not common in the first generation as family ties with homeland have been
broken during migration. Conversely, the higher proportion in the second generation is due
to the continuous support of the models within the family and contact circles in Australia.
In summary, this unique type of networking has been reinforced by the collectivist nature
of the Chinese family culture. These networks play a significant role in the guanxi
connections and background of the Chinese entrepreneurs in Box Hill.
Advice from friends
The study explores further the effect of advice from friends on the business operation of
Chinese entrepreneurs. The roles of ‘friends’ are different for the two generations. Earlier
literature on enclave economy (Clark and Drinkwater 2000, Fong and Ooka 2002) indicates
that ‘ethnic enclave’ refers to a concentration of people from the same ethnic group within
a specific geographical location. In the first generation, the friendship is built on mutual
business and personal benefits. In this network, people from the same community buy or
sell ethnic products and services. The definition of ‘friends’ in the second generation may
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have changed to visiting, watching television and participating in recreational activities
without any business connection.
Most of the advice that the second generation uses is from professional advisors such as
accountants and marketing consultants, who are not necessarily their personal friends. The
uniqueness of guanxi in the first generation places a special importance of ‘friends before
business’, as can be seen in the results. The results indicate that while 83.4 percent of the
overall population chose ‘important’ or more in regards to the effect of advice from friends,
the figure in the second generation (79.4 percent) is certainly lower (85.6 percent). This
implies that the reliance on the advice from friends is lower in the second generation.
In summary, advice from friends is important in both generations. However, the importance
of ‘friends’ is different between the generations.
Better education
Traditionally, Chinese parents put all their hope and effort in the next generation and
strongly impress upon the second generation the importance of higher education (Chu
1995) so that they are motivated to become high achievers. This axiom has been planted in
their mindset from generation to generation, stimulating a strong competitive spirit. This
valuing of higher qualifications has a strong influence on second generation Chinese,
especially if the first generation has a low literacy level (Godement 1999). Education is
valued as a preparation for higher social mobility, and sufficient education or training is
one of the prerequisites to go into self-sufficiency and self-employment.
The prime aim of migration is to find a better life for the children. Chinese see providing
good education to the children as one of the most important ‘tasks’. For the entrepreneurs,
the importance of settling in Australia is to make money and provide a home for the family.
Comparatively, the importance of education for the first generation is lower, although they
view it differently for their children. Most (87.5 percent) of the respondents believed that
education is ‘important’. The second generation (94.1 percent) placed greater emphasis on
education than the first generation (84.1 percent). These results compare well with those in
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Section 6.4, where the industries that the second generation entrepreneurs choose are those
that require higher education and good academic credentials.
In summary, the results support the notion and literature mentioned earlier that better
education is an important factor in building up a better business network and a better future
for the next generations.
Financial assistance from institutes
Finance is typically perceived as the greatest single problem by ethnic minority
entrepreneurs at the start-up stage. In addition, these first generation entrepreneurs also face
problems of discrimination on the part of finance providers, with the vast majority feeling
that ethnic minorities are discriminated against to a greater extent than do small business
owners or managers in general (Waldinger et al. 1990). To counter this discrepancy, the
first generation entrepreneurs tend to obtain financing for their business from within the
family and ethnic community (Hsing 1996). This cooperative network of family and
community is the essence of their success in business. The family-based social, economic
and human resources are central to their economic and social integration in the local
Australian society.
In the second generation, with the back-up from accumulated wealth by the parents and the
establishment of local know-how, the entrepreneurs rely on the formal financial institutes
such as banks, finance companies and other venture capitalists. Different from their parents,
they seek less support from with the community. The results support this theory. Overall,
the importance of seeing financial assistance is at 88 percent for the whole population. The
results for the first and second generations are at 86.4 percent and 91.2 percent respectively.
In summary, while the importance of financial assistance is high in both generations, it is
higher in the second generation. This implies that guanxi connections have changed from
an informal establishment (through personal contacts) to a more formal one (through formal
business contacts).
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7.2.2 Prior Experience
Professional expertise
Previous studies (Brush et al. 2006; Coughlin 2002; Fielden & Davidson 2005) have
suggested that previous employment and experience in the same industry as the business
venture is a clear advantage in the entrepreneurial process and are associated with business
growth. However, Baker and Wooden (1992) found that 70 percent of migrants with
qualifications obtained overseas did not use their qualifications in their current job. The
first generation entrepreneurs are often not given the opportunity of practising their
professions because their education and experience are not recognised by the employment
institutions (Tseng 1992, Boyer 1996).
Overall, 78 percent of the whole population rated professional expertise as ‘important’.
Further analysis shows a significant difference between the two generations in placing
importance on professional expertise; 62.1 percent of the first generation, and 86.7 percent
of the second generation respondents confirmed that professional expertise is important.
The second generation entrepreneurs do not have their local qualifications queried by the
local authorities. This evidence supports the above-mentioned literature review. Compared
to the other factors, this factor shows the largest difference (24.5 percent) between the two
generations. The view of Baker and Wooden (1992) that non-recognition of qualifications
may be partly responsible for the relatively high rates of ‘invisible underemployment’
within some migrant groups is supported in this research. Chapman and Iredale (1990)
found that only 39 percent of formally skilled migrants subjected their overseas
qualifications to official assessment, and of these, only 42 percent had the qualifications
recognised as being equivalent to Australian qualifications.
In summary, professional expertise, as a factor, is an important contributor to the prior
experience of the entrepreneurs. The difference is the recognition of their qualifications and
skills by the local authorities.
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Independent decision making
Independent decision making style and power are the two main attractions that
entrepreneurs seek to obtain during the entrepreneurial process (Osborne 1995). In fact,
Yusuf (1995) suggested that independent decision making and self-confidence are the
business characteristics frequently displayed by individual successful entrepreneurs.
The results are similar in both generations (84.8 percent in the first generation and 89.7
percent in the second generation). Although the importance of independent decision is high
(86.5 percent) in the whole population, the proportion is slightly higher in the second
generation. Considering that the second generation has no language barrier or difficulty in
adjusting, it can be implied that these entrepreneurs are more self-confident in making their
own decisions. This decision making style will build up self-confidence, and, hence, help
the entrepreneurs gain work experience and business knowledge.
In summary, the independent decision making factor is important in building up work
experience that facilitates future business set-up in both generations.
Prior entrepreneurial experience
Prior entrepreneurial experience (may not be in the same fields that the immigrants are
experienced in) influences the way entrepreneurs comprehend, extrapolate, interpret and
apply new information, which those lacking it cannot duplicate (Roberts 1991). It helps
entrepreneurs appreciate the value of new information. It influences individuals’
willingness and ability to make new connections among pre-existing ideas, as well as with
new ideas, allowing them to recognize opportunities.
Given their responses to a previous question in section 7.2.1 regarding the importance of
role models, it is not surprising that the majority of the respondents rate their prior
entrepreneurial experience highly in this section. The results are 92.5 percent for the whole
population. Separately, they are 91.7 percent for the first generation and 94.2 percent for
the second generation. It is also noteworthy that this experience is rated as very important
and is an influential source of learning that parents may somehow be instilling in their
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children, possibly by providing work experience at a young age, or through exposing their
children to the entrepreneurial lifestyle and the social networks tied to their businesses
(Carroll and Mosakowski 1987).
In summary, this finding also coincides with earlier studies in the literature, which
emphasize that entrepreneurs are four times more likely to have been subject to the
influences of an entrepreneurial parent (Robert 1991).
Passion to succeed
Among all personal reasons that are strong motivators for business ownership, passion
includes self-satisfaction, desire for independence, autonomy, and achievement seeking
(Schumpeter 1979). The need to be personally fulfilled is the passion to succeed. It can be
gained by learning from others and by personal experience of business ownership.
The results show that 90.5 percent of the whole population rated passion to succeed as
‘important’ or above. Separately, the results are 89.4 percent for the first generation and
92.7 percent for the second generation. The minor difference between the two generations
can be due to the fact that the second generation entrepreneurs are seeking more personal
challenges and fulfilling their lifestyle attitude towards entrepreneurship.
In summary, passion and desire to succeed is important in helping the entrepreneurs set up
a business.
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7.2.3 Summary of Dimension 1: Background of the Entrepreneurs
The following is a summary of the respondents who chose ‘important’ or higher in
dimension 1: background of the entrepreneurs.
Table 7.1 Results of Dimension 1: Background of the Entrepreneurs
Variable
Questions
% (Total Pool)
% (1st Gen)
% (2nd Gen)
Guanxi connections Role Models 85 78.8 97 Advice from friends 83.4 85.6 79.4 Better education 87.5 84.1 94.1 Financial assistance 88 86.4 91.2
Prior experience Professional expertise 78 62.1 86.7 Independent decision 86.5 84.8 89.7 Prior experience 92.5 91.7 94.2 Passion 90.5 89.4 92.7
Overall, the results show that the factors contributing to guanxi connections and prior
experience are important in both generations. In particular, the two factors role models and
professional expertise show the most differences between the first and the second
generation Chinese entrepreneurs. The differences are 18.2 percent and 24.6 percent
respectively. The difference in the role model factor is due to the lack of availability of role
models in the first generation. The difference in the professional expertise factor indicates
that the first generation’s experience of initial hardship is due to the lack of recognition of
their expertise and qualifications upon their arrival in Australian. Other results are fairly
similar in both generations, although they show slight differences. Possible explanations
have been given to show the differences in all factors.
This section therefore answers the question posed by dimension 1 of this study: ‘How
important are guanxi connections and prior experience to the background of the
entrepreneurs?’ The results show that the factors are important to the background of both
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generations of Chinese entrepreneurs. The results are summarized in the following diagram.
Diagram 7.2 Key Characteristics of Background of Chinese Entrepreneurs
7.3 Dimension 2 – Entrepreneurial Motivation
To have a better understanding of the findings of this research on Chinese entrepreneurs, it
is not only necessary to understand the importance of the background of the entrepreneurs
in the business set-up (see previous section), but also to know the motivations and
characteristics required in business.
There are several approaches to describing the entrepreneur and determining business
success. One of the approaches is based on the psychological perspective, which argues that
entrepreneurs often exhibit a typical, characteristic profile. Numerous studies on Chinese
entrepreneurs have endeavoured to develop a profile of Chinese entrepreneurs (Liang 1987,
Role Model (Less important in 1st
generation) Advice from friends (Similar in both generations) Better Education (Similar in both generations) Financial assistance from institutes (Similar in both generations)
Personal expertise (Less important in 1st Generation) Independent decision (Similar in both Generations)
Prior Entrepreneurial experience (Similar in both Generations) Passion to succeed (Similar in both Generations)
Prior Experience
Guanxi Connection
Background of
Chinese Entrepreneur
Very important in both generations
Very important in both generations
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Ahlstrom et al. 2004, Collins 2002) and establish whether a ‘typical’ profile of Chinese
entrepreneurs exists.
There is evidence in literature that the entrepreneurial behaviours make a fundamental
contribution to enterprise set-up and development. In view of this evidence, attempts have
been made by several researchers in entrepreneurship literature to develop a typical profile
of entrepreneurs. However, the debate is whether this generalization can apply to Chinese
entrepreneurs, especially when the entrepreneurial behaviours can be affected by cultures,
environments and the host country.
This section therefore presents the results of the study on the personality traits of the
entrepreneurs (divided into potential seeking and self-satisfying types). The variables
investigated in the study, as shown in the diagram below, are the views of the Chinese
entrepreneurs on, for example, (potential seeking) migration, dissatisfaction with previous
job, envy of others, profit maximization, inheritance of family business, and (self-
satisfying) freedom, desire, potential to make more money and strong belief in capability.
Based on literature on entrepreneurial motivation, Diagram 7.3 was developed; this
diagram will be refined after the research data are analysed, to provide a profile of the
entrepreneurial motivations of the two generations.
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Diagram 7.3 Variables Influencing Entrepreneurial Motivation
7.3.1 Potential Seeking
Migration, dissatisfaction with previous jobs, envy of others, and inheritance have been
identified in the literature as factors influencing Chinese entrepreneurs’ desire to seek
opportunities. In the following section, these factors will be described.
Migration
This has long been a feature of Chinese life (Wickberg 1994). However, the modern history
of China has been characterized by incessant upheaval, associated with western and
Japanese imperialism, popular rebellions, dynasty collapses and transitions, warlord
struggles, civil warfare and, most recently, the turbulent history of the Tiananmen Square
incident. Food shortages and poverty have also been perennial features of life for the
majority of the Chinese populace. Chinese are used to this political turmoil and economic
hardship (Choi 1975, Collins 1995).
Migration Dissatisfaction with previous job Envy of others Profit maximization Inheritance of family business
Freedom Desire Potential to make more money Strong belief in capability
Self Satisfying
Potential Seeking
Entrepreneurial
Motivation
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The analysis of the data shows that the population in the study supports (64 percent) that
migration was important in seeking new opportunities. Breaking down these figures shows
that 71.2 percent of the first generation and 50 percent of the second generation support
migration as a necessity for seeking new opportunities. The higher proportion in the first
generation is because migration has a direct and personal impact on their establishment of a
business.
Dissatisfaction in previous employment
This has been put forward by Wirth (2001) as one possible incentive for entrepreneurs to
move into business ownership. Another possible factor in influencing people to leave their
previous employment and pursue a business venture is slow career progression (Moore and
Buttner 1997). Hence, questions relating to dissatisfaction of the Chinese entrepreneurs in
their prior employment were asked. Analysis of the data indicates that 64 percent of the
total population in this study rated dissatisfaction in their previous jobs as a reason for
going into business in Australia. The breakdown of the analysis suggested that 63.6 percent
of the first generation and 64.7 percent of the second generation support this factor.
In summary, the results show the two generations have a minor difference in choosing
‘dissatisfaction with previous job’ as an important factor in potential seeking in their
businesses.
Envy of others and inheritance
Although these two attributes are not common in studying the personality traits of
entrepreneurs, these are characteristics of Chinese doing business (Liang 1987). The reason
for this is that they are protective of the family’s reputation and assets, and the Chinese do
not work co-operatively with others; instead, they rely on family succession to carry on the
family business.
The results for ‘envy of others’ are 74 percent for the two generations combined: 71.9
percent for the first generation and 77.9 percent for the second generation. For
‘inheritance’, the results are 64 percent for the two generations combined and 64 percent
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for each generation separately. In summary, this shows minor differences between the two
generations on these attributes.
Profit maximization
Traditional economics and entrepreneurship theories interpret the success of a business
based on its financial performance and profitability (Djik 1996). Traditionally, most
analyses reach a definition of success and failure in any entrepreneurship by looking at
different financial, quantitative measures such as income, size of firm, and the number of
employed people as the measures of achievement. Profit maximization is the ultimate goal
for potential-seeking entrepreneurs. Another unanimous explanation of the financial
reasons given for venture creation by all the respondents is that self-employment is far
more lucrative than paid employment. Results indicate 80 percent of the total population
chose the factor as ‘important’ or above. The results are 80.3 percent and 79.4 percent for
the first and second generations respectively. The analysis shows that both generations
consider profit maximization as important to them.
In summary, the analysis supports the notion that profit maximization is an important
attribute for potential seeking entrepreneurs.
7.3.2 Self-Satisfaction
Literature has identified freedom, desire to extend, potential and strong belief in oneself as
factors supporting self-satisfaction as reasons for people to become entrepreneurs. In this
section these factors will be analysed. Several studies in entrepreneurship have investigated
the individual characteristics and personality traits of entrepreneurs (McClelland 1987,
Schumpeter 1979). Although there are no hard and fast rules on the typical entrepreneurial
personality profile, these studies suggest that the common characteristics appear to be high
need for freedom, desire to extend, potential and strong belief in oneself.
A series of personal attributes were listed and the respondents were asked to rate
themselves in relation to these. In terms of their own perceptions about their personal
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attributes, the respondents rated themselves very highly on all the listed traits. The first of
these is desire to extend one’s potential (90.4 percent), followed by potential to earn more
money (91.5 percent), strong belief in oneself (93 percent) and freedom (88.5 percent). The
analysis of the data of both generations shows minor difference between the two
generations. This indicates that high importance is attributed to this factor by both
generations. This analysis supports Bennet and Dann (2000) and Kao (1991) findings that
entrepreneurship is related to the behavioural and personality traits of the individual
entrepreneur.
7.3.3 Summary of Dimension 2: Entrepreneurial Motivation
The following is a summary of the respondents who supported entrepreneurial motivation
as being very important to ethnic Chinese entrepreneurship.
Table 7.2 Results of Dimension 2: Entrepreneurial Motivation
Variable Questions % (Total Pool)
% (1st Gen)
% (2nd Gen)
Potential seeking
Migration 64 71.2 50
Dissatisfaction with previous jobs
64 63.6 64.7
Envy of others 74 71.9 77.9 Profit maximization 80 80.3 79.4 Inheritance 64 64 64
Self-satisfaction
Freedom 88.5 88.7 88.2
Desire to extend one’s potential
90.4 93.9 83.8
Potential to earn more money
91.5 92.5 89.7
Strong belief in oneself 93 93.2 92.6
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Results from migration (within the potential seeking group) show the biggest difference
between the two generations. This is understandable, as the first generation would feel
‘alienated’ in the host country while the second generation calls Australia home. According
to the push and pull factor theorists, one of the universal motivations which push the
immigrants into starting their own business ventures is the need to generate income. Many
first generation Chinese are pushed into whatever market economic activity they can take
up. The changing nature of government programmes, coupled with the lack of opportunity
for entry-level work in Australia, has led these immigrants to view entrepreneurship as the
best way out of the permanent cycle of poverty (Choi 1975, Collins 1991, Strahan and
Luscombe 1991). Hence, this factor is more important in the first generation entrepreneurs.
Personal motivation is another category of motivators embedded in the push and pull factor
theory; they include the desire for autonomy and to control one’s destiny, and the need to
be personally fulfilled. The motivation for self-satisfaction is very strong. Entrepreneurship
has provided an opportunity for the immigrants to discover a new-found sense of
accomplishment in supporting themselves instead of relying on being employed by others
and government welfare systems. Furthermore, when the motivations ‘potential seeking’
and ‘self-satisfaction’ are compared, the latter has a higher importance in becoming
entrepreneurs. This higher importance can be found in both generations. This implies and
agrees with the notion that all entrepreneurs place a higher importance on satisfying their
own dreams and goals in successful entrepreneurship.
This section therefore answers the question posed by dimension 2 of this study: ‘How
important are potential-seeking and self-satisfaction to entrepreneurial motivation?’ The
results show that although both factors are important to entrepreneurial motivation in both
generations of Chinese entrepreneurs, the entrepreneurs place a higher importance on
attributes of self-satisfaction. The results are summarized in the following
diagram.
200
Diagram 7.4 Key Characteristics of Entrepreneurial Motivation
7.4 Dimension 3 – Traditional Confucian Values
To have a better understanding of the findings of this research on Chinese entrepreneurs, it
is also necessary to find out the cultural values that influence entrepreneurship. Research
has revealed that even in overseas Chinese family businesses, the most important family
values are based on Confucian piety (Jacobs et al. 1995; Lee J 1996). These Chinese family
values and interpersonal patterns contribute to business development and success. The
extent of its influence and its incorporation builds a tight matrix between the culture and the
psychological character of the people. Hence, the influence of these values cannot be
ignored, and they should not be studied independently. The emphasis here is to highlight
their influence on Chinese familial values and the social roles of individuals. Confucianism
has been woven into the very fabric of Chinese society. Although it is not a religion, it
continues to exert a major influence on the everyday lives of Chinese people (Jabobs et al.
1995, Chan 2008).
Migration (less important in 2nd gen.) Dissatisfaction with previous job (less important in 2nd gen.) Envy of other (similar) Profit maximization (similar) Inheritance (same)
Freedom (similar in both Generations) Desire (less important in 2nd generation) Potential to make more money (similar in both generations) Strong belief in capability (similar in both generations)
Self Satisfying
Potential Seeking
Entrepreneurial
Motivations
Higher importance on self-satisfaction factor in both
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This section therefore presents the results of the study on the importance of various
traditional Confucian values to Chinese entrepreneurship. The variables investigated in the
study, as shown in Diagram 7.4 below, are the views of the Chinese entrepreneurs. At the
end of the section a profile of traditional Confucian values important in this research to the
two generations will be presented.
Diagram 7.5 Variables Influencing Traditional Confucian Values Important to Chinese Entrepreneurship in Australia
7.4.1 Traditional Confucian Values
As has been pointed out in earlier sections, the interrelationship between the dimensions
and how they contribute to business success among immigrant Chinese is a major thrust of
this research. The interrelationship has to be looked at as a whole in order to better
understand how the Chinese entrepreneurs operate. The influences of the traditional
Confucian values are an important input to understanding this phenomenon. In this context,
Traditional Confucian
Values
Guanxi connections
Family involvement
Community guanxi
Head of family
Advice from elders
Traditional wisdom
Helping other Chinese
Racial discrimination
Trust in others
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the attributes studied are guanxi connections, family involvement, community guanxi, head
of family, advice from elders, traditional wisdom, helping other Chinese, racial
discrimination and trust in others. Previous literature has already pointed out that these are
Chinese characteristics and they are related to each other, under the same Confucian
teaching. The results below show that the importance is high across the two generations.
Table 7.3 Results of Dimension 3: Traditional Confucian Values
Attributes % (Total Pool) % (1st Gen) % (2nd Gen)Guanxi connections 90 88.6 92.6
Family involvement 83.5 83.4 83.9
Community guanxi 77.5 78 76.4 Head of family 75 75.8 73.5
Elder advice 72.5 77.3 63.3 Traditional wisdom 85.5 86.4 83.8
Helping other Chinese 81.5 86.4 72.1 Racial discrimination 78.5 75.8 83.8
Trust in others 83.5 96.2 79.4
The descending order of the results (two groups combined) is: guanxi connections (90
percent), traditional wisdom (85.5 percent), family involvement and trust in others (83.5
percent), Helping other Chinese (81.5 percent), racial discrimination (78.5 percent),
community guanxi (77.5 percent), head of family (75 percent) and advice from elders (72.5
percent)
However, this order changes significantly in the first generation: trust in others (96.2
percent), guanxi connection (88.6 percent), traditional wisdom and helping other Chinese
(86.4 percent), family involvement (83.4 percent), community guanxi (78 percent), advice
from elders (77.3 percent), racial discrimination (75.8 percent) and head of family (75.8
percent).
203
The order changes again in the second generation: guanxi connections (92.6 percent),
family involvement (83.9 percent), traditional wisdom and racial discrimination (83.5
percent), trust in others (79.4 percent), community guanxi (76.4 percent), head of family
(73.5 percent), helping other Chinese (72.1 percent) and advice from elders (63.3 percent).
7.4.2 Summary of Dimension 3: Traditional Confucian Values
In summary, the analysis shows the high importance of these attributes to the respondents.
However, of all the Chinese traditional values being investigated, three variables show a
difference between the generations:
• Advice from elders – decreases from 77.3 percent to 63.3 percent (from first to
second generation)
• Helping other Chinese – decreases from 86.4 percent to 72.1 percent (from first to
second generation)
• Trust in others – decreases from 96.2 percent to 79.4 percent (from first to second
generation).
This finding is important because, while guanxi connections (on both personal and
community levels) remain the same in both generations, the ratings of the importance of the
three mentioned variables have dropped significantly. The possible explanation is that the
second generation is becoming more independent (see results in section 7.2.2 ‘independent
decision making’) and taking less advice from friends or relatives (see similar results in
section 7.2.1 ‘advice from friends’); they have become more self-confident and more
willing to take advice from professionals.
In summary, all attributes remain major contributors to the traditional Confucian values that
are important to the immigrant entrepreneurs in Australia, though the first generation places
greater emphasis thereon compared to the second. This section therefore answers the
question posed by dimension 3 of this study: ‘How important are the attributes of
204
traditional Confucian values to Chinese entrepreneurship in Australia? The analysis is
shown in Diagram 7.5.
Diagram 7.6 Key Characteristics of Traditional Confucian Values Important to
Chinese Entrepreneurship in Australia
Traditional Confucian
Values
Guanxi connections (most important in both
generations) Family involvement
(Similar in both generations)
Community Guanxi (Similar in both
generations) Head of family (Similar in both
generations) Elderly advice (Less important in the 2nd
generation) Traditional wisdom
(Similar in both generations)
Helping other Chinese (Less important in 2nd
generation) Racial discrimination
(Similar in both generations)
Trust in others (Less important in 2nd
generation)
All attributes are important to both generations
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7.5 Dimension 4 – Difficulties and Hurdles
To have a better understanding of Chinese entrepreneurs in Australia, the views and
attitudes of the Chinese entrepreneurs in regard to difficulties and hurdles that they face
during the entrepreneurial process is important. This section is divided into eight
subsections as follows: assimilation, business set-up, bureaucracy and regulation, personal
hurdles, external hurdles, business management, adaptive opportunism and financial
rewards. These attributes may overlap and some of them may look similar to other
questions. However, the importance of re-grouping these attitudes reflects the importance
and influence of these factors on the entrepreneurs. These are represented by Diagram 7.7.
Diagram 7.7 Variables Contributing to Difficulties and Hurdles Impacting Chinese
Entrepreneurship
Difficulties and
Hurdles
Assimilation
Business set-up
Bureaucracy &
regulation
Personal hurdles
External hurdles
Business management
Adaptive opportunism
Financial rewards
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7.5.1 Assimilation
Assimilation
This has long been a subject of sustained empirical and theoretical attention, and immigrant
entrepreneurship has become part of the classic agenda (Light and Gold 2000, Waldinger et
al. 1999, Light and Rosenstein 1995). For migrants, even though the speed of social and
cultural change varies from person to person and for some the change occurs quickly,
people tend to retain their ethnic identity despite having moved to a new environment
(Eriksen 2002). However, assimilation into the host society will certainly enhance the
survival and development of the enterprises, whether they are carried out by first or second
generation entrepreneurs.
In this study, results show high importance for assimilation in all entrepreneurs: difference
in culture (84.5 percent), difference in business practice (83 percent), recognition of skills
(86 percent), acceptance by Australia (88 percent) and adoption of Australian ways (86.5
percent). The differences between the generations are minimal. This suggests not only that
assimilation is an important factor, but also that both generations place a high importance
on this factor during the entrepreneurial process.
7.5.2 Business Set-up
Business set-up
Set-up includes the ‘resource-base factors’ such as location, funds, business skills,
employees, education, power sharing and initial financial back-up. The literature in
previous sections has shown that these are also related to business skills, previous history
and entrepreneurial experiences. This supports the notion that these attributes also
contribute to growth and the success of business ventures. Success depends on how well the
organization balances sound financial back-up and efficient management; and failure tends
to fluctuate between lack of funding and poor management.
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Results for the attributes have been ranked (in descending order) for the combined group:
location (96 percent), employees (95.5 percent), business skills (93.5 percent), funds (93
percent), power sharing (90 percent), education level (88.5 percent) and initial financial
back-up (84 percent). They all show high importance among all attributes. Location and
employees are the two most important contributors to the success of good business set-up.
The results are supportive of enclave economy theory, where businesses and customers
cluster to facilitate the exchange of goods and services.
Results for the two generations show no differences, except in power sharing (87.2 percent
in the first generation and 75.3 percent in the second generation). This implies good
business set-up is important in reducing difficulties and hurdles encountered by both
generations, and the attributes are closely related. The minor difference in power sharing
may be due to differences of staff association; that is, there is more personal and family
orientation in the first generation.
7.5.3 Bureaucracy and Regulation
Bureaucracy and regulation
Legal and bureaucratic matters can be burdens that affect all new and existing enterprises.
They may be the factors encouraging entrepreneurs to engage in informal sector activity as
a means of avoiding their influence. In the west, one will argue constantly about what legal
and political systems are the right ones, how the details of these systems should be
organized and implemented, and what rights and protections one ought to have. The
assumption behind the whole discussion is that there is a system: a legal and philosophical
framework, fairly clearly delineated, within which everyone can work. This is contradictory
to the traditional practice of average Chinese entrepreneurs. Throughout the whole of
Chinese history, regulatory bodies, of any kind, of professions, industries and developments
do not exist. The skills acquired by different professions are, in fact, similar to the
Australian apprenticeship system.
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The analysis of the data for the attributes identified for this factor is (two groups
combined): state government (75 percent), federal government (80 percent), local
government (77.5 percent), government bureaucracy (82.5 percent), unionism (72.5
percent) and workplace agreement (81.5 percent). Results for the combined groups show
that these are rated as being of average importance. This supports the above notion that the
Chinese entrepreneurs engage in informal sector activity as a means of avoiding the
influences of bureaucracy and regulation, due to lack of understanding and adoption of
local rules and regulations. At the same time, the drop in importance of these attributes in
the second generation (an average of 5 percent difference) also supports this notion, as the
second generation entrepreneurs have better language skills than their parents.
7.5.4 Personal Hurdles
Personal hurdles
These include language barrier, long working hours and gambling. The attributes are
strongly related to Chinese entrepreneurs. Language is at the heart of adjusting to a new
country for most migrants, especially the first generation. The significance of language in
migrants’ settlement is affirmed by sociologists, economists, linguists, and by migrants
themselves (Burnett 1998). The first generation should have more language difficulties than
the second generation.
The hard-working and conscientious attitude among Chinese is a well-known characteristic,
especially long working hours. This hard-working attitude comes from a desire for success
as they seek promotion and positions of authority. Chinese are also renowned for their
interest in gambling. The mentioned three attributes are characteristics of Chinese.
The results are different from other factors in this section. As can be seen in earlier results,
the rankings and importance of the attributes are, on average, ‘similar’. Here, the results for
the combined group are language barrier (73 percent), long working hours (85 percent) and
gambling (57 percent). The results based on two separate generations are different:
language barrier (80.3 percent in the first generation and 58.8 percent in the second
209
generation). The results support the earlier explanation that the first generation rates this
language barrier attribute at ‘high importance’. With respect to long working hours, both
generations (86.4 percent in the first generation and 82.4 percent in the second generation)
place this attribute at ‘high importance’; this is one of the characteristics of Chinese
entrepreneurs. Results for gambling show 61.3 percent for the first generation and 48.6
percent for the second generation; the drop in importance can be due to better educational
background, more vocational activities and less boredom among the second generation
entrepreneurs.
7.5.5 External Hurdles
External hurdles
These are difficulties related to community support, locality, family history, return to the
home country, financial assistance, Chinese competition, and parents’ influence. These
factors influence the running of the businesses. These can also be resource-based factors
found in human, financial and social capital. Immigrant enterprise development depends on
being the ‘middleman minority’, which is based on the opportunity structure and operating
environment. The set-up and the running of the businesses have gradually changed in such
ways that external assistance and help are sought to deal with larger issues and problems.
This is due to the increase in the complexity and the size of the organizations.
Results in the combined group for these factors are: Chinese competition (85 percent),
locality and financial assistance (82.5 percent), community support (81.5 percent), parents’
influence (75.5 percent), return to the home country (74.5 percent), and family history (74
percent). Factors which are business-related are above 80 percent; factors which are
personal-related are below 80 percent. This analysis of the data shows that the factor for
external hurdles is more related to financial and social capital. Results for both generations
are similar and do not show significant differences.
210
7.5.6 Business Management
Business management
This has been mentioned in literature (Yusuf 1995) as one of the business characteristics
frequently displayed by individual successful entrepreneurs. Chinese family business style
is a closed circuit style, in which any decision-making does not go beyond the boundary of
the family. Trust and ‘sense of belonging’ are the two major factors in determining further
working relationship in the business. The entrepreneurship and management literature
highlight the fact that human capital is a crucial factor in enterprise establishment,
influencing business success. Resource-based theorists propose that an entrepreneur’s
human capital is comprised of management skills.
Results for the combined groups are: organisation skills and staff management (93.5
percent), expansion (93 percent), marketing planning (91 percent), sound accounting (87
percent), niche products (84.5 percent). All these attributes are given ‘high importance’. In
fact, the results for the two generations are similar, with only minor differences. This not
only supports that the Chinese entrepreneurs recognize the importance of these attributes
contributing to good business management, but also that these Chinese put efforts into
expanding the businesses outside the boundary of the family circle. By adopting good
business management skills, both generations place the ‘high importance’ of this factor on
the agenda of successful business.
7.5.7 Adaptive Opportunism
Adaptive opportunism
Flexible solutions and skills are needed to deal with the difficulties and hurdles of the
entrepreneurial process. While it is one of the management skills exhibited by
entrepreneurs, it is also a representation of being creative and innovative when dealing with
exploring new grounds for businesses. Success depends on how well the organization
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balances innovation and conservatism, and failure tends to fluctuate between high levels of
innovation and excessive stagnation (Miller and Friesen 1983).
Results for the combined groups are: cut-price strategies (80.5 percent), continuing
education (80 percent), fusion style (78.5 percent), cheaper imports and regulation issues
(78 percent), workplace reform (70.5 percent). Although the attributes show ‘importance’,
the results are not as high as for the business management factor mentioned in the above
section. Adaptive opportunism may be more concerned with the expansion and potential
growth of the businesses. The results for the two generations are similar. The only notable
discrepancy is workplace reform (65.9 percent in the first generation and 79.2 percent in the
second generation). This can be explained by the fact that the first generation Chinese
entrepreneurs may engage in informal sector activity as a means of avoiding the influence
of workplace-related bureaucracy and regulation.
7.5.8 Financial Rewards
Financial rewards
Profit can indicate how successful a business is. The attractiveness of the potential to gain
more monetary reward is one of the important factors in the consideration of being an
entrepreneur. Business success is determined by financial indicators including growth rates,
business size, turnover, profitability and the number of people employed. Consequently, the
ways to maximize the profits become an important factor since they are related to business
success.
Results for the combined group are: tax (91 percent), increase in profit and better business
knowledge (86 percent) and Australian competition (84.5 percent). These attributes are
ranked at ‘high importance’ for the financial rewards factor, which in turn is a factor of
difficulties and hurdles in the entrepreneurial process. There are differences between the
two generations in the tax factor (93.2 percent in the first generation and 86.8 percent in the
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second generation); this can be due to a higher taxation rate in Australia than in other Asian
countries (e.g. the personal and company tax rate in Hong Kong is a flat rate of 15 percent).
Other attributes show similar results. The results have been tabulated and highlighted as
follows:
Table 7.4 Results of Dimension 4: Difficulties and Hurdles
Variables Questions % (Total Pool)
% (1st Gen)
% (2nd Gen)
Assimilation Difference in culture 84.5 85.6 82.3 Difference in business practice 83 84.1 80.8 Recognition of skills 86 84.1 89.7 Acceptance by Australia 88 88.7 86.7 Adoption of Australian ways 86.5 85.6 88.3
Business set-up Location 96 96.2 95.6 Funds 93 92.4 94.1
Business skills 93.5 92.4 95.6 Employees 95.5 96.2 94.2 Education level 88.5 87.9 89.7 Power sharing 82.5 87.2 73.5 Initial financial back-up 84 84.8 82.4
Bureaucracy & regulation
State government 75 77.3 72
Federal government 80 83.3 73.6 Local government 77.5 79.5 73.6 Government bureaucracy 82.5 84.1 79.4 Unionism 72.5 70.4 73.6 Workplace agreement 81.5 81.1 82.3
Personal hurdles Language Barrier 73 80.3 58.8 Long working hours 85 86.4 82.4 Gambling 57 61.3 48.6
External hurdles Community support 81.5 80.4 83.8 Locality 82.5 83.4 80.8
Family history 74 71.8 79.4
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Return to home country 74.5 74.2 75 Financial assistance 82.5 78.8 89.7 Chinese competition 85 82.5 89.7 Parents’ influence 75.5 74.2 77.9
Business management
Organization skills 93.5 91.6 92.1
Staff management 93.5 93.2 94.2 Marketing planning 91 89.4 94.2
Expansion 93 92.4 94.1 Niche products 84.5 84.9 83.8 Sound accounting 87 84.8 91.2
Adaptive opportunism
Workplace reform 70.5 65.9 79.2
Continuing education 80 78 83.8 Regulation issues 78 77.3 79.4 Cheaper imports 78 76.6 80.9 Fusion style 78.5 78.3 77.9 Cut-price strategies 80.5 80.4 80.8
Financial rewards Increase in profit 86 85.6 86.8 Tax 91 93.2 86.8
Better business knowledge 86 84.1 89.7 Australian competition 84.5 81.8 89.7
7.5.9 Summary of Dimension 4: Difficulties and Hurdles
In summary, the questions supporting the variables show ‘similar’ or ‘no difference’ in the
data of the two generations. This implies that the views and attitudes towards difficulties
and hurdles encountered during the journey of entrepreneurship are the same for both
generations. Only three factors show differences between the two generations:
• Language barrier – a decrease from 80.3 percent to 58.5 percent. This is self-
explanatory, as the second generation grew up in an English-speaking society in
which they spend most of the time speaking and writing in English. The language
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barrier does not exist in their daily living, learning and working.
• Gambling – a decrease from 61.3 percent to 48.6 percent. While this factor is not
important in the study, it points out that the gambling factor plays an even weaker
role in the second generation. Traditionally, Chinese have a reputation for
gambling; however, the shift in the importance of this factor indicates that 1, the
effect is diminishing; 2, the influence of this traditional hobby is less in Australia
among the second generation entrepreneurs.
• Workplace reform – an increase from 65.9 percent to 79.2 percent. Presumably,
instead of being restricted to the Chinese community in the first generation, the
second generation businesses mix more with the general public, and the dealings
with the Australian workforce and Australian customer base are more frequent and
involved. Consequently, the importance of reform is higher in the second
generation.
In summary, all attributes remain major contributors to the difficulties and hurdles, and the
results show the high importance of all factors. This section therefore answers the question
posed by dimension 4of this study: ‘How important are the difficulties and hurdles factors
to the success of Chinese entrepreneurship in Australia?’ The results are shown in Diagram
7.8.
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Diagram 7.8 Key Characteristics of Difficulties and Hurdles Impacting Chinese Entrepreneurship
Difficulties
and Hurdles
Assimilation (Similar in both
generations) Business Set-up (Similar in both
generations) Bureaucracy &
Regulation (Similar in both generations) Personal Hurdles (Similar in both
generations) External Hurdles (Similar in both
Generations) Business Management
(Similar in both generations)
Adaptive Opportunism (Similar in both
generations) Financial Rewards
(Similar in both generations)
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7.6 Dimension 5 – Overseas Expansionary Vision This section develops a detailed understanding of the vision of the entrepreneurs in
expanding into overseas markets, which is seen as an important aspect of Chinese
entrepreneurial development in Australia. Furthermore, to develop a detailed picture of the
business ventures of the Chinese entrepreneurs, knowledge is sought about the international
markets as a means of expansion. This is to assist in understanding the reach, depth and
profile of the businesses.
Overseas business connections are important in creating new businesses for local firms
(Zhou 2004, Yeung 1999, Tsang 1998). A vision to utilize the advantage of these
connections is a form of innovation. However, the vision is not just about money. These
first and second generations are bearers not just of the new ways, but also of the old – of the
dominance of family, clan and village; the importance of face; the predominance of values.
They are a root that has not been cut back, a place where ‘blood is truly thicker than water’.
This section therefore presents the results of the study on the possible factors and attributes
of the overseas expansionary vision that these Chinese have. Details of descriptions of their
business activities will be reported on, as well as the trading patterns, overseas connections,
cheaper supplies, potential to make more money and satisfaction dealing with overseas
people.
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Diagram 7.9 Variables Influencing Overseas Expansionary Vision
7.6.1 Overseas Expansionary Vision Similar to the explanation given in section 7.3, the analysis of overseas expansionary vision
requires study of the matrix as a whole in order to have a better understanding of the
influences of these attributes since they can influence each other: anything-is-possible
attitude, borderless trading, attractive overseas market, more travel, overseas connection,
cheaper supplies, potential – more money, and more satisfaction. Previous literature
(Pooking & Skeldon 1994) has already showed that the first generation Chinese
entrepreneurs facilitate the exchange of ideas, goods and service, and they form the bridges
between different countries.
Overseas Expansionary
Vision
Anything-is-possible
Borderless trading
Attractive overseas
market
More travel
Overseas connection
Cheaper supplies
Potential – more
money
More satisfaction
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The results have been tabulated as follows:
Table 7.5 Results of Dimension 5: Overseas Expansionary Vision
Questions
% (Total Pool)
% (1st Gen)
% (2nd Gen)
Anything-is-possible 88 87.1 89.7 Borderless trading 87.5 84.1 94.1 Attractive overseas
market 83.5 81.1 88.3
More travel overseas 80.5 86.3 69.2 Overseas connection 82.5 80.3 86.8
Cheaper supplies 85.0 86.4 82.4 Potential to earn more
money 88.5 94.7 76.4
More satisfaction 87.0 84.9 91.1
Anything-is-possible
This attitude is similar in both generations (87.1 percent and 89.7 percent). It represents a
strong support of creativity and innovation in the entrepreneurial process. This is similar to
the results of section 7.3.2 (desire to extend one’s potential and strong belief in oneself), of
which the attributes are typical and characteristic of being an entrepreneur in both
generations.
Borderless trading
This behaviour facilitates the exchange of goods and services; it is an important attribute
helping the entrepreneurs expand their businesses both locally and internationally. The
willingness of the Chinese entrepreneurs to consider this attribute is because of the overseas
connection and the growing importance of the Chinese economy nowadays. The results
show high importance in both generations (84.1 percent and 94.1 percent), with 87.5
percent for the combined group.
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Attractive overseas market
This element of business is important in providing potential for entrepreneurs. The growing
expansion of quality Australian exports to foreign countries becomes an important factor in
considering expanding businesses overseas. Conversely, the sheer size of the population of
China and other Asian countries provides tourists and business seekers from overseas. Once
again, the results show that high importance is attached to this (83.5 percent for the
combined group, 81.1 percent for first generation and 88.3 percent for the second
generation).
Travel overseas
This is a major criterion of doing business in Australia, as it is a big country. To enable
businesses to grow, travelling is required, especially interstate. Nowadays, travelling
overseas is required as globalization opens new markets for all countries. At the same time,
the ease of telecommunication helps to facilitate the exchange of information. Results from
the combined group show a high 80.5 percent, and the results for the first and second
generation are 86.3 percent and 69.2 percent respectively (see below for more explanation).
Overseas connection
This gives the Chinese a strong advantage over Australians. The analysis of the data shows
that there is a slight difference between the two generations, with 82.5 percent for the
combined group, 80.3 percent for the first generation and 86.8 percent for the second
generation. This can be explained by the fact that the second generation entrepreneurs can
gain their overseas connection via internet enquiries, communications and networks
through other non-Asian countries such as India, the UK and the USA. This supports once
again the importance of borderless trading.
Cheaper supplies
Such cost saving is a major inducement for entrepreneurs to purchase from overseas, where
the manufacturing costs are lower. Literature (Lee 1996) supports this trend. China and
India have been the countries supplying cheaper goods to Australia; this cost-cutting
effectiveness is a management skill exhibited by entrepreneurs. Results indicate a fairly
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even proportion across the cases (85 percent for the combined group, 86.4 percent for the
first generation and 82.4 percent for the second generation).
Potential to earn more money
Earning more money is listed as the prime motivation of all businesses. The potential to
make more money overseas is a combination of other attributes mentioned in this section.
The results show this as the attribute of highest importance (88.5 percent for the combined
group and 94.7 percent for the first generation). A big difference in the second generation
(76.4 percent) indicates that while it is important to seek more money overseas, the second
generation is also confident of achieving the same result locally.
More satisfaction
Entrepreneurs enjoy the self-satisfaction or self-fulfilment gained in doing business. This
can be seen as a personality trait which influences the desire and passion needed for
business. The results show a higher importance in the second generation (91.1 percent) than
the first generation (84.9 percent). The overall result for the combined group is 87 percent.
7.6.2 Summary of Dimension 5: Overseas Expansionary Vision In summary, both generations place high importance of the factors supporting overseas
expansion. The rankings of the factors (two groups combined) are: potential – more earning
(94 percent), anything-is-possible (88 percent), borderless trading (87.5 percent), more
satisfaction (87 percent), more travel (86.5 percent), cheaper supplies (85 percent),
attractive overseas market (83.5 percent), overseas connection (82.5 percent). This implies
that Chinese entrepreneurs treat the overseas market as a new market in which to invest
time and money. However, there are a few differences between the two generations, as
follows:
• Borderless trading –an increase from 84.1 percent to 94.1 percent. With no language
difficulty and better Australian-rooted connections, the second generation places a
higher importance on borderless trading with partners from overseas because of
easier communication and better technology during the dealings.
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• More travel –a decrease of 86.3 percent to 69.2 percent from the first to the second
generation. Contrary to the fact that the second generation is younger and more
mobile than the first, the second generation uses computers for contacts and spends
more contact time in Australia. China, the biggest exporter in the Asian region, is
more attractive to the first generation entrepreneurs, who prefer to deal with the
homeland. Such a decrease also indicates a preference in the way that the two
generations do business.
• Potential to earn more money–a decrease from 94.7 percent to 76.4 percent. This
implies that the first generation believes that there is a higher potential for making
money overseas than locally. Conversely, the second generation place less
significance on ‘overseas markets’. In turn, this means the second generation
entrepreneurs are more confident of making more ‘potential’ money locally than in
the overseas market, as they will have more ‘local’ advantages in Australia.
In summary, the analysis of the data has provided insights into the attributes supporting
overseas expansionary vision. This section therefore answers the question posed by
dimension 5 of this study: ‘How important are the attributes influencing overseas
expansionary vision to Chinese entrepreneurship in Australia?’ The results are shown in
Diagram 7.9.
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Diagram 7.10 Key Characteristics of Overseas Expansionary Vision
7.7 Summary In summary, the chapter has analysed and discussed the five dimensions and associated
variables in this research. The variables within each of the five dimensions of the Chinese
entrepreneurs have been explored, and the key characteristics arising from these results and
findings highlighted. All factors contributing to the five dimensions in this study are
Overseas
Expansionary Vision
Anything-is-possible (Similar in both
generations) Borderless trading
(More important in 2nd generation)
Attractive overseas market
(Similar in both generations)
More travel (More important in 1st
generation) Overseas connection
(Similar in both generations)
Cheaper supplies (Similar in both
generations) Potential to make more money (More important
in 1st generation) More satisfaction (Similar in both
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supported by the empirical data. Analysis of the whole population provides general
information about Chinese entrepreneurship in Melbourne. The importance of these factors
has been shown in previous sections.
Further comparison of the two generations gives more detailed and meaningful support to
the shift of entrepreneurial behaviour, characteristics, decision making, business style and
overseas expansionary vision from the first to the second generation. The differences
between the two generations have been explained in detail with the support of numerous
studies. The results have built up a holistic picture of the Chinese entrepreneurs in
Melbourne across five key areas, namely the background of the entrepreneurs,
entrepreneurial motivation, traditional Chinese values, difficulties and hurdles, and
overseas expansionary vision. The similarities and differences in the results of this study
with the findings of previous studies and the literature on entrepreneurship have been
highlighted accordingly. The connections of these links (5 dimensions) to the creation of
successful entrepreneurs can now be established and this is proposed in the next chapter.
In the next chapter, the results and findings are discussed and integrated to test the five
hypotheses of the study. Also, a general discussion of the overall findings follows the
testing of the hypotheses in the same chapter. This will provide answers to the five research
questions and lead to the development of a profile of Chinese entrepreneurs across these
five key dimensions and the two generations.
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Chapter 8
Testing of Hypotheses and Discussion of Results
8.1 Introduction The previous chapter presented a detailed report on the analysis of the survey. This chapter
will further integrate these findings to test the five hypotheses of the research, and then
discuss in a broad context the overall results of the study. The hypotheses of the study are:
H1. The background of the entrepreneurs is related to the success of their businesses.
H2. Entrepreneurial success is related to the motivation of the entrepreneurs. H3. Entrepreneurial success of the Chinese is related to traditional Confucian values.
H4. Entrepreneurial success is related to the difficulties and hurdles experienced by the
entrepreneurs.
H5. Entrepreneurial success is related to the overseas expansionary vision of the
entrepreneurs.
From these hypotheses, the measure of success of the Chinese entrepreneurs in Box Hill is
identified as the dependent variable of the study. The success measures are highlighted in
the analysis chapters of 6 and 7. They are:
• Intrinsic factors including guanxi connections and prior experience that
determine the success of business set-up;
• Personal success factors including self-satisfaction and potential-seeking that
determine entrepreneurial motivation;
225
• Confucian piety as an important traditional Confucian value in the
entrepreneurial process;
• Extrinsic factors, including personal hurdles, external hurdles, adaptation,
business set-up, bureaucracy and regulation, incorporate the difficulties and
hurdles faced by the entrepreneurs;
• Financial contributing factors including business management, adaptive
opportunism and expansionary vision determine the overseas expansionary
vision of the entrepreneurs.
The independent variables are classified into these five main groups to capture the
dimensions of all the theoretical perspectives of the study. The five hypotheses are based on
the five main dimensions of the Chinese entrepreneurs identified for study. Financial
rewards is chosen as the dependent variable because it is a useful indicator of the success of
the entrepreneurs. The other variables become the independent variables in the five
hypotheses.
Relevant statistical techniques have been employed to conduct systematic investigations to
test the hypotheses in order to achieve the objective of the study. The main technique to
describe the relationship between the research independent and dependent variables is
multiple regression analysis. Multiple regression analysis produces correlations, which are
useful for the exploration of the strength of the association between any two pairs of
variables, and beta coefficients give an indication of the relative contribution of each
independent variable. It allows the researcher to predict a score or result on a dependent
variable from the score or result of a number of independent variables (Brace, Kemp &
Snelgar 2003, Bryman & Cramer 2004, Hair et al. 2006, and Pallant 2005).
Another related statistical tool employed is the analysis of variance (ANOVA), which is
useful for detecting any significant difference in dependent variables between groups. An
equally important statistical technique which the study employed is factor analysis. Since
the numbers of questions in this study are many (92) there is a need to use factor analysis to
reduce or summarize the original data into smaller manageable units for analysis (14 scales
226
remain). These statistical techniques are employed using the Statistical Package for Social
Scientists (SPSS) version 17. Structural equation modelling (AMOS Version 7) is also used
to test the final model explaining the success of Chinese entrepreneurs.
This chapter is organized into sections. Following this introductory section, the
development of the scales and the computation of total success (dependent variables) are
presented in section 2. Testing of each of the hypotheses is contained in each of the
subsequent sections. The hypotheses results are summarized and the final model will
illustrate the relationships among the variables. Finally, in the last section, key findings
based on the overall results of the study will be integrated and discussed, leading to the
development of an overall picture and understanding of Chinese entrepreneurs from two
generations in Box Hill
8.2 The Dependent Variable: Financial Rewards as Measure of Success As indicated earlier, for the Chinese entrepreneurs, financial rewards is the best indicator of
their success in business. This success factor is commonly used as a measure of success in
entrepreneurship research (Praag 1996, Rauch & Frese 2000, Walker 2004, Yusuf 1995,
Brochhaus 1980).
The dependent variable is made up of a large number of related items (92 in total). There is
the need to prepare these items by means of factor analysis before their use in the
hypotheses testing. Hence, in this section, an exploratory factor analysis statistical
technique will be used to reduce the original large data into a more manageable number of
dimensions or factors conducive for use in multiple regression analysis in the testing of the
hypotheses. The questionnaire is split into logical groups and a factor analysis (using
principal component analysis) is carried out for each group. The principal axis factoring
method of factor analysis will be used to ensure that only a shared variance is used to
cluster variables together.
227
Also, Bartlett’s test of sphericity and the Kaiser-Meyer-Olkin (KMO) measures of sampling
adequacy will be performed to ascertain the appropriateness of the factor analysis for the
research variables. The Kaiser criterion is used to determine the number of factors in each
case, and an oblimin rotation is applied in order to allow correlation of the factors. Scales
will be created for each of these factors by adding the responses for the items, loading
strongly on each factor. Finally, a reliability test which gives a Cronbach alpha value will
be performed to ensure that the items included in the new scales agree well with one
another and are reliable for use in the testing of the hypotheses.
8.2.1 Development of Scale for Measures of Financial Rewards Respondents were asked to rate the answers based on their personal views on engaging in
their own business ventures on a 5-point scale, ranging from 1 = little importance to 5 =
high importance. The response correlations between these items, their ordinal level of
measurement and the large number of participants qualified the data for factor analysis. All
the dependent variable items data specified above were factor analysed by means of a
principal axis factoring, with oblimin rotation. The results from this analysis follow.
In each case, the pattern matrix was used to test for simple structure. Where items were
loaded strongly (>0.3) on more than one factor, the item was removed.
Result 1 The various indications of the factorability of the dependent variable were excellent and
appropriate: KMO was greater than > 0.80; and the Bartlett test of sphericity which
indicated the significant level of p< .001 also showed that factor analysis was appropriate.
Result 2 An eigenvalue of greater than 1.0 suggested the number of factors suitable for extraction.
These values also represented the amount of variance accounted for by each factor (see
Appendix 20)
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Result 3 The SPSS output extracted from the measures of success variable is indicated in the pattern
matrix table (see Appendix 5). The factor analysis reduced the dependent variable data into
fourteen factors collating related items together. These values, which were above 0.3,
indicate the item or responses that were most crucial or important to the Chinese
entrepreneurs in terms of each measure of success. Scales were constructed for each of the
factors by averaging the responses for the items loading strongly on each factor.
For clarity purposes, the pattern matrix SPSS output was described and labelled according
to the loading on the different factors.
Result 4 A reliability test was conducted for the scales constructed for each of the extracted factors
to ascertain the degree to which the items making up the scale were correlated. This was to
find out whether all the items that had collated on one factor had internal consistency and
whether they measured the same underlying constructs. Ideally, the output of a reliability
test, which was a Cronbach alpha coefficient, should have a value above 0.7, but greater or
equal to 0.6 would be an acceptable lower reliability coefficient (Hair et al. 2006). All
scales had good reliability. Means, variance and standard deviation on correlations for these
scales were also calculated.
Result 5 After the extraction and interpretation of the above fourteen factors, the factor for financial
rewards was derived for use in the multiple regression analysis of the general assessment of
the relationship with other independent variables and the dependent variable. The 14 items
comprising total success were also subjected to a reliability test to ensure that all the items
on the total success scale belonged together with strong internal consistency. The reliability
test produced a Cronbach alpha coefficient for the financial rewards factor of 0.769,
suggesting that this scale could be used for hypotheses testing.
229
Therefore, the results of the various statistical tests conducted to prepare the dependent
variable (financial rewards) were correct and ready for use in the testing of the hypotheses
in the subsequent sections. The exploratory factor analysis supported the existence of all
fourteen constructs or factors in the interpretation of success by the Chinese entrepreneurs.
8.3 Hypothesis 1 – Background of the Entrepreneurs Is Related to Entrepreneurial Success
The first hypothesis of the study is anchored in economic and financial theoretical
perspectives. These factors (guanxi connections and prior experience) are important
contributors to successful entrepreneurial behaviour and patterns of activities. The major
objective of this hypothesis is to find out whether these factors of the Chinese entrepreneurs
relate to their success.
8.3.1 Development of Scales for the Background of the Entrepreneurs The variables indicating the entrepreneurial factors were measured by using eight (8) items
each in the questionnaire survey asking the respondents to rate themselves in relation to
their personal attributes on a 5-point scale, ranging from 0 = little importance to 5 = high
importance. These variables were subjected to principal axis factoring, with oblimin
rotation. The results are as follows:
Result 1
The factorability of these variables was ascertained by the inspection of the correlation
matrix to find out whether many coefficients of 0.3 and above existed. The Kaiser-Meyer-
Olkin (KMO) was 0.823, and the Bartlett test of sphericity reached statistical significance
(p<0.001), supporting the factorability of the correlation matrix.
Result 2
Two factors with an eigenvalue of greater than 1.0 were found in the SPSS output. The first
factor (guanxi connections) contributed 35.9 percent and the second factor (prior
230
experience) contributed 27.4 percent of total variance in the variables explained (refer to
Appendix 20).
Result 3
The pattern matrix (see Appendix 5) generated by SPSS highlighted variables that loaded
strongly on the factors. Each of the factors had four (4) variables loading strongly on it.
Factor 1 indicated the variables representing the components and importance of guanxi
connections. Factor 2 indicated variables highlighting components and importance of prior
experience. See below for the description of the pattern matrix for the background factors
of the entrepreneurs.
Table 8.1 Description of Pattern Matrix for Background Factors
Factor1 Guanxi connections
Factor 2 Prior experience
Role models Professional expertise Advice from friends Independent decision
making Better education Prior experience
Financial assistance Passion
Results 4
The Cronbach alpha coefficients of the variables proved reliable and acceptable, with
internal consistency among the variables: 0.626 (Factor 1) and 0.801 (Factor 2). Thus, the
factor analysis of the independent variables in hypothesis 1 reduced the data, aligning them
according to their underlying structures to two major factors – factor 1 (guanxi
connections) and factor 2 (prior experience). Scales were constructed for each of the factors
by averaging the responses for the variables loading strongly on each factor. These scales
were proved reliable by their respective Cronbach alpha coefficients and were therefore
appropriate for the testing of the hypothesis.
231
8.3.2 Hypothesis Testing Results: Success in Terms of Background of the Entrepreneurs
The scales developed previously for success and personality traits were subjected to
multiple regression analysis for the testing of the first hypothesis of the study. The use of
the multiple regressions allowed the study to determine how well this set of independent
variables – background of Chinese entrepreneurs in Box Hill – were able to predict the
dependent variable – their success. The result also showed how much of the success
variance of the independent variables guanxi connections and prior experience was
explained in the dependent variable financial rewards.
The coefficient of determination (R square value) is 0.266. Thus 26.6 percent of the
variation in success was explained by the background of the entrepreneurs. The ANOVA
results also showed a significant linear relationship between the independent and the
dependent variables (F=35.75, p<0.001), providing support for the first hypothesis. The
contribution of each of the independent variables included in the model in the prediction of
the dependent variable was determined by its beta score. Variables of higher beta values
mean they contribute more strongly to explaining the dependent variable. Here, guanxi
connections had a beta value of 0.44, and prior experience had a beta value of 0.124 (see
Appendix 21).
In summary, hypothesis 1 of the study, which states that the background of the entrepreneur
is related to success, is supported and confirmed (with the independent variables explaining
26.6 percent of the dependent variable. This result has p<0.001, showing strong support for
hypothesis 1. Guanxi connections make a more statistically significant contribution to the
prediction of the dependent variable. This result also implies that the Chinese
entrepreneurs’ background supports that they are orientated towards guanxi connections.
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8.4 Hypothesis 2 – Entrepreneurial Motivation Is Related to Entrepreneurial Success
The second hypothesis of the study is anchored on the psychological and motivational
characteristics of the Chinese entrepreneurs. These attributes have been identified as being
capable of successfully predicting entrepreneurial behaviour and patterns of activities.
These are the reasons for the Chinese entrepreneurs being successful as well as creating
their own businesses. The major objective of this hypothesis is to find out whether the
identified factors of the Chinese entrepreneurs are related to their success.
A number of research variables were included in the questionnaire survey to measure the
factors which motivate Chinese entrepreneurs to engage in entrepreneurial ventures. These
variables, which have been identified as the independent variables for this hypothesis,
centre mainly on personal, business and financial motivations. Appropriate statistical
procedures were employed to summarize the original data into smaller manageable units for
analysis. Thus, factor analysis was used to reduce and simplify the number of the
independent variables. The reliability of the scales created for the various factor scales was
tested. Finally hypothesis 2 was tested by regressing success on these scales.
8.4.1 Development of Scales for Entrepreneurial Motivation The variables indicating the entrepreneurial factors were measured by using eight (8) items
each in the questionnaire survey asking the respondents to rate themselves in relation to
their personal attributes on a 5-point scale, ranging from 0 = little importance to 5 = high
importance. These variables were subjected to principal axis factoring, with oblimin
rotation. The results are as follows:
Result 1
The factorability of these variables was ascertained by the inspection of the correlation
matrix to find out whether many coefficients of 0.3 and above existed. The Kaiser-Meyer-
233
Olkin (KMO) was 0.862, and the Bartlett test of sphericity reached statistical significance
(p<0.001) supporting the factorability of the correlation matrix.
Result 2
Two factors with an eigenvalue of greater than 1.0 were found in the SPSS output. The first
factor (self-satisfaction) contributed 37.6 percent and the second factor (potential seeking)
contributed 35.0 percent of the total variance in the variables explained (see Appendix 20).
Result 3
The pattern matrix (see Appendix 5) generated by SPSS highlighted the variables loading
strongly on the factors. The first factor (self-satisfaction) had four (4) variables, and the
second factor (potential seeking) had five (5) variables. Factor 1 indicated the variables
representing the components and importance of guanxi connections. Factor 2 indicated
variables highlighting the components and importance of prior experience of the Chinese
entrepreneurs. See below for the description of the pattern matrix for the entrepreneurial
motivation factors.
Table 8.2 Description of Pattern Matrix for Entrepreneurial Motivation Factors
Factor1 Self-satisfaction
Factor 2 Potential seeking
Freedom Migration Desire to extend Dissatisfaction with
previous jobs Potential Envy of others
Strong belief in oneself Profit maximization
Inheritance
Results 4
The Cronbach alpha coefficients of the variables proved reliable, with acceptable internal
consistency among the variables: 0.802 (factor 1) and 0.793 (factor 2). Thus, the factor
analysis of the independent variables in hypothesis 2 reduced the data, aligning them
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according to their underlying structures to two major factors – Factor 1 (self-satisfaction)
and Factor 2 (potential seeking). Scales were constructed for each of the factors by
averaging the responses for the variables loading strongly on each factor. These scales were
proved reliable by their respective Cronbach alpha coefficients and were therefore
appropriate for the testing of the hypothesis.
8.4.2 Hypothesis Testing Results: Success in terms of Motivation The scales developed previously for success and personality traits were subjected to
multiple regression analysis with the enter method for the testing of the first hypothesis of
the study. The use of the multiple regressions allowed the study to determine how well this
set of independent variables – motivation of Chinese entrepreneurs in Box Hill – was able
to predict the dependent variable – their success. The result also showed how much of the
success variance the independent variables self-satisfaction and potential seeking explained
in the dependent variable financial rewards.
The coefficient of determination (R square value) was 0.224. Thus 22.4 percent of the
variation in success was explained by entrepreneurial motivation. The ANOVA results also
showed a significant linear relationship between the independent and the dependent
variables (F=28.415, p<0.001), providing support for the second hypothesis. The
contribution of each of the independent variables included in the model in the prediction of
the dependent variable was determined by their beta scores. Self-satisfaction had a beta
value of 0.265, and potential seeking had a beta value of 0.275 (see Appendix 21).
In summary, hypothesis 2 of the study, which states that entrepreneurial motivation is
related to entrepreneurial success, was supported and confirmed (with the independent
variables explaining 22.4 percent of the dependent variable). This result was also supported
by its statistical significant value of p <.001, showing a strong support for hypothesis 2.
Both factors make a similar statistically significant contribution to the prediction of the
dependent variable. This result also implies that both factors are as important in the success
of Chinese entrepreneurs.
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8.5 Hypothesis 3 – Confucian Piety Is Related to Entrepreneurial Success
The second hypothesis of the study is anchored in the psychological and motivational
characteristics of the Chinese entrepreneurs. These attributes were identified as being
capable of successfully predicting entrepreneurial behaviour and patterns of activity. These
are the reasons why the Chinese entrepreneurs not only create their own business ventures
but also do so successfully. The major objective of this hypothesis is to find out whether the
identified factors of the Chinese entrepreneurs are related to their success.
A number of research variables were included in the questionnaire survey to measure the
factors which motivate Chinese entrepreneurs to engage in entrepreneurial ventures. These
variables, which were identified as the independent variables for this hypothesis, centre
mainly on personal, business and financial motivations. Appropriate statistical procedures
were employed to summarize the original data into smaller manageable units for analysis.
Thus, factor analysis was used to reduce and simplify the number of the independent
variables. The reliability of the scales created for the various factor scales was tested.
Finally hypothesis 2 was tested by regressing success on these scales.
8.5.1 Development of Scales for Confucian Piety The variables indicating the entrepreneurial factors were measured by using eight (9) items
each in the questionnaire survey asking the respondents to rate themselves in relation to
their personal attributes on a 5-point scale, ranging from 0 = little importance to 5 = high
importance. These variables were subjected to principal axis factoring, with oblimin
rotation. The results are as follows:
Result 1
The factorability of these variables was ascertained by the inspection of the correlation
matrix to find out whether many coefficients of 0.3 and above existed. The Kaiser-Meyer-
Olkin (KMO) was 0.909, and the Bartlett test of sphericity reached statistical significance
(p<0.001), supporting the factorability of the correlation matrix.
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Result 2
One factor with an eigenvalue of greater than 1.0 was found in the SPSS output. The factor
(Confucian piety) contributed 21.1 percent total variance in the variables explained (see
Appendix 20).
Result 3
The pattern matrix (see Appendix 5) generated by SPSS, highlighted variables loading
strongly on the factors. The factor (Confucian piety) had six (6) variables. This factor
showed the variables representing the components and importance of traditional Confucian
values. See below for the description of the pattern matrix for the Confucian piety set-up
factors.
Table 8.3 Description of Pattern Matrix for Confucian Piety Factors
Factor Confucian Piety
Guanxi connections
Family involvement
Community guanxi Head of family
Advice from elders Traditional wisdom
Helping other ChineseRacial discrimination
Trust in others
Results 4
The Cronbach alpha coefficient of the variables proved reliable and to have acceptable
internal consistency among the variables: 0.855, the factor analysis of the independent
variables in hypothesis 3 reduced the data, aligning them according to their underlying
structures to one factor – Confucian piety. A scale was constructed, which was proved
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reliable by the respective Cronbach alpha coefficient and was therefore appropriate for the
testing of the hypothesis.
8.5.2 Hypothesis Testing Results: Success in Terms of Confucian Piety The scale developed for the traditional Confucian values was subjected to linear regression
analysis. The use of the regressions allowed the study to determine how well this set of
independent variables – traditional Confucian values of Chinese entrepreneurs in Box Hill –
was able to predict the dependent variable – their success.
The coefficient of determination (R square value) was 0.291. Thus 29.1 percent of the
variation in success was explained by the variable Confucian piety. The ANOVA results
also showed a significant linear relationship between the independent and the dependent
variables (F=81.446, p<0.001), providing support for the third hypothesis. The contribution
of the independent variables included in the model in the prediction of the dependent
variable was determined by the beta scores. Confucian piety had a beta value of 0.540
(refer to Appendix 21).
In summary, hypothesis 3 of the study, which states that Confucian piety is related to
entrepreneurial success, was supported and confirmed (with the independent variables
explaining 29.1 percent of the dependent variable). This result was also supported by its
statistical significant value of p <.001, showing a strong support for hypothesis 3. This
implies that the factor is an important measure of Chinese entrepreneurial success.
8.6 Hypothesis 4 – Difficulties and Hurdles Are Related to Entrepreneurial Success
The fourth hypothesis of the study is based on the difficulties and hurdles encountered by
the Chinese entrepreneurs. These attributes were identified as being capable of predicting
entrepreneurial behaviour and patterns of activity. These are reasons why the Chinese
entrepreneurs not only create their own business ventures but also tackle the problems and
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become successful. The major objective of this hypothesis was to find out whether the
identified factors of the Chinese entrepreneurs are related to their success.
A number of research variables were included in the questionnaire survey to measure the
factors that the Chinese entrepreneurs encountered during their ventures. These variables,
which were identified as the independent variables for this hypothesis, centred mainly on
personal, business and financial difficulties. Appropriate statistical procedures were
employed to summarize the original data into smaller manageable units for analysis. Thus,
factor analysis was used to reduce and simplify the number of the independent variables.
The reliability of the scales created for the various factor scales was tested. Finally,
hypothesis 4 was tested by regressing success on these scales.
8.6.1 Development of Scales for the Difficulties and Hurdles The variables indicating the entrepreneurial factors were measured by using forty (40)
items each in the questionnaire survey asking the respondents to rate themselves in relation
to their personal attributes on a 5-point scale, ranging from 0 = little importance to 5 = high
importance. These variables were subjected to principal axis factoring, with oblimin
rotation. The results are as follows:
Result 1
The factorability of these variables was ascertained by inspecting the correlation matrix to
find out whether many coefficients of 0.3 and above existed. The Kaiser-Meyer-Olkin
(KMO) was 0.922, and the Bartlett test of sphericity reached statistical significance
(p<0.001), supporting the factorability of the correlation matrix.
Result 2
Seven factors with an eigenvalue of greater than 1.0 were found in the SPSS output. The
first factor (adaptation) contributed 18.3 percent, the second factor (business set-up)
contributed 21.2 percent, the third factor (bureaucracy and regulation) contributed 24.1
percent, the fourth factor (personal hurdles) contributed 11.9 percent, the fifth factor
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(external hurdles) contributed 24.5 percent, the sixth factor (business management)
contributed 27.9 percent and the seventh factor (adaptive opportunism) contributed 15.8
percent of the total variance in the variables explained (see Appendix 20).
Result 3
The pattern matrix (see Appendix 5) generated by SPSS highlighted variables loading
strongly on the factors. The first factor (adaptation) had five (5) variables, the second factor
(business set-up) had seven (7) variables, the third factor (bureaucracy and regulation) had
six (6) variables, the fourth factor (personal hurdles) had three (3) variables, the fifth factor
(external hurdles) had seven (7) variables, the sixth factor (business management) had six
(6) variables, the seventh factor (adaptive opportunism) had six (6) variables. See below for
the description of the pattern matrix for the difficulties and hurdles factors.
Table 8.4 Description of Pattern Matrix for Difficulties and Hurdles Factors
Factors Variables 1. Adaptation Difference in culture
Difference in business practice Recognition of skills Acceptance by Australia Adoption of Australian ways
2. Business Set-up Location Funds
Business skills Employees Education level Power sharing Initial financial back-up
3. Bureaucracy & Regulation
State government
Federal government Local government Government bureaucracy
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Unionism Workplace agreement
4. Personal Hurdles
Language barrier
Long working hours Gambling
5. External Hurdles
Community support
Locality Family history
Return to home country Financial assistance Chinese competition Parents’ influence
6. Business Management
Organization skills
Staff management Marketing planning
Expansion Niche products Sound accounting
7. Adaptive Opportunism
Workplace reform
Continuing education Regulation issues Cheaper imports Fusion style Cut-price strategies
Results 4
The Cronbach alpha coefficients of the variables proved reliable and to have acceptable
internal consistency among the variables: 0.843 (factor 1), 0.884 (factor 2), 0.903 (factor 3),
0.664 (factor 4), 0.884 (factor 5), 0.885 (factor 6) and 0.809 (factor 7). Thus, the factor
analysis of the independent variables in hypothesis 4 reduced the data significantly,
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aligning them according to their underlying structures to 7 major factors: – factor 1 (Self-
satisfaction), factor 2 (potential seeking), factor 3 (bureaucracy and regulation), factor 4
(personal hurdles), factor 5 (external hurdles), factor 6 (business management) and factor 7
(adaptive opportunism). Scales were constructed for each of the factors by averaging the
responses for the variables loading strongly on each factor. These scales were proved
reliable by their respective Cronbach alpha coefficients and were therefore appropriate for
the testing of the hypothesis.
8.6.2 Hypothesis Testing Results: Entrepreneurial Success in Terms of Difficulties and Hurdles
The scales developed previously for the difficulties and hurdles were subjected to multiple
regression analysis with the enter method for the testing of the fourth hypothesis of the
study. The use of the multiple regressions allowed the study to determine how well this set
of independent variables – motivation of Chinese entrepreneurs in Box Hill – was able to
predict the dependent variable – their success. The result also showed how much of the
success variance the independent variables adaptation, business set-up, bureaucracy and
regulation, personal hurdles, external hurdles, business management and adaptive
opportunism explained in the dependent variable financial rewards.
The coefficient of determination (R square value) was 0.607. Thus 60.7 percent of the
variation in success was explained by the difficulties and hurdles. The ANOVA results also
showed a significant linear relationship between the independent and the dependent
variables (F=42.398, p<0.001), providing support for the fourth hypothesis. The
contribution of each of the independent variables included in the model in the prediction of
the dependent variable was determined by their beta scores. The results were: adaptation
(0.164), business set-up (0.190), bureaucracy and regulation (-0.011), personal hurdles (-
0.098), external hurdles (0.119), business management (0.286) and adaptive opportunism
(0.219) (see Appendix 21).
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In summary, hypothesis 4 of the study, which states that the difficulties and hurdles faced
by the entrepreneurs are related to entrepreneurial success, was supported and confirmed
(with the independent variables explaining 60.7 percent of the dependent variable). This
result was also supported by its statistically significant value of p <.001, showing a strong
support for hypothesis 4. This result also implies that both factors are important in the
success of Chinese entrepreneurs.
8.7 Hypothesis 5 – Overseas Expansionary Vision Is Related to Entrepreneurial Success
The fifth hypothesis of the study is anchored in the visionary and innovative characteristics
of the Chinese entrepreneurs. These attributes can be used as a predictor of entrepreneurial
behaviour and patterns of activity. These are the reasons why the Chinese entrepreneurs not
only create their own business ventures but also expand beyond the local establishment and
achieve success. The major objective of this hypothesis was to find out whether the
identified factors of the Chinese entrepreneurs are related to their success.
A number of research variables were included in the questionnaire survey to measure the
factors which motivate Chinese entrepreneurs to engage in entrepreneurial ventures. These
variables, which were identified as the independent variables for this hypothesis, centre
mainly on personal, business and financial motivations. Appropriate statistical procedures
were employed to summarize the original data into smaller manageable units for analysis.
Thus, factor analysis was used to reduce and simplify the number of the independent
variables. The reliability of the scales created for the various factor scales was tested.
Finally, hypothesis 5 was tested by regressing success on these scales.
8.7.1 Development of Scales for Overseas Expansionary Vision The variables indicating the entrepreneurial factors were measured by using four (4) items
each in the questionnaire survey asking the respondents to rate themselves in relation to
their personal attributes on a 5-point scale, ranging from 0 = little importance to 5 = high
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importance. These variables were subjected to principal axis factoring, with oblimin
rotation. The results are as follows:
Result 1
The factorability of these variables was ascertained by the inspection of the correlation
matrix to find out whether many coefficients of 0.3 and above existed. The Kaiser-Meyer-
Olkin (KMO) was 0.922, and the Bartlett test of sphericity reached statistical significance
(p<0.001), supporting the factorability of the correlation matrix.
Result 2
One factor with an eigenvalue of greater than 1.0 was found in the SPSS output. The factor
(overseas expansionary vision) contributed 24.0 percent of total variance in the variables
explained (see Appendix 20).
Result 3
The pattern matrix (see Appendix 5) generated by SPSS highlighted the variables loading
strongly on the factors. The factor (overseas expansionary vision) had eight (8) variables.
See below for the description of the pattern matrix.
Table 8.5 Description of Pattern Matrix for Overseas Expansionary Vision Factors
Factor Overseas
Expansionary VisionAnything-is-possible
Borderless trading Attractive overseas
market More travel
Overseas connection Cheaper supplies
Potential – more moneyMore satisfaction
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Results 4
The Cronbach alpha coefficients of the variables proved reliable and to have acceptable
internal consistency among the variables: 0.899. Thus, the factor analysis of the
independent variable in hypothesis 5 reduced the data, aligning them according to their
underlying structures to one factor – overseas expansionary vision. A scale was constructed
for each of the factors by averaging the responses for the variables loading strongly on each
factor. These scales were proved reliable by the respective Cronbach alpha coefficients and
were therefore appropriate for the testing of the hypothesis.
8.7.2 Hypothesis Testing Results: Success in Terms of Overseas Expansionary Vision
The scale developed previously for overseas expansionary vision and motivation were
subjected to regression analysis with the method for the testing of the fifth hypothesis of the
study. The use of the regression allowed the study to determine how well this set of
independent variables – overseas vision and motivation of Chinese entrepreneurs in Box
Hill – was able to predict the dependent variable – their success. The result also showed
how much of the success variance the independent variable, overseas expansionary vision,
explained in the dependent variable, financial rewards.
The coefficient of determination (R square value) was 0.449. Thus 44.9 percent of the
variation in success was explained by the overseas expansionary vision set-up. The
ANOVA results also showed a significant linear relationship between the independent and
the dependent variables (F=161.3, p<0.001), providing support for the fifth hypothesis. The
contribution of each of the independent variables included in the model in the prediction of
the dependent variable was determined by their beta scores. Overseas expansionary vision
had a beta value of 0.670 (see Appendix 21).
In summary, hypothesis 5 of the study, which states that the overseas expansionary vision
of the entrepreneurs is related to entrepreneurial success, was supported and confirmed
(with the independent variables explaining 67.0 percent of the dependent variable). This
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result was also supported by its statistical significant value of p <.001, showing a strong
support for hypothesis 5. The factor made a strong statistically significant contribution to
the prediction of the dependent variable. This result also implies that the factor is important
in the success of Chinese entrepreneurs.
8.8 Summary of the Hypotheses Testing Results The scales developed previously for all the variables were subjected to multiple regression
analysis with the method for the testing of the five hypotheses of the study. The use of the
regression allowed the study to determine how well the five sets of independent variables
were able to predict the dependent variable – their success. The results from previous
sections (Sections 7.2–7.7) showed affirmative results for all the variables related to the
dependent variable – financial reward.
The variables of each of the fourteen (14) factors make a statistically significant
contribution to the factors. Hence, the results imply that all factors are important in the
success of Chinese entrepreneurs. In summary, all five components, background of the
entrepreneurs, entrepreneurial motivations, traditional Confucian values, difficulties and
hurdles and overseas expansionary vision, were found to be related to the business success
of the entrepreneurs. Therefore, all five hypotheses were supported and confirmed.
In addition, the theoretical perspectives of the five hypotheses of the study were found to be
useful in explaining the success of the Chinese entrepreneurs. The results strongly support
the characteristics of successful entrepreneurs presented by the extensive literature. A new
model (comprising all the component variables) explaining the success of Chinese
entrepreneurs is proposed and tested in the next sub-section.
8.9 SEM – Structural Equation Modelling (N=200) From the overall hypotheses results, a model explaining the success of Chinese
entrepreneurs is proposed here. Fourteen (14) scales were used to construct the theoretical
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model. The SEM computer programme was applied to test the validity of all correlations to
ensure good-fit. The model depicts the relationships between all the scales. This model
suggests that the relationships among all the scales, namely: guanxi connections, prior
experience, self-satisfaction, potential seeking, Confucian piety, adaptation, business set-
up, bureaucracy and regulation, personal hurdles, external hurdles, business management,
adaptive opportunism, overseas expansionary vision and financial rewards.
8.9.1 Influence of Gender – Two Factor MANOVA Test In this study, it was important to find out, in the beginning, if there was any influence of
gender on the entrepreneurial behaviours of both generations. Multivariate tests on gender
difference for 14 Constructs (2 Generations) were carried out, and the results can be found
in Appendix 8. They are summarized as follows:
• Significant generation effect (Wilks Lambda = .810, F (14,183) =3.07, p<.001,
partial eta square = .190)
• No significant gender effect (Wilks Lambda = .059, F(14,183) = .769, p = .702)
• No significant interaction between gender and generation (Wilks Lambda=.932, F
(14,183) = .956, p = .500).
In this study, there were 110 males and 90 females. This proportion and the number of
respondents add validity to the comparison of the genders between the two generations.
However, there is no significant gender effect in this study.
8.9.2 Results In this study, regression analysis is the appropriate method of analysis when the research
problem involves a single metric dependent variable presumed to be related to two or more
metric independent variables. The linearity of the relationship between dependent and
independent variables represents the degree to which the change in the dependent variable
is associated with the independent variable. The regression coefficient is constant across the
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range of values for the independent variable. The concept of correlation is based on a linear
relationship, thus making it a critical issue in regression analysis. Linearity is easily
examined through residual plots. Any consistent curvilinear pattern in the residuals
indicates that corrective action, such as transformation, will increase both the predictive
accuracy of the model and the validity of the estimated coefficients. This will be listed in
the next section and the following chapter.
Here, the outcome variable is ‘financial rewards’. The other 13 scales become independent
variables. The objective of this analysis is to predict the changes in the dependent variable
(financial rewards) in response to changes in the independent variables. This objective is
most often achieved through the statistical rule of least squares. The ability of an additional
independent variable to improve the prediction of the dependent variable is related not only
to its correlation to the dependent variable, but also to the correlations of the additional
independent variable to the independent variables already in the regression equation. The
following model (which combines 13 of the independent variables specified above)
explains 64.8 percent of the variation in the dependent variable, financial rewards, when
fitted using structural equation modelling.
Table 8.6 Model Summary of Regression Square
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .805a .648 .624 .50060
a. Predictors: (constant), guanxi, Personal Hurdles, Financial Rewards, Overseas Expansionary Vision, Prior Experience,
Bureaucracy & Regulation, Potential Seeking, Self Satisfying, External Hurdles, Adaptation, Business Set-up, Adaptive
Opportunism, Confucian Piety, Business Management
Note that in the following regression equation only three variables (business management,
adaptive opportunism and overseas expansionary vision – each with significant value less
than < 0.05) have a direct relationship with the outcome – financial rewards (see Appendix
15 for full results). Although the other variables have a significant correlation with financial
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rewards (see Appendix 8), they do not have a direct relationship with it, only an indirect
relationship by way of the three strategy variables. The results, by squared multiple
correlations, provide a list of the percentage variations for 11 factors being investigated.
They indicate the contributions of each factor towards the model
Table 8.7 Squared multiple correlations of 11 factors
Factors Estimate Explanation
Guanxi connections .365 The model explains 37 percent of variation in Guanxi Connections
Prior Experience .367 The model explains 37 percent of variation in Prior Experience
Adaptation .366 The model explains 37 percent of variation in Adaptation
External Hurdles .644 The model explains 64 percent of variation in External Hurdles
Personal Hurdles .445 The model explains 45 percent of variation in Personal Hurdles
Business Set-up .582 The model explains 58 percent of variation in Business Set-up
Bureaucracy & Regulation .505 The model explains 51 percent of variation in Bureaucracy & Regulation
Business Management .640 The model explains 64 percent of variation in Business Management
Overseas Expansionary Vision .488 The model explains 49 percent of variation in Overseas Expansionary Vision
Adaptive Opportunism .661 The model explains 66 percent of variation in Adaptive Opportunism
Financial Rewards .607 The model explains 61 percent of the variation in Financial Rewards
The most important factors associated with financial rewards are ranked from highest to
lowest (see Appendix 11 for full tabulated results):
Confucian piety, with a total standardized effect size of 0.473
Business management, with a total standardized effect size of 0.464
Adaptation, with a total standardized effect size of 0.363
External hurdles, with a total standardized effect size of 0.332
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Overseas expansionary vision, with a total standardized effect size of 0.331.
An invariance test gives the answer ‘Yes’ (Chi-Square = 58.5, df = 35, p=.008).
The population (N=200) is the total combined first and second generation entrepreneurs.
Overall, the following conclusions can be drawn:
• The highest ranked is Confucian piety; this is unique to the Chinese entrepreneurs.
This implies that traditional Confucian values are the most important in the success
of their businesses.
• The other three factors, business management, adaptation and external hurdles, are
important to all entrepreneurs and are not unique to Chinese entrepreneurs. This
implies that the factors are important for both Chinese and non-Chinese
entrepreneurs in running their businesses.
• Overseas expansionary vision is a major factor in determining the success of
entrepreneurship, especially in those entrepreneurs who have the vision and
innovation to expand their existing businesses or initiate new overseas businesses.
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8.9.3 Diagrammatic Representation of the Model
Correlations of the fourteen constructs are summarized as follows:
Table 8.8 Summary of Correlations of 14 Constructs
Variable
Number of Factors
> 0.50
Comment
A1 Guanxi Connections 6 Highest with D2 = 0.613
A2 Prior Experience 3 Highest with B1 = 0.548
B1 Self-satisfaction 3 Highest with A1 = 0.552
B2 Potential Seeking 5 Highest with C1 = 0.681
D1 Adaptation 9 Highest with E2 = 0.706
D2 Business Set-up 9 Highest with E2 = 0.711
C1 Confucian Piety 11 Highest with E1 = 0.768
D3 Bureaucracy &
Regulation
7 Highest with D1 = 0.621
D4 Personal Hurdles 5 Highest with C1 = 0.571
E1 External Hurdles 9 Highest with C1 = 0.768
F1 Overseas Expansionary
Vision
8 Highest with E4 = 0.670
E2 Business Management 10 Highest with E4 = 0.720
E3 Adaptive Opportunism 11 Highest with E1 = 0.729
E4 Financial Rewards 10 Highest with E2 = 0.720
The summary indicates that, of all the correlations,
– E2 (business management), C1 (Confucian piety) form the ‘highest correlations’ (3
for each).
– E1 (external hurdles) and E4 (financial rewards) (2 for each).
– A1 (guanxi connections), B1 (self-satisfaction), D1 (adaptation) and D2 (business set-
up) (1 for each).
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– C1, E2, E3 (adaptive opportunism) and E4 have more than 10 correlations (>0.50),
with other correlations. The theoretical model using these constructs as the strongest
links to other constructs is supported by these results.
The above model is depicted in Diagram 8.1. Straight arrows represent the impact of
independent variables on the dependent variables, and curved arrows depict the correlation
among variables, just like multi-collinearity in multiple regression. All factors within the
model are linked. The model is a dynamic system, influenced by all the factors. The
importance of each individual factor can be correlated and measured against the others.
Therefore, the model can be tested and proven if it is a ‘tight and good-fit’ model.
Furthermore, the model will be compared between the two generations, to find out whether
the five dimensions and five hypotheses are different. Financial rewards, which is the
ultimate goal of most entrepreneurs, is used as the outcome of the model. The elements are
the factors of successful entrepreneurs. The relationship and reliance of each separate factor
can then be measured and checked, with the results listed in the following sections.
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Diagram 8.1 Model of Chinese Entrepreneurship Success
8.9.4 Explanation of the Model The above model can be explained by separating the factors into four different levels of
interactions, determined by the regression results and the strength of the relationships. The
explanations will establish the profile of Chinese entrepreneurs in Box Hill, as follows:
Adaptation
Business Set-Up
Bureaucracy & Regulation
External Hurdles
Confucian Piety
Personal Hurdles
PriorExperience
Guanxi Connection
Potential Seeking
Self Satisfying
Adaptive Opportunism
Business Management
Overseas Expansion
Vision
Financial Rewards
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Level 1 – Results in the covariances and correlations (see Appendices 7.8a and 7.8b)
support the notion of positive correlation between the variables Confucian piety, self-
satisfaction and potential seeking. Confucian piety plays the most important role in
influencing both motivational factors (self-satisfaction and potential seeking), as well as the
correlations and relationships of other variables contributing to the success of
entrepreneurship. This supports the research reviewed in chapter 2 that Confucian piety is
unique in traditional Chinese culture, and it is one of the major factors in the Chinese
entrepreneurial process.
Level 2 – Guanxi connections has a direct and positive association with business set-up; the
association of this relationship indicates that this element is particularly important and
influences how businesses are set up, especially when guanxi connections are also unique
in Chinese culture. Also, prior experience has a direct and positive association with
adaptation; this is particularly important in determining how difficult it is for immigrants to
assimilate into the host country in respect of, for example, education, language and past
working experience. These two elements (guanxi connections and prior experience)
combine to contribute to and lay the foundation of the businesses.
Level 3 – The five factors of business set-up, adaptation, personal hurdles, external hurdles,
bureaucracy and regulation are included; the results from the regression analysis support
this. However, the relationships among the factors are not straightforward. While they are
interlinked, they do not influence on each other equally. Moreover, the linkages to the next
level, Level 4, are different. External hurdles has 3 associations, while business set-up has 2
associations. Both adaptation and bureaucracy and regulation have 1. Personal hurdles has
0.
The regression weight of the total population (see Appendix 11) indicates that the variable
self-satisfaction has a reduced association with three other variables: external hurdles,
personal hurdles and bureaucracy and regulation. The same results were obtained before
and after the standardization. The explanation is obvious. These relationships confirm the
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notion that the entrepreneurs gain more self-satisfaction in business by fewer difficulties
and hurdles to surmount.
Level 4 – In this model, only three variables (business management, adaptive opportunism
and overseas expansionary vision) have a direct relationship with the outcome – financial
rewards. Although the other variables have a significant correlation with financial rewards,
they do not have a direct relationship with it, only an indirect relationship by way of the
three variables. These three variables can be interpreted as strategies used by the Chinese
entrepreneurs towards the success of their businesses.
In summary, the results show supportive relationships between the scales. The model
depicts the relationships clearly. The most important factors associated with financial
rewards are ranked from highest to the lowest, as follows: Confucian piety, business
management, adaptation external hurdles, and overseas expansionary vision. These help to
establish the overall profile of the Chinese entrepreneurs in Box Hill.
In the next sub-sections, the combined group of the two generations (N=200) will be split
into first (N=132) and second generation (N=68). The regression analysis (as listed in
section 7.9.1) will be carried out on both generations separately. The aim is to find out if
the profiles of the two generations are different. Also, separate results can give further
details about each individual group. Hence, more depth and better insight about the two
generations of Chinese entrepreneurs can be obtained.
8.10 Comparison of the Two Generations Multivariate tests were carried out to show the relationships of all scales within the whole
population (N=200). In the multivariate test the results showed an F value of 1.409
(df1=105, and df2 -60697, with significance = 0.004, which is less than 0.05). Statistically,
there were differences between the generations in terms of their entrepreneurial profiles
(see Appendix 19). Therefore, the study of each generation was necessary, and further
statistical analysis was required. Separate regression weights in both first (see Appendix
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13) and second generation (see Appendix 14) entrepreneurs were obtained. The results
indicate that the relationships between the factors are divided into two groups. The results
are summarized as follows:
• Out of a total 32 relationships, 23 relationships (71.9 percent) have the same
‘significance’ in both generations, and these relationships are important (p<0.05) in
both generations.
• The remaining 9 relationships (19.1 percent) shows opposite ‘significance’ between
the first and second generation, as follows:
Table 8.9 Summary of Regression Weights for First and Second Generations
Relationship between 1st Generation 2nd Generation
Confucian Piety Guanxi Connections S NS
Prior Experience Adaptation NS S
Confucian Piety Personal Hurdles S NS
Self Satisfying External Hurdles S NS
Potential Seeking External Hurdles S NS
Self-satisfaction Personal Hurdles NS S
Confucian Piety Business Set-up NS S
Personal Hurdles Bureaucracy &
Regulation & Regulation
S NS
Adaptive Opportunism Financial Rewards S NS
• p-value <0.05 to be counted as significantly different
• S = Significantly different
• NS = Not Significantly different
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The independent sample T-test (assumes normal distributions, with p-value < 0.05 to be
significant) and the Mann-Whitney U Test (does not assume normality, a non-parametric
test) support the differences in significance between the two generations (see Appendices
7.9 and 7.10). The results clearly indicate that there are differences in the significance of
relationships between the two generations. Firstly, the results support the earlier argument
that traditional Confucian values play an important role in Chinese entrepreneurship.
Secondly, the other motivational factors, potential seeking and self-satisfaction, also show a
difference in significance between the two generations. These are due to the differences in
views on dealing with the external and personal hurdles during the journey.
This shift has already shown the reduction of the importance of tradition Confucian values
from the first to the second generation, because Australia (not China or other Chinese
dominant countries) is the host country of the second generation, and it is a fully
westernized country. The embedding of Chinese-ness can no longer be the most important
element in the journey of entrepreneurship of the second generation.
The most important factors associated with financial rewards for first generation Chinese is
therefore in order as follows:
• Confucian piety, with a total standardized effect size of 0.505
• Business management, with a total standardized effect size of 0.410
• Overseas expansionary vision, with a total standardized effect size of 0.364
• Adaptation, with a total standardized effect size of 0.360
• External hurdles, with a total standardized effect size of 0.357
• Business set-up, with a total standardized effect size of 0.296.
These factors are similar to those of the whole pool (N=200) in the previous section.
However, there are two differences. Firstly, the factor ‘overseas expansionary vision’ has
moved to the third rank instead of the fifth in the earlier section. This indicates the higher
importance of the factor due to close links and better overseas know-how in the first
generation. Secondly, there is an addition of ‘business set-up’; it indicates that the first
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generation places a high importance on this factor in establishing the businesses when they
arrive in Australia.
The most important factors associated with Financial Rewards for second generation
Chinese is in order as follows:
• Business management, with a total standardized effect size of 0.605
• Confucian piety, with a total standardized effect size of 0.403
• Adaptation, with a total standardized effect size of 0.340
• Business set-up, with a total standardized effect size of 0.313
• External hurdles, with a total standardized effect size of 0.287
• Overseas expansionary vision, with a total standardized effect size of 0.259.
Although the factors in the second generation are the same as the first generation, the
ranking is different. Firstly, business management instead of Confucian piety is the most
important factor. This shift has already proved the shift of the importance of traditional
Confucian values from the first to the second generation. The importance of overseas
expansionary vision ranks number 6, instead of number 3 in the previous section. The
explanation can be - the second generation become more ‘Australianized’ and localized.
This can also be interpreted as their increased concentration of expanding their businesses
locally. Their host country is Australia instead of various other countries that the first
generation entrepreneurs (overseas Chinese) are attached to. Further discussion can be
found in chapter 9.
Box-plots are used to present the differences of the three variables (guanxi connections,
self-satisfaction and prior experience) graphically (see results in Appendix 18). The box-
plots suggest that the assumption of normality for each generation is not valid. A box-plot
shows skewness if the line in the middle of the box is far from the centre and if the top
whisker has a very different length to the bottom whisker. The results are as follows:
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Guanxi connections
Diagram 8.2 Box-plot: Guanxi connections vs First and Second Generation Entrepreneurs
This can be explained by the notion that the second generation entrepreneurs display a
higher and more important reliance on ‘guanxi connections’ during the journey of
entrepreneurship than the first generation entrepreneurs. The difference is due to their
higher exposure to financial back-up, entrepreneurial foundation and business networking.
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Prior Experience
Diagram 8.3 Box-plot: Prior Experience vs First and Second Generation Entrepreneurs
The statistical difference between the two generations on this construct indicates that the
second generation placed a higher importance of prior experience than the first generation.
Prior experience measures the importance of previous exposure to entrepreneurship. From
the results in Section 7.2.3, 97 percent of second generation entrepreneurs chose ‘role
models’ as an important or very important factor in setting up businesses (vs 78.8 percent
in the first generation). It shows that the entrepreneurs place an important emphasis on
learning from the experiences of their role models. The second generation relies on learning
from others, from the families and from associates the experiences required in carrying out
the businesses.
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Self-satisfaction
Diagram 8.4 Box-plot: Self-satisfaction vs First and Second Generation Entrepreneurs
The results indicate that the second generation places more importance on this construct.
Different from the first generation entrepreneurs who spend more time in feeding their
families, the second generation is more financially independent, and it becomes more
important for them to satisfy their own ‘dreams’ and ‘goals’. These factors become a more
important driving force along with other dimensions in the creation of successful
entrepreneurs.
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8.11 Summary This chapter has presented a systematic investigation into Chinese entrepreneurs in Box
Hill by examining the extent to which the existing entrepreneurial theories were applicable.
The results from the testing of the five hypotheses of the study were supported and
confirmed. The results showed that all of the theories apply to the Chinese–Box Hill
context. A SEM model was used to cross-check the relationships between all scales. The
results were supportive and the profile of Chinese entrepreneurs was established. Priorities
of the scales were found, with Confucian piety being the most important contributor to the
success of a business in the two-generation combined group.
The results pointed out the differences between the first and second generation Chinese in
the initial stages of network development. The two generations built inter-firm networks in
a similar manner, but there was much greater emphasis by the first generation Chinese on
developing a personal relationship as a foundation for other relationships. For the first
generation Chinese, the effects of culture on each stage of relationship development were
predicted in the literature.
This study has provided an overall understanding of the dynamism and performance of
Chinese entrepreneurs in Box Hill. The next chapter presents the concluding profile of
these entrepreneurs and highlights the contributions of this study to the theory of
entrepreneurship. The thesis concludes with a summary of the major findings and
recommendations for policy makers, all stakeholders and further research.
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Chapter 9
Conclusion
9.1 Introduction This study investigates a comprehensive set of variables that provide an understanding of
Chinese entrepreneurship in Box Hill. The findings from the quantitative data support the
five hypotheses that are related to the success of the businesses. In addition, this study
establishes the Chinese entrepreneurial profiles with thirteen independent variables
measured against the dependent variable (financial rewards). The statistical regression
analyses also highlight the two separate generations, showing differences of importance in
the independent variables. These findings present a dynamic picture of Chinese
entrepreneurship in Box Hill. In this concluding chapter, the findings will be presented in a
structured manner according to the sequence of the five research questions representing the
five dimensions of Chinese entrepreneurship in this research: What are the background
factors contributing to the success of the entrepreneurs? What are the motivational factors
that contribute to the success of the entrepreneurs? What are the traditional Confucian
values that contribute to the success of the entrepreneurs? How do the difficulties and
hurdles encountered during the entrepreneurial process contribute to the success of the
entrepreneurs? How does overseas expansionary vision contribute to the growth of the
entrepreneurial venture? Additionally, policy implications and areas that need further
research will be highlighted. However, the research objective and the strategy employed in
the study need to be revisited; they are summarized below.
9.2 Aim of the Study This main aim of this study was to define and provide an understanding of Chinese
entrepreneurs in Box Hill. This thesis developed a framework for understanding immigrant
entrepreneurs in Australia. Specifically, the framework looked look at the behaviour and
operation of first- and second-generation Chinese entrepreneurs in Box Hill in Victoria. In
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this thesis, the entrepreneurial behaviours of two generations of ethnic Chinese
entrepreneurs in Box Hill was studied, with the notion that a study of this kind will further
understanding and possibly provide a profile or model for ethnic entrepreneurship
behaviour for Chinese immigrant entrepreneurs and theoreticians.
The premise of the thesis is that the development of some ‘local’ economies and the
standard of living within the Chinese community will flourish as a result of concentrated
community networking described in the ethnic enclave economic literature. Despite
information on small business formation and the economic contribution of Chinese
entrepreneurs in Australia and other developed countries (Backman 1995, Chin 1988,
Collins 2002, Collins 2003, Li 1988), little is known of the possible transitional change
phenomenon from the first to the second generation entrepreneurs generally, and in
Australia specifically. This scarcity of research on two generations of entrepreneurs in
Australia is a critical omission from our full understanding of entrepreneurship behaviour.
Therefore, there is a need for this research in an economic and social context in order to
identify and appreciate newer entrepreneurs’ specific contributions to the modernization of
economies. Such research will be also useful in understanding the particular needs and
pertinent issues concerning the promotion and development of entrepreneurs’ activities in
present and future generations.
In view of this, Chinese entrepreneurship in Australia was selected, and five dimensions
developed from literature on Chinese entrepreneurship were investigated. The dimensions
were: background of the entrepreneurs, entrepreneurial motivation, traditional Confucian
values, difficulties and hurdles, and overseas expansionary vision. These five dimensions of
the Chinese entrepreneurs in Box Hill were examined in the light of existing
entrepreneurship theories. A multidisciplinary approach was adopted in investigating the
five dimensions, which resulted in rich data and multiple perspectives of Chinese
entrepreneurship and entrepreneurial activities. Investigation of the five dimensions
provided insights into the entrepreneurial behaviours of the first and second generation
ethnic Chinese entrepreneurs in Box Hill. The insights provided an understanding of the
behaviours that are common and different to the generations. Though the ‘Chinese factor’
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was observed in both generations, the adaptation to the economy provided a different
perspective to doing business in Australia for the second generation.
The study’s major findings, which lead to knowledge and understanding of Chinese
entrepreneurs, are summarized in the next section.
9.3 A Reflection on the Theory of Entrepreneurship The review of literature for this study indicates that there is a growing body of research on
Chinese entrepreneurship. However, there is little in existing entrepreneurship literature
about the difference between first and second generation Chinese entrepreneurs in
Australia. Taking cognizance of the complexities and heterogeneity in identifying
entrepreneurs and entrepreneurial activity, the study explores Chinese entrepreneurship
from the perspectives of two classical entrepreneurship theorists’, namely Joseph
Schumpeter (1934) and Israel Kirzner (1999).
Clearly, the entrepreneurial activities of Chinese entrepreneurs support Schumpeter’s and
Kirzner’s economic models of entrepreneurship. This study identified both Schumpeter’s
and Kirzner’s definitions of entrepreneurial activity by asking the research questions of
how the Chinese entrepreneurs start their businesses and what type of motivation they draw
on in business. Two identical forms of entrepreneurship were identified in the Chinese
entrepreneurs. The first involves the creation of new organizations, and the introduction of
new products or processes, new markets, new suppliers and new materials. This mode of
entrepreneurship depicts the Schumpeterian radical innovation idea.
The second form identified with Chinese entrepreneurs is those who have taken over family
businesses or existing businesses, and in other cases have recognized and acted on market
opportunities. This second group also conforms to Kirzner’s view of entrepreneurship that
emphasizes the alert discovery of profitable opportunities. It has been identified in this
study that the second group of entrepreneurs who have taken over existing businesses, or
acted on market opportunities, are just as entrepreneurial as the first generation of Chinese
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entrepreneurs starting ‘new’ products or venturing into ‘new’ markets and ‘new’
businesses.
The study also finds that the outcome of Chinese entrepreneurship coincides with
Schumpeter’s and Kirzner’s perspectives. Schumpeter (1934) talked about being motivated
intrinsically and not necessarily by profits or luxury, although profit and wealth can be an
outcome. Kirzner (1999) believed that it is compulsory for the entrepreneur to make profits
out of his or her endeavours. However, they both perceive the entrepreneur’s activity as
having a positive impact on the economy. Chinese entrepreneurs’ main success indicators
of self-fulfilment, financial independence, status and recognition, and socio-economic
contribution to Box Hill underscore Schumpeter’s and Kirzner’s entrepreneurship models.
Thus, together, Schumpeter’s and Kirzner’s economic views on entrepreneurship apply to
the entrepreneurial process of the Chinese entrepreneurs and provide a general model in
which to understand their entrepreneurship: First, this model explains how the Chinese start
their business ventures by using the knowledge, experiences and resources available to
them in their special socio-economic context. Second, this model explains how the Chinese
identify and exploit opportunities. Third, the model explains the consequences of their
entrepreneurship for themselves and the economy.
Also, entrepreneurship literature has pointed out that whilst definitions vary somewhat, key
features of any definition in relation to entrepreneurship at the broadest level must
encompass the objective of entrepreneurship, the action of the entrepreneur and the desired
outcomes. This study has demonstrated that the Chinese entrepreneurs meet the above set
of criteria within Schumpeter’s and Kirzner’s views of entrepreneurship.
The Chinese entrepreneurs possess the entrepreneurial traits identified in the literature.
They identify profitable opportunities in their own unique environment with the available
resources and socio-cultural demands, and create new businesses; and even those who take
over existing businesses actually reshape and remodel them in substantial ways. This is
clear evidence of entrepreneurial activity. As entrepreneurs, the Chinese entrepreneurs have
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taken something and changed it, or they have created something out of nothing, and they
have taken high financial and personal risks, and consequently achieved success.
Hypotheses were tested for successful Chinese entrepreneurship using independent
variables derived from psychological, motivational, resources-based, social learning,
innovation and networking theoretical perspectives. The results from the testing of the
hypotheses are summarized in chapter 8. Thus, as illustrated in section 8.8, although
support was found for all five hypotheses tested and the inter-relationship of all fourteen
scales in the model, there are differences between first and second generation Chinese
entrepreneurs. There are variations in the degree and type of support, depending on
individual factors. Therefore, the multi-theoretical approach used in this study to
investigate and explore Chinese entrepreneurs has shed light on the myriad of factors which
explain Chinese entrepreneurship, such as their personality traits, motivations, skills and
capabilities, entrepreneurial family background, entrepreneurial activities and problems
encountered, as well as their successes.
9.4 Concluding Profiles of Chinese Entrepreneurs Fourteen independent variables were identified in this study, and they are related to the five
dimensions and the five hypotheses. The results show statistically significant support for all
the hypotheses; hence, these variables can be used to construct profiles of Chinese
entrepreneurs in both generations. Entrepreneurship is related to several established
disciplines including economics, management, psychology and sociology. There are several
different approaches including the above-mentioned disciplines. This gives a rich insight
into Chinese entrepreneurship in Melbourne from different perspectives.
9.4.1 Who Are They? The findings from the study allow us to develop a personal profile (demographics,
personality traits, educational background and work experience) of Chinese entrepreneurs
in Box Hill. It was found that the socio-demographic profiles of the Chinese entrepreneurs
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are diverse, because of their countries of origin (more than eight countries). However, they
are similar in many ways because of traditional ‘Chinese’ values and the entrepreneurial
cultures that they are brought up in. They fall into the economically active age group of 20–
59 (96 percent of the sample). Overall, there was no gender bias in the whole population of
the study (N=200). There were a higher proportion of male entrepreneurs (56.8 percent) in
the first generation while the proportions of both sexes were about the same in the second
generation. This may be due to the fact that males are predominantly the major income
earners in traditional Chinese families, but more females are becoming active entrepreneurs
in the second generation.
The industries that these entrepreneurs engage in are diverse. The ventures range from
wholesale and retail trading in a wide range of products to services-based ventures such as
hairdressing, computer sales business and others. Among the combined group, restaurants
and take-away businesses are the most common industries that the Chinese entrepreneurs
are engaged in. Results show from the participants in this sector fell from 32.6 percent of
first generation to 16.2 percent of second generation; the shift is due to the longer hours and
intensive labour no longer being attractive to the second generation. This is a classic
example of a shift in business type; from labour-intensive businesses to mind-intensive
businesses such as professional and computer-related jobs. This is related to an
‘accumulation’ of resources such as education, human capital, and financial capital. These
positive factors help to build up the ‘wealth’ for the next generation.
In regard to business partnerships, the only apparent difference in this variable is that there
is an increase in family businesses (from 24.2 percent to 36.8 percent) from the first to the
second generation. At the same time, there is a similar decrease in partnerships in the
second generation. This difference may be due to the transfer of family businesses from one
generation to another, which is a traditional way of Chinese entrepreneurship. This tradition
of succession in family businesses cannot be ignored in studies of Chinese
entrepreneurship. This is further supported by the results in section 6.12 that there is an
increase in ‘not starting one’s own business’ (from 14.45 to 27.9 percent) from the first to
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the second generation entrepreneurs, because of the natural succession in the ownership of
family businesses.
With respect to target businesses and customers, while both generations target their
businesses at all localities, there is a difference in preference in the two generations. The
first generation leans towards interstate and overseas, but the second generation prefers
local, i.e. Victorian, set-ups. This result compares well to the finding in the regression
analysis in section 8.10 that the first generation places a higher importance on overseas
expansionary vision than the second generation (standardized regression weights of 0.364
vs 0.259). The first generation entrepreneurs are Chinese who are more deeply rooted in
and related to their countries of origin. Therefore, they are more inclined to expand their
businesses beyond the Victorian boundary and internationally.
Although religion has never played an important role in Chinese history, at either the
political or the familial level (Chan 2008, Cheng 1997), Buddhism and Daoism have been
followed by the overseas Chinese, while some have converted to Christianity (Chan 2008).
The results in this study indicate an increase of Christians in the second generation; this is
due to high exposure and the teaching of Christianity in Australia. Even so, the influences
of religion on entrepreneurship are not important in either generation. In addition,
spirituality is not significant in entrepreneurial behaviour in this study.
9.4.2 What Are the Background Factors? This study identifies the foundation factors that enable the Chinese entrepreneurs to set up
their business ventures and operate them successfully. The findings confirm that these
Chinese entrepreneurs in both generations possess relevant business knowledge, skills,
personal attributes and capabilities which are useful to them when they are establishing
their businesses. Two major factors were identified: guanxi connections and prior
experience.
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Chinese entrepreneurs have developed a reputation for cost efficiency, responsiveness and
flexibility. Family firms are especially better suited to networked production and to
industrial settings where their low or no managerial overheads and their ability to
efficiently organize low-cost labour in non-complex technologies is a key competitive
advantage. Older generations tend to fund their businesses on the basis of past partnerships
rather than on the basis of future prospects – guanxi. Guanxi is important in both
generations in forming networking bonds between existing and prospective business
associates. The emphasis on personal relationships and personal integrity, when properly
sustained, can promote business prosperity. In fact, as noted earlier, it has nurtured a unique
style of doing business among the Chinese. However, this does not mean that institutional
development is not important. When the legal framework is in place, institutional
development can facilitate a lot of impersonal business dealing. In the meantime, it is
important to make it clear that personal assessment and institutional development are not
mutually exclusive. In fact, they are complementary. The results from section 8.3.2 show
that guanxi connections make a more statistically significant contribution to the prediction
of the dependent variable than prior experience. These results also imply that the Chinese
entrepreneurs’ foundation set-up is more guanxi-oriented, and confirm the uniqueness of
guanxi connections in Chinese business culture.
Another important human capital that these Chinese entrepreneurs have is their
entrepreneurial background. A typical entrepreneurial profile in terms of experience and
family background was more clearly defined in the second generation. Adult
encouragement, parents’ occupations and family interpersonal relationships all affect
entrepreneurial tendencies (Light & Gold 2000). The additional adult encouragement, the
role model of a successful entrepreneurial parent, and a supportive relationship which
encourages independence and achievement are factors strongly linked with later
entrepreneurial behaviour. Also, of great importance to the Chinese are rich experiences
acquired from their previous employment, and skills and knowledge from previous
business ventures. They are able to apply this knowledge in the successful operation of
their own businesses. The results from section 8.10 show that the second generation places
a higher importance of guanxi connections than the first generation, the difference being
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due to the higher exposure to financial back-up, entrepreneurial foundations and business
networking.
Obtaining the necessary financing to start and grow a business is generally considered one
of the entrepreneur’s major problems. Cash capital comes from many sources, including
personal savings, banks, government programmes, venture capital funds and business
angels. In Chinese culture, monetary contributions from family and relatives are common
(Hsing 1996, Li 1988). The importance of the family and ethnic community as a source of
financing and employment and as a customer base and support for ethnic entrepreneurs
(Waldinger et al. 1990) cannot be ignored. Family members including spouses, children
and other extended family members are often used as both formal and back-up personnel to
support the business. Family members are always regarded as just trustworthy and
committed as the lead person. This cooperative network of family and community is the
essence of business success. The centrality of family-based social, economic and human
resources is key to their economic and social integration in local Australian society.
Significantly, all the above reasons as to why the Chinese entrepreneurs had chosen the
path to entrepreneurship correlated well with their success. Therefore, these findings show
that no single factor, but rather a combination of financial, personal, business and social
factors support Chinese entrepreneurship in Box Hill.
9.4.3 What Are the Entrepreneurial Motivation Factors? Motivational factors were used to investigate the Chinese entrepreneurial behaviour. The
findings confirm that these Chinese entrepreneurs in both generations possess positive
psychological and economic motivations such as freedom, challenge, potential to expand,
family support and financial back-up. Previous studies (Gilmore 2004, Walker & Brown
2004, Bennet & Dann 2000) have concluded that a combination or range of factors, rather
than any single factor alone, provides the impetus for entrepreneurs to create their own
business ventures. These include both psychological and economic motivators. Two major
factors identified in this research are self-satisfaction and potential seeking.
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In this study, personal attributes, such as desire to extend, potential, strong belief in oneself
and freedom were used to investigate Chinese entrepreneurial behaviour. The respondents
rated themselves very highly on all the listed traits (see section 7.3.2). Besides financial
reasons, personal fulfilment and self-worth are also seen as very important in their decision
to start a business. The overriding factors that emerged are a combination of the need to be
independent, to achieve, to find job satisfaction, to control one’s destiny, to be the boss, to
achieve status and prestige. Additionally, the study identifies that apart from financial and
personal reasons, the Chinese entrepreneurs create their own ventures in order to satisfy
their entrepreneurial spirit, which is to do the kind of work they prefer, to be able to express
their innovative skills, to be recognized for these skills, and to provide a unique product or
services. The results from both generations show only minor differences. This shows the
high importance of all the attributes of the contributing factor (self-satisfaction) in both
generations.
On the other hand, entrepreneurship has provided an opportunity for the immigrants to
discover a new-found sense of accomplishment in supporting themselves instead of relying
on being employed by others and on government welfare systems. In the first generation
Chinese entrepreneurs, disadvantages such as language barriers, cultural unfamiliarity, un-
recognized prior education, inadequate skills and other discriminatory forces can also be
factors that push immigrants from under-employment to engage in entrepreneurial
activities. These potential seeking factors are supported by both the literature and the results
of this study. In Chinese culture, occupation is a significant, visible characteristic that
affects the presentation of the self in society. Social status is the basis for the Confucian
system of social order. The goal of face work is to enhance one’s standing in relevant social
groups through shaping members’ impressions. It relates to social status, achievement and
success and figures prominently in business. Ownership of a business represents
achievement and success for individual Chinese entrepreneurs. It is a status matter, and the
pursuit of this status is influenced by psychological motivation, i.e. self-satisfaction. When
the results of the two motivations, potential seeking and self-satisfaction are compared, the
latter has a higher importance in becoming an entrepreneur (see section 7.3.2). This higher
importance can be found in both generations. This agrees with the notion that Chinese
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entrepreneurs place a higher importance on satisfying their own ‘dreams’ and ‘goals’ by
successful entrepreneurship.
9.4.4 What Are the Traditional Confucian Values? The study is devoted to Chinese entrepreneurship. Therefore, the most important feature
that gives an identity to this group and marks how they do business is traditional Confucian
values. This study identified the traditional Confucian values that influence the Chinese
entrepreneurs to set up their business ventures and operate them successfully: the
importance of the head of the family, guanxi, helping other Chinese, seeking support from
the community, trust and family involvement. The findings confirm that these Chinese
entrepreneurs in both generations place high importance on all these factors, especially
guanxi (90 percent).
These Chinese entrepreneurs are embedded in the traditional Chinese family and social
relations to an extent that Confucian piety ranks the highest in the multiple regression
associated with business success (standardized effect size of 0.473 in the combined two-
generation group). This enforces the uniqueness and importance of traditional Confucian
values to entrepreneurial behaviour. Family is always more important than any individual
member, and harmony is the most important value for all family members. Without
harmony, no family can stand, neither can a family business. Children are taught to restrain
their individualism to maintain harmony in the family. The Anglo-American culture is the
more individualistic, providing a very sharp contrast to the Confucian-influenced cultures.
Collectively, self-exploitation and exploitation of family labour is common among Chinese
families: the unpaid labour is a source of ethnic resources, and the most effective means to
reduce overheads. This is an important aspect of family unity and obligation that Chinese
follow, especially in the entrepreneurial process.
Another important tradition is that, through education and the indoctrination of values, the
younger members of the extended Chinese family learn and accept the responsibility that
they will care for the financial and social well-being of the elderly members in their family.
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The elderly accept care as their right and families have pressure from the wider community
to meet their obligations. Such reciprocal relationships are still considered a distinctive
characteristic of Chinese family cultural values (Ryan 2003).
However, the results in section 8.10 on the regression analysis of the two generations show
that business management instead of Confucian piety is the most important factor in the
success of a business. Although Confucian piety remains the most important factor for the
whole group (N=200), this change of priority has already proved the shift of the importance
of traditional Confucian values from the first to the second generation. The inter-
dependence of the immediate family and the intra-dependence of business associates are the
most important means of bonding between all members and associates. This dependence is
absolutely unique and can be found more in Chinese culture and other cultures which have
established similar patterns of migration in Australia.
9.4.5 What Are the Difficulties and Hurdles? This is the largest section of the study. The contributing factors in this dimension include
personal issues, business issues, organization and management skills, government
involvement, financial and sociological difficulties. These attributes have been identified as
being capable of predicting entrepreneurial behaviour and patterns of activities. These are
the reasons for the Chinese entrepreneurs not only to create their own business ventures but
also to tackle the problems and become successful.
The first-generation entrepreneurs bring into Australia a different business style from that
prevailing in Australia. This experience may be of considerable disadvantage to the
immigrant small business persons who attempt to gain access to small business support
services in Australia (Chan 2001, Ip et al. 1998). It may also create perceptions of
assistance-providers, especially governments and government agencies, which cause
immigrants in small business to actively avoid having anything to do with them (Strahan &
Luscombe 1991). Favourable external conditions enable a project to be completed at half
the original effort, but when the external conditions are unfavourable, Chinese
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entrepreneurs strive to overcome them by searching for new alternatives. They retreat to
their family members and family networks. They restrict their production to small-scales
types, and take short-cuts to produce non-capital-intensive and unsophisticated
commodities, with short gestation periods (Hsing 1996, Tseng 1995).
Many researchers into ethnic entrepreneurship have highlighted the long hours of work that
immigrants put into their businesses to achieve their business dreams. Often this is referred
to as self-exploitation. Waldinger et al. (1990) suggested that self-exploitation is a strategy
used by small immigrant storeowners who open their stores for longer hours and operate
their businesses year round. Collins et al. (1995) also raised the issue of self-exploitation.
39 out of the 42 questions related to the difficulties and hurdles of the entrepreneurs show
comparatively ‘similar’ or ‘no difference’ at all. This implies that the views and attitudes
towards difficulties and hurdles encountered during the journey of entrepreneurship are the
same for both generations. The Chinese entrepreneurs are therefore the same as other
entrepreneurs who require and exhibit good management and organization skills in dealing
with the difficulties and hurdles encountered in the entrepreneurial process. These factors
are the only ones not influenced by Chinese values. However, the emergent profile of the
second-generation entrepreneurs is one of a generation whose values are clearly more
individualistic, less collectivistic and less committed to Confucian philosophy than their
first-generation counterparts. Ralston et al. (1993) describe this phenomenon as
‘crossvergence’, where crossvergence does not mean the Chinese adopt western values, but
that they internalize some aspects of western individualism into their Confucian-based
value system. Thus, they develop a unique perspective or set of values that combine their
own cultural facets with other cultures.
9.4.6 The Importance of Overseas Expansionary Vision This study identified the overseas expansionary vision factors that enable the Chinese
entrepreneurs to see beyond their existing business ventures and prepare for expansion.
This creative and innovative vision is also unique to all immigrant entrepreneurs. The links
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with relatives or friends in the country of origin are often used to provide a reliable source
of supply, access to a market, advice about market prospects and to secure credit. Tracey et
al. (1991) concluded that Chinese entrepreneurs are on the whole successful, innovative and
export-orientated entrepreneurs who have considerable overseas resources, including
financial resources and business networks. These networks provide an advantage when
establishing import/export activities because they provide personalized and trust-based
networks which extend into the community and beyond, into mainstream society and
overseas.
First-generation immigrants usually participate significantly less in social activities in the
wider society. They participate more in the ethnic economy, because most of their time has
to be spent on making a living. Although economic advancement in the new host country
can be achieved, the social cost is substantial. Their friends and networking colleagues are
always restricted to the inner circle of close friends and relatives. Therefore, their local
connections are not as strong as those of the second-generation entrepreneurs. The role of
links to the country of origin and networking can be further explored in the context of the
internationalization of these businesses. There are issues of how much dependency on links
to the country of origin and ethnic resources for business is good for ethnic businesses.
Ethnic business owners need to consider whether they should make themselves stronger in
their host country rather than continue to depend on their resources from their home
country. They also need to decide whether to concentrate on domestic investments rather
than on international dealings.
The results in section 7.6.1 show that all attributes of overseas expansionary vision are
important to both generations. However, the results from the regression analyses of the two
generations indicate a drop in importance in the second generation. The factor ‘overseas
expansionary vision’ moved to third from fifth from the first to the second generation. The
higher importance of the factor in the first generation is due to closer links and better
overseas know-how. This implies that the second generation prefers to expand their
businesses locally.
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9.5 Staircase Effects A diagrammatic representation (see below) illustrates the different elements contributing to
the potential success of Chinese entrepreneurship:
Diagram 9.1 Staircase Effects
X-axis represents the resources build-up of the businesses.
Y-axis represents the potential to succeed in business.
Positive elevation steps (not in any preference order and not including any personal traits)
are: (1) education (2) guanxi connections (3) financial back-up (4) local know-how (5)
language (6) past experience (7) enclave community (8) networking (9) human resources
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and capital, (10) social resources and capital (11) middleman role (12) adoption of local
culture.
These are the skills and potential ‘steps’ or tools that entrepreneurs use to elevate
themselves and enhance the potential to succeed in business. Negative elevation steps are
(not in preference order and not including any personal traits), are: (1) centralized power
through domination of family ownership and control (2) inadequate management and
organizational structuring (3) too sensitive to matters of cost and financial efficiency (4)
limitation of growth.
These positive and negative elevation steps in the staircase change in importance from the
first to second generation, and they are supported by the results of this study. The steps
combine to influence ‘potential to succeed’ only; they do not guarantee success itself. The
results support the notion that difficulties and hurdles during the journey of
entrepreneurship are related to the success of the business, regardless of whether these steps
are positive or negative in nature. In fact, the second generation has its own problem:
competition from within the Australian market, and other localized problems such as
restricted working hours, unionism and local regulations. The difference is that the
problems encountered by the first generation are now replaced by other problems of the
second generation. The entrepreneurial behaviours, no matter how diversified the
definitions are, depend on (1) initiative taking (2) organizing and reorganizing social or
economic mechanisms to turn resources and situations to practical account (3) acceptance
of risk or failure. These ingredients are common to all entrepreneurs.
This staircase effect illustrates that, while other factors increase the potential for success,
the making of success itself is determined by the entrepreneur’s dealing, endurance and
persistence. Other factors (see section 7.9.4, level 4 of the theoretical model) are also
involved in future business expansion for both generations.
At the same time, as can be seen from Diagram 9.2 below, while Chinese-ness decreases as
Australian-ness increases due to assimilation into the host country, the introduction of
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better management and organizational skills, and contact with the general Australian
public, this reduces the importance and character of traditional Chinese business styles.
Since the change has already occurred between the two generations (in a time-frame of
twenty years), what will happen to the third and subsequent generations when the Chinese-
ness decreases further and when the future Chinese generations become ‘true blue Aussies’
and are only different in appearance? This may be a topic for future research.
Chinese-ness Vs Australian-ness
0
20
40
60
80
100
120
1st
Generation
2rd
Generation
Future
Generation??
Pre
cent
age
Chinese-ness
Australian-ness
Diagram 9.2 Chinese-ness and Australian-ness vs the Generations
9.6 Social Integration of Chinese Entrepreneurs While the economic returns of these immigrants are advantageous to the host country, most
immigrants have difficulty assimilating into the new society. This low level of social
integration is not healthy, as these immigrants will choose to live, work and play within
different ethnic clusters. Their integration into the general public, their involvement in day-
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to-day local lives is not easily achievable, whether willingly or unwillingly. Therefore,
although some may achieve the ‘setting up of businesses’, these businesses are by no means
on a larger scale than family-owned.
Sydney’s Chinatown, Parramatta, Burwood, Cabramatta; Melbourne’s Box Hill,
Springvale, Footscray, Richmond, Doncaster are local suburbs that Asian immigrants find
alliance with: the so-called ethnic identities. These suburbs are not only represented by
significantly higher numbers of entrepreneurs who own the businesses in these suburbs, but
also they are places where the first generation immigrants cluster to form groups and
business networks, somewhere they can relate to and feel comfortable without going
outside the physical boundaries of these suburbs.
First-generation immigrants prefer to work in ethnically homogeneous working
environments and interact mostly with co-ethnic workers, co-ethnic supervisors, or co-
ethnic customers. Their opportunities to interact with friends from other groups are limited
and their opportunities for participating in social activities organized by friends from other
groups are few. This also limits the flow of information from the larger society (Fong &
Ooka 2000). Quite often, without adequate English, these first generation immigrants are
intimidated by the difficulties and confusion caused by different languages, laws,
regulations relating to labour, taxation, unions, banking and trade (Ip et al. 1998).
Proficiency in English and length of time in the new country are seen to be the two major
factors in determining the devotion to the new host country. Second-generation
entrepreneurs do not have either problem. In fact, these two advantages facilitate them
enormously in the setting up and management of their businesses. Many are anxious to start
or own a new business, as they want to explore individualistic feelings of self-worth,
responsibility and ability. This is totally different from their parents, since the challenges
have less to do with economic needs. Vertical mobility through higher education enables
the younger generation to move into professional and managerial jobs. The second
generation has resources that enable them to access well-paid jobs in the primary labour
market.
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On the other hand, the Chinese entrepreneurs (especially the second generation) in
Melbourne gradually realize that, in a democratic and pluralistic society like Australia, they
need to be socially participative and politically active. This is necessary not only to gain up-
to-date information about government policies but also to sustain and protect their business
interests. Ethnic community volunteers and leaders (such as ex-mayors Robert Chong of
the City of Whitehorse and John So of the City of Melbourne), who were previously
satisfied with their voluntary community and/or entrepreneurial activities, eventually
decided to become more actively involved in national and local politics.
In terms of the concept of mixed embeddedness, the rise of the Chinese family business can
be seen as located at the intersection of changes in socio-cultural frameworks, on the one
side, and as part of transformation processes in economies and institutional frameworks, on
the other. In this perspective, institutions do matter with respect to how firms are
constituted, delimited, function and, in time, evolve. The organization of markets, the
framework of rules and regulations, together with their enforcement, significantly affect the
strategies of a firm. The Chinese family business can, therefore, be viewed as a strategic
system evolving partly in response to the external environment. Not only is the evolution of
strategies shaped by the external environment, the Chinese business has unique
organizational structure and access to business networks. Such production flexibility, as
well as the ability to minimize transaction costs in the coordination of activities, provides
the best opportunities to the small Chinese family firms in global competition. They adopt
competitive strategies, which involve a short-term view of production, an emphasis on
opportunities for discovery, the utilization of unsophisticated technologies, the pursuit of
imitation, and specialization in international coordination.
Lachman (1983) defined ‘modernization’ at the individual level as a socialisation process in
which one learns new values, attitudes and orientation. The influences of these factors on
the early stages of life (early socialization) and adulthood (late socialization) are different.
Therefore, the ways that the two generations respond to different challenges are different
from each other. According to Lachman (1983), the socialization process differentially
affects modernity changes to core and peripheral values and orientations. In particular, it
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proposes that early socialization primarily affect changes to core values, while late
socialization affects changes to peripheral values. The use of the concepts ‘core’ and
‘peripheral’ in this study carries the same basic assumptions: ‘core’ being the more central,
important or dominant to the individual.
Bloom (1966) suggested that the influences of early life environment are of most
importance in determining human characteristics. However, under extremely powerful
environments such as migration to a new host country, personal characteristics may change
in the direction of either further growth or deterioration. The observations in this study
indicate that, despite their new socio-cultural context, the first generation immigrants are
not fully socialized into the new society and prefer to continue to identify with and support
the ‘home culture’ values.
On the other hand, the second-generation immigrants have early and more prominent
socialization, which induces a total change to both the core and the peripheral dimensions
of the value system. This is supported by the finding in section 7.10 that the two
generations are different on issues such as Confucian piety, business management and
overseas expansionary vision. Simply, this suggests that the second-generation immigrants
have adopted and been socialized into the Australian culture and values more readily than
their parents. The opposing and different views on both the core and peripheral dimensions
of the Australian community are, in fact, a representation of the contrast between eastern
and western cultures. To look at the contrast from another perspective, this can also be seen
as a clash between Confucianism and individualism at the personal and community levels.
Therefore, the author believes that this trend will enhance the assimilation of future
generations into the mainstream of Australian business culture.
9.7 New Hybrid Entrepreneurs An implication of the new generations of entrepreneurs’ greater willingness to embrace
change is that they are more likely to make business decisions based on performance and
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profit opportunities, even at the risk of not conforming to the previously accepted ways of
doing business by the parents. The traditional view of not engaging in business with
foreigners without protracted getting-to-know-you negotiations or guanxi may not be as
important, because of increased self-direction and increased tolerance of ambiguity found
among the second generation. The results indicate that the guanxi connections in the second
generation are more business-oriented than family-friends oriented. This implies a higher
risk-taking orientation, which was formerly greatly repressed in their parents’ attitudes
towards doing business in foreign countries.
To strive and to succeed, future generations of entrepreneurs have to engage in broader and
higher quality goods and services, so as to compete within and outside the enclave. As
ethnic firms grow and diversify, when the second or future generations take over from the
pioneers, the concentration in particular industries may vanish. These groups of
entrepreneurs may be dictated to by school learning and new technologies. Also, their
connection networks may go beyond their parents’. They may not share any distinctive
culture of entrepreneurship that marks them apart from the rest of the Australian society
The author believes that there is one new type of entrepreneur who will serve as a go-
between. This new type can pull different ethnic resources and family resources together,
and can serve both Australia and overseas countries using their bilingual skills, good
Australian education and a fair-go working attitude. Chinese migrants in Australia have
made the smooth but challenging transition between their native and adopted country.
Being involved in the Australian mainstream society, Chinese Australians have achieved
economic adaptation and enjoy living in their new country. In addition, Chinese citizens
who are studying as international students in Australia are potential skilled migrants and are
likely to apply for migration status after completing their studies. It is believed that
Australia continues to be one of the most desired western migration destinations for
Chinese nationals and the magnitude of the Chinese ethnic community in Australia will
continue to grow. In the future, the number of elderly Chinese in Australia is likely to
increase as the majority of current economically active Chinese intend to retire in Australia
and older Chinese are expected to migrate to Australia for family reunion.
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Welsh (1999) put forward the concept of ‘transculturality’, which aims for a multi-meshed
and inclusive understanding of culture. People can make their own choices with respect to
their affiliations, while their actual homeland can be far away from their original homeland.
Thus, the identity of the Chinese second generation in a multicultural society is
‘transcultural’ (Welsh 1999), comprehending both traditional Chinese culture from their
local affiliations, such as families, and Australian culture in the society.
The process of inter-cultural exchange takes place within ethnic groups, and leads to
cultural renewal within the value systems of each ethnic group (Secombe & Zajda 1999).
Chinese younger generations may inherit the traditional Chinese culture from their parents,
but they are meanwhile confronted by the contemporary culture of their society (Strathern
1996). Chinese people are of the ‘both-and’ thinking type, and thus they blend in with the
western culture and learn western ways of doing business. The first generation
entrepreneurs in a western society learn quickly from the western culture. These parents
may use more verbal praise, talk to their children, and give them more freedom and choice
in their own decision-making (Rice 1990, Cobb 1998), a situation that reflects their ‘both-
and’ cultural characteristic. As Slee (2002) pointed out, the younger generation may
become confused about their identity when their family struggles to maintain its ethnic
identity in the face of Australian mainstream culture. For those with parents born overseas,
their identity development is in relation to how well their parents have blended into the
Australian mainstream culture.
Australia will contribute to China’s economy through providing resources such as iron ore
and metals in the future. Trade and investment is an important key to the relationship
between Australia and China. Australia became one of the first countries granted China’s
approved tourism destination (Downer 2002). Overseas Chinese in Australia can help
widen the trade networks of Australian companies in China and even some southeast Asian
countries with large Chinese communities. A great number of mainland Chinese remained
in Australia after the Tiananmen Square incident in 1989 and this migration has provided
Australia with cultural and economic links to different regions of China. This sequence of
the emergence and development of business clusters where social facilities give rise to
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economic necessities, and in turn convert these necessities to business opportunities, is
unique.
This state of affairs turns the spotlight on another development, the enhancement of
globalization due to the tremendous development in digital technology in the last fifteen to
twenty years, which has wiped out all physical boundaries and literally made the world a
global village. Nowadays, anyone can be in touch with anyone else from any part of the
globe, and can run businesses and transactions at the click of a mouse.
From the perspective of the second-generation Chinese immigrants, this technological
advancement is a boost to those who want to pursue entrepreneurship. Immigrants often
have professional and technical experience which they can use to promote development,
and the specific business knowledge of immigrants can assist in the development and
expansion of export markets. One of the principal aims of this thesis is to establish the
assistance needs of immigrant small-business people and identify barriers to business
support services in order to recommend how these businesses can be developed to better
serve other immigrant entrepreneurs.
Culture affects the development of international marketing networks between people of
Chinese origin and of the relatively western country of Australia. Essentially, the author
argues that understanding culture can overcome barriers at the stages of network
development, and it is up to the future generations to cross this hurdle. Therefore, the
second-generation Chinese entrepreneurs who are attached to family-owned businesses
have to look beyond the family circle in order to expand both laterally and vertically. Their
family-owned businesses may give way to modern management practices. Otherwise, the
growth of the business will always be limited and restricted by the quality of the ancestors
and the strength of the network relationships.
In summary, second-generation entrepreneurs have to merge the traditional family-oriented
strategies with those of modern, impersonal and professionally managed corporations. This
will create shorter build-up time plus fast growth of businesses, by combining the
advantages of both working systems. The role of the entrepreneur needs to change with the
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business as it develops and grows. The key to any successful business is market
responsiveness – to combine and utilize all the resources and experiences available.
9.8 Importance of Chinese Entrepreneurs Chinese entrepreneurship is an ever-changing interaction between entrepreneurs and their
social, political and economic environment. Overall, the author believes that both the rate
of ethnic small business formation and the success of existing ethnic small businesses will
strengthen the Australian economy in general and in employment creation.
Australia has the greatest proportion of immigrants of all contemporary western societies.
In 1995, 22.7 percent of Australia population was first generation immigrants (i.e. were
born overseas) (see Table 9.1).
Table 9.1 First generation immigrant presence in major countries in 1995
Country Percent
Australia 22.7
Canada 15.6
USA 7.9
Switzerland 18.1
United Kingdom 3.5
France 6.3
Germany 8.5
Source: System of Observation of Permanent Migration (SOPEMI) 1995
Ethnic entrepreneurship is of considerable importance, comprising around one half of the
small businesses in many states. Between 1983 and 1994, the number of small businesses
in Australia increased by 43 percent, at a rate of 3.35 percent per annum (Collins 1996). It
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is a vital cog of current economy and will also play a role in the internationalization of the
Australian economy through trade, investment and cultural links.
As Chinese families, both mainland and overseas, become more integrated into the larger
global community, they will undoubtedly adapt. Private enterprise and global competition
are changing the way family businesses in mainland China operate. Surrounding cultures
influence overseas family businesses. On one hand, strong cultural roots will cause Chinese
families to be resistant to change and to retain most Confucian values. Even in the United
States, Chinese immigrants tend to maintain close-knit communities that reinforce cultural
values. On the other hand, as conditions change, some adaptations will occur that will
better enable Chinese families, the most important unit in Chinese society, to survive. The
extent to which they change and the effect that change have on family businesses will
provide a strong impetus for studying Chinese family businesses.
In June 2004, 30.2 percent (500,900) of all small business operators in Australia were born
overseas; this represents a rise of 0.8 percentage points from June 2003 (ABS 2002).
Whether these operators are first or second generation entrepreneurs, the 30.2 percent
figure cannot be ignored in terms of social and economic effects within the larger
Australian community.
Networks also increase the aggregate supply of local opportunities. In adding new
opportunities, the immigrant network modifies the economy in the destination region or
locality, thus postponing or possibly even avoiding economic saturation. The same migrant
networks that relocate from one nation to another have or can assume a role in developing
and increasing migrants’ earning opportunities in the destination economy (Light et al.
1990).
Evidence from the study’s findings shows that financial success is seen as the profitability
of business ventures, the number of employees, the expansion of the business through
increasing space or shop outlets, and the diversifying of the business into other areas. The
study provides evidence about the contributions that these Chinese entrepreneurs are
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making to socio-economic development in Box Hill. These Chinese contribute significantly
to Box Hill’s economic development in areas such as business creation and innovation,
employment and job creation and in taxes paid to the government. The study found that the
majority of these entrepreneurs have started new businesses, while a few have bought
existing businesses. Some entrepreneurs have taken over the businesses established by their
parents or have joined in a partnership with a business started by a spouse or a friend. These
entrepreneurs have done much to change and shape businesses through their own
innovation. They have changed the nature of goods or services for sale, changed or
broadened the customer base, added more sales outlets, or introduced new forms of
management and marketing. Thus, new businesses have been created, and value has been
added to the businesses they take over or go into partnership in.
The key issue for many small firms is not necessarily growth per se, but the need to balance
business development needs whilst retaining the creativity, energy or uniqueness that is
distinctive of their smallness. For small family firms, the key issue is not only finding a
strategic balance within the ownership, business and family life cycle. It is also important to
be alert to new distinctive or innovative ways of working that energize and enable people in
family businesses to manage the balance between ownership and family and business issues
in ways that facilitate continuity and creativity. Without this, family businesses can become
stagnant, with attention focused purely on managing family ownership or business tensions
(Fletcher 2004).
9.9 Working with China China is an economic giant among the nations of the world. Its Gross Domestic Product
(GDP) grew at close to 10 percent per year from 1978 to 1997, and it has in recent years
grown to become the third largest consumer economy in the world (Davies 1998). China
should continue to be of increasing importance to the global marketplace. China has
deepened its trade ties with Australia, becoming this country’s second-biggest export
market and source of imports. Australian exports of goods and services to China in 2000-
2005 rose to $15.3 billion, replacing the US as the second-biggest buyer, according to the
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latest figures from the Department of Foreign Affairs and Trade. Australia’s exports to
China rose at a rate of almost 50 per cent in 2006.
Closer government-to-government bilateral agreements and ties between the two countries
help commercial companies on both sides pull together some of their agreements and
people in order to work harder to resolve issues and hurdles presented to both importers and
exporters. Apart from its huge demand for Australian minerals, China has raised the prices
of the resources Australia exports to other countries such as Taiwan, Japan and Korea. At
the same time, China has also pushed down the prices of Australian imports, which in turn
has lowered import prices from other countries. The author believes that the trade gap is not
of great concern, in part because China often serves as a final processing site for many
goods, in effect pooling the trade deficits Australia formerly had with Taiwan, South Korea
and other exporters.
Doing business with China will continue to be challenging for western businesses.
However, the cross-cultural behaviour of both Chinese cultural values and western
management styles will reshape beliefs and attitudes, which may have marked influence on
the values of the Chinese workforce, in particular, its managers. The increasing acceptance
of regulations, accountability and transparency will lift the whole business community to
recognized standards of scrutiny.
On the opposite side, this change will be used as a ‘lubricant’ for Australian businesses to
enter the Chinese market. The evolvement of this new generation of Chinese managers and
entrepreneurs will add to the benefits of the Australian commercial community. Previous
common difficulties, such as language barriers, cultural differences and transparency of
networking will no longer present too big a hurdle. The increased accountability of the
whole business community will add confidence for those westerners who will want to
explore the Chinese markets, both in imports and exports.
This should not only be because of their increased purchasing power, but also because their
consumption behaviour is becoming increasingly congruent with western consumption
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patterns, as a result of heightened individualism. Consequently, they may be less price
sensitive, but more value driven, compared to the older generations. Australia will be
situated in a better position in the international commerce with China than other countries,
because of its ongoing harmonious relationship and deep-rooted immigration history.
9.10 Limitations of the Study This study was limited by the time and resource constraints involved in completing a
doctoral study. The locale of the sample of the study was also restricted to a local
Chinatown (Box Hill), although this municipality is reasonably representative of all the
municipalities in Melbourne. The findings in the study were limited by the extent to which
the respondents were honest, careful and without bias in responding to the survey
instrument and the interviews.
The database of the study was obtained from the Chinese Chamber of Commerce in Box
Hill, a non-profit agency responsible for small businesses in the local area. However, the
database obtained cannot be considered as an exhaustive list of all small businesses in
Melbourne. Thus, any generalizations that are made in the study are limited to the Box Hill
Chinese entrepreneurs’ small and medium enterprises provided in the database.
Nevertheless, 200 usable completed questionnaires were collected out of 267 that were
distributed, yielding a 74.9 percent response rate. According to Hart (1987), response rates
in business surveys vary from 17 percent to 60 percent, with an average of 36 percent.
Therefore the response rate of 74.9 percent was above acceptable for business surveys. It
may therefore be noted in this context that a large sample size and high response rate
lowers the likely error in generalizing the results from the sample to the population
(Neuman 2006).
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9.11 Research Implications and Recommendations for Further Work Today, low wages, a rich resource base and the prospects of a vast emerging middle class
set China as the basis of one of the biggest retail markets of the world. This retail market is
valued at RMB 2.46 trillion (US $296.5 billion), only ten times the value of the retail
market in Hong Kong. However, China’s population is 200 times larger than Hong Kong’s.
Furthermore, it has a young population (six percent aged below 35) and a large demand for
consumer goods (Davies 1997). There are plenty of other prerequisites for doing business
in China, even though the attractiveness of making money is one. For example, companies
must establish close relations with government officials and demonstrate their long-term
commitment to the country. They must also accept the slow pace of decision making in
China and the constant changes to rules and regulations.
These hurdles require personnel who can handle both sides of the east–west divide. They
must be able to demonstrate and facilitate deal-making in different work systems. It is the
sheer size of the Chinese market and its potential for growth, especially among the rural
population, that continues to underpin the continued influx of foreign investment. Outside
of the consumer sector, the immediate prospects appear brighter. China is in desperate need
of foreign expertise and capital to rebuild its economy, and equally advanced countries such
as Australia need the vast market that China provides. For example, telecommunications
also offer good prospects with China, now ranked as one of the fastest growing
telecommunication markets in the world. Australia is at the doorstep to provide such
expertise and skill.
Given the difficult environment in which entrepreneurs operate in China, there has been
substantial interest in how they manage to succeed. One can argue that the difficulties they
face make them a special breed. Successful entrepreneurs in China may well be creating a
new model of entrepreneurship. More importantly, if their firms can survive in China, they
may be well prepared to go beyond China’s borders. Conversely, it can be expected that the
entrepreneurs from Australia will develop an increased interest in going global. Analyzing
the operations of these entrepreneurs may give us insights into how they are likely to
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compete in a global context. Further studies and researches are needed to provide greater
insights to the ethnic entrepreneurial phenomenon.
East Asia dominates Australia’s merchandise exports: $56 billion in 2003, against $15
billion to Europe and $9.5 billion to the US (MOFTEC 1993). Although these figures
indicate a high exit channel for Australian exports, Australian investment in East Asia was
a modest $38.6 billion, against $148 billion in the European Union (56 percent in Britain)
and $211 billion in the US. A distinctive feature of China’s outward foreign direct
investment (FDI) is its high geographic concentration in a few developed countries. While
China’s outward investment reaches more than 152 countries or regions, until 2001 30
percent of Chinese government approved outward direct investment went to the United
States, Canada and Australia, accounting for 13, 9 and 8 percent of the total outflows
respectively (MOFTEC 1993).
This can be attributed to the fact that Australia has a more closely shared culture, and a
common language, with the US and Britain. However, there have been big investment
failures in America and Britain. East Asia, now accompanied by India, is the fastest
growing part of the world. Within twenty years it will dominate global output. It is crucial
for Australian businesses to claim a stake in that future. It is time for business and the
Australian government to respond more energetically, including by making better use of
Australia’s outstanding professional and managerial expertise in Asia, and by considering
inviting Asian businesspeople onto main or advisory boards.
The rush for free-trade agreements with countries in the region already signed or on the
drawing board is opening up opportunities. These deals aim to be comprehensive, and point
those countries’ corporate sectors firmly in Australia’s direction when seeking partners or
investors. For example, business set-up development, biotechnology, genetic engineering,
biomedical researches are only some of the sectors in which Australia clearly has an
immense amount to offer, both in financing structures and in engineering. Australia needs
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to develop strategies to ensure it does more than ship commodities to Asia and import the
labour-added items such as clothing and footwear back.
China is not only the manufacturing state of most countries in the work. It is already a large
market for any size of businesses to go into. At the moment, the political environment is
fairly stable. China enjoys one of the highest rates of economic growth. It is located in the
middle of the world’s fastest growing economic region. These state-owned enterprises have
already begun to change, but slowly, haltingly, in a start-and-stop, two-steps-forward-one-
back rhythm that plays to the beat of economic cycles and political interests. In this decade,
many of the state-owned firms have been ‘corporatized’– given boards that are separate
from the bureaucracies that own them. Others have been turned into joint ventures with
foreign firms. Many have been allowed to keep their profits in return for taking on
responsibility for their costs, and have been exposed to direct competition from foreign
companies.
However, Chinese firms as a whole are inferior in management in comparison with their
counterparts from developed and most newly industrialized countries. The management
competitiveness of firms in China was ranked 30 out of 46 sample countries in 1998. The
major host countries for China’s outward FDI, the United States, Canada, and Australia,
were ranked 1, 11 and 17 respectively, much higher than China (IMD 1998). One of the
main reasons for the relatively poor management competitiveness of Chinese firms is that
China is still in the process of introducing macro- and microeconomic institutions and
practices appropriate for a market economy. Consequently, it will take more time for
Chinese firms to fully embrace and internalize these institutions and practices in their
operations.
Furthermore, compared with their counterparts from developed and newly industrialized
countries, Chinese firms are weak in research and development (R&D). Though the total
employment in R&D in China is very large, less than 30 percent of R&D workers are
employed by firms. Even among those firms with R&D institutions, 37 percent do not have
relevant inputs (NBS 1998). Although China has had a relatively secular cultural system for
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two thousand years and lacks the emphasis on science and technology and the esteem for
economic achievement, Inglehart and Carballo (1997) stated that these have all been
changed, and the heavily bureaucratized, centralized and secularized society has actually
helped facilitate modernization. Australia is in the right time and position to provide goods
and services that are beneficial to both countries.
9.11.1 Policy Implication It is important for all government and policy institutes in Australia to incorporate Chinese
entrepreneurial dimensions in considering all SMEs and growth policies to develop the full
potential of these Chinese entrepreneurs, and increase their productivity. This study
revealed that most Chinese entrepreneurs rely on guanxi connections to develop personal
and business networks rather than use external business support to help them in their
operation. The presence and use of such business support in the areas of legal and
accounting services, feasibility studies, development of business plans, and production,
marketing and management services will be very beneficial to Chinese entrepreneurs at the
start-up phases of their businesses, and also boost their performance in terms of turnover
and growth. In all these areas, public policy initiatives, educational programmes and
adequate financing may well be needed to assure access for Chinese entrepreneurs.
Entrepreneurship should be encouraged by education institutes, government and large
companies, so that new enterprises create jobs and increase the economic output within the
community. There is strong potential for the second generation Chinese entrepreneurs to do
well for and within the community, because of the hybrid mode which is a combination of
eastern and western ways of doing business and managing the enterprise.
Regarding the role of government, whilst an appropriate goal for policy should be to
encourage and support the development of community-based networks of ethnic immigrant
businesses where they already exist, it must be recognized that effective policy intervention
in this area is difficult to achieve and in some cases may not be necessary. Nevertheless, an
extension of the network-broker principle into the ethnic business field would seem to be
294
worth promoting. Facilitating and strengthening existing networks is a key element in
capacity building within ethnic minority communities. Selective use of microfinance funds,
integrated with advisory support, can be linked into this type of network initiative.
It looks imminent that the future economic growth of Australia will be tied to the growth of
Asia, especially China, Japan and India, if one considers the increasing influx of
immigrants from these countries each year. According to an estimate of 1995, small
business employed nearly one half of all the private sector workers in Australia, where
more than half of all small businesses in Australia were owned and operated by first or
second generation immigrants (Collins et al. 1995). This situation highlights the fact that
small and medium sized enterprises are important to the public policy agendas of
government, as this sector facilitates employment opportunities, which is an extremely
important issue for any nation. Therefore, this study acknowledges the importance of
learning about the changing face of entrepreneurship, including its fundamentals and the
influences of the second-generation Chinese entrepreneurs.
The demographic and physical closeness to these countries will present Australia with the
best and most dynamic chances of doing businesses. The author believes that the Australian
business community must be responsive to China’s different possible futures, because a
part of every history is voluntary. Vast as China is, pushed and pulled by great forces both
obvious and hidden, still what the people do matters. Whoever they are – Chinese, offshore
Chinese, Australian legislators, entrepreneurs eager to get into the China market, military
planners, ordinary consumers around the world – how they think of China and the decisions
they make about it have an effect. Some of the brightest possibilities of China’s future
depend on cooperation and involvement, and so do some of the darkest possibilities. If one
is to choose wisely, one has to think about China’s future.
As economic reform in China is characterized by gradual transition and a two-track system,
the development of the market elements and the autonomy of firms will also proceed
gradually. As a result, Australia is one of the countries to receive the economic benefits of
such activities, because of overseas technology and natural resources. Most state
295
governments and the federal government have introduced a range of multicultural policies
to assist in the management of ethnic diversity, to maintain social cohesion and justice and
to harness the skills, education and entrepreneurial ability of all Australians.
On the other hand, Australia has to adapt to the global environment by shifting from selling
its resources to other countries and buying the value-added materials, to promoting itself as
a world leader in biomedical and computer-engineering technologies that cannot be easily
copied by other countries. Australia should re-invent itself as a country independent of
influences by lower-cost labour countries. Globalization has restructured the Australian
economy in all fronts, especially in the manufacturing sector, in which the jobs have been
shifted to lower-cost labour countries.
9.11.2 Future Research This study shows that Chinese entrepreneurs play an important role in job creation and
innovation in the local Chinese economy. Future research will assist in increasing
awareness of the role of Chinese entrepreneurs in the overall Australian economy. This
awareness will boost the image and business ethnics of Chinese entrepreneurs. They will
not just be perceived as good for producing cheap products or working in restaurants; their
great potential and valuable contribution to the development of their communities and
nation will be brought into the limelight and properly valued.
Given that this research concentrated on local Box Hill Chinese entrepreneurs in SMEs,
future research should include Chinese entrepreneurs in large-scale enterprises and in other
parts of the country as well. This would sharpen our knowledge of Chinese
entrepreneurship in Australia and be useful for policy makers and those in the position to
help develop the full potential of Chinese entrepreneurs.
Business success depends on opportunity structure and government and institutional
regulatory structures (Kloosterman 2003) that ideally provide the optimal economic and
business conditions for business start-ups and growth. There is a need for future research
296
into the structures of governments and other stakeholders to create an enabling business
environment for these Chinese entrepreneurs, including the effectiveness of these measures
for Chinese entrepreneurs in SMEs.
9.12 Conclusion Migration is one of the measures undertaken to combat the decline in the growth rate of the
population, due to a fall in the rate of natural increase resulting in an ageing society. Further
economic objectives of migration include the enrichment of workforce skills, the
stimulation of the economy by means of international trade and tourism, and the increase in
export earnings by means of international education. From an economic point of view, the
arrival of different ethnic groups has contributed to the total population and labour force
and the stimulation of economic growth. From a social perspective, ethnic diversity has led
to a change of attitude to one that is more socially tolerant. Through their entrepreneurial
activities, Chinese entrepreneurs have been able to make substantial economic and social
contributions to the economic growth of Box Hill. Their story is a very important and
interesting one which needs much more attention from scholars, the media, practitioners,
and policy makers.
This study supports the theory that multiculturalism is good for business. These immigrants
and the next generations introduce multilingualism, cultural sensitivity, and knowledge,
training and qualifications earned overseas. These attributes reside in many ethnic
entrepreneurs and in the ethnic resources with which they develop their enterprises.
Therefore, further researches are needed to investigate the impact of future generations
(third, fourth and so on) of Chinese entrepreneurs and their contribution to Australian
society.
It is, therefore, not surprising that economic development supporting entrepreneurship or
new venture creation is an attractive policy in most countries. Regardless of location or
country context, the increased attention to economic contributions of entrepreneurship, and
in particular, growing and successful businesses is reflected in the accelerated pace and
297
variety of public and private sector policy initiatives at all levels, including local, regional
and national levels. Various studies have identified that small enterprises, which are
vehicles in which entrepreneurship thrives, are the main drivers of this economic growth.
This thesis fills the literature gap by contributing knowledge of the Chinese entrepreneurs
in Box Hill, and the difference in entrepreneurship between the first and second
generations. Ultimately, the results will provide further insight into the theory of Chinese
entrepreneurship. The study explored and highlighted issues, background, motivations,
traditional Confucian values, difficulties and hurdles, overseas expansionary vision and
successes that are unique to Chinese entrepreneurial experience. This study therefore will
be helpful to future researchers investigating Chinese entrepreneurship and to policy
institutes who need valid and better information to initiate measures to support Chinese
entrepreneurship. Further research will continue to improve our understanding of Chinese
entrepreneurship. Such studies are particularly needed for the future of the Australian and
Chinese economies.
298
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Appendix 1 Research Questionnaire
335
336
337
338
Appendix 2 Form of Disclosure and Informed Consent
Dimensions of Ethnic Entrepreneurship – A study of first and second generation Ethnic Chinese in Melbourne
Investigators
Professor Christopher Selvarajah (Chief investigator), Swinburne University of Technology Mr Henri Lee (PhD Student) Explanation of Project
This study looks at the perceptions and views of both first and second generations ethnic Chinese in Melbourne. Responses are sought from different levels of the Chinese business community in Box Hill. The purpose of the study is to identify characteristics and values related to Chinese ethnic entrepreneurship and ways that businesses are carried out. The items in the attached questionnaire are derived from an analysis of the relevant entrepreneurship literature, especially in the findings of research conducted in similar or related areas. The purpose of the questionnaire is to obtain perceptions as to what constitutes success of different businesses operated by ethnic Chinese in Box Hill, Melbourne. The questions do not seek to make judgments on your performance (or the performance of others). Rather, the research seeks what constitutes successes and the contributing factors in your position as a business operator. Information such as these will provide a better understanding of the factors that influence success of business in a society and will be used in a composite manner only and no individual or group will be singled out. If you are uncertain about a response sought and would prefer not to respond, please feel free not to answer the questions.
Your Participation and Consent
We estimate that you will need about 20 minutes to complete the questionnaire and we hope that you will agree that the project is sufficiently important to warrant this time commitment. We believe that the findings of this project will be of use to the Chinese business community.
339
We appreciate if you would complete all questions even if you find some similar to others. The questionnaire is designed to increase the validity and reliability of the research. The time you spend in completing this questionnaire is of great importance to us. We would appreciate if the answered questionnaire is returned immediately. Anonymously completing and returning the questionnaire, using the prepaid envelope provided, imply consent. You are of course free not to participate in this project.
Privacy Protection
The anonymous information you have provided will be treated confidentially and will not be attributed to you or to your organization; our project is concerned with patterns of responses from groups and with group profiles and no individual or groups will be singled out. The responses will be processed using statistical analysis and the results will be published in journals and conference proceedings. The Australia China Commerce and Economic Association Inc., is supporting the project by way of mail-out. Please note that the researchers have not been given access to personal information (including your contact details) held by Australia China Commerce and Economic Association Inc. Data will be transferred into password-protected computers located in locked offices of the investigators. Only the investigators will have access to this data. The returned questionnaires will retained/disposed of in accordance with Swinburne University of Technology Ethics Code of Research.
Further Information about the Project
Any questions regarding the project entitled ‘Dimensions of Ethnic Entrepreneurship – A study of first and second generations Ethnic Chinese in Melbourne’ can be directed to the Principal Investigator Professor Christopher Selvarajah of the Faculty of Business and Enterprise, Swinburne University on telephone number +61-3- 92148462.
Complaints about the Project
If you have any concern about the conduct of this project, please contact: Research Ethics Officer, Office of Research & Graduate Studies, Swinburne University of Technology, PO Box 218, Hawthorn, Victoria 3122, Australia. Tel: +61-3-9214 5218.
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Appendix 3 Samples of Findings
Country of Origin
32 16.0 16.0 16.060 30.0 30.0 46.019 9.5 9.5 55.520 10.0 10.0 65.529 14.5 14.5 80.020 10.0 10.0 90.0
2 1.0 1.0 91.013 6.5 6.5 97.5
5 2.5 2.5 100.0200 100.0 100.0
AustraliaHong KongVietnamTaiwanChinaMalaysiaNew ZealandSingaporeOther, please stateTotal
ValidFrequency Percent Valid Percent
CumulativePercent
KMO and Bartlett's Test
.823
486.13636
.000
Kaiser-Meyer-Olkin Measure of SamplingAdequacy.
Approx. Chi-SquaredfSig.
Bartlett's Test ofSphericity
Case Processing Summary
200 100.00 .0
200 100.0
ValidExcludeda
Total
CasesN %
Listwise deletion based on allvariables in the procedure.
a.
341
Reliability Statistics
.807 9
Cronbach'sAlpha N of Items
Correlations
1 .205** .105 .027 -.068 .044 .045 -.081 -.055 -.208** .017 .052 .019 .044 .071.004 .137 .702 .337 .532 .526 .256 .438 .003 .812 .465 .784 .536 .317
200 200 200 200 200 200 200 200 200 200 200 200 200 200 200.205** 1 .508** .552** .411** .426** .613** .442** .265** .210** .400** .454** .508** .416** .528**.004 .000 .000 .000 .000 .000 .000 .000 .003 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.105 .508** 1 .548** .404** .370** .358** .358** .196** .150* .341** .311** .403** .284** .355**
.137 .000 .000 .000 .000 .000 .000 .005 .034 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.027 .552** .548** 1 .540** .386** .470** .481** .103 .151* .317** .387** .406** .235** .413**
.702 .000 .000 .000 .000 .000 .000 .147 .032 .000 .000 .000 .001 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
-.068 .411** .404** .540** 1 .426** .416** .681** .360** .530** .612** .412** .433** .504** .417**.337 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.044 .426** .370** .386** .426** 1 .677** .585** .621** .465** .577** .568** .706** .594** .640**
.532 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.045 .613** .358** .470** .416** .677** 1 .577** .469** .389** .502** .610** .711** .558** .642**
.526 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
-.081 .442** .358** .481** .681** .585** .577** 1 .529** .571** .768** .558** .554** .585** .540**.256 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
-.055 .265** .196** .103 .360** .621** .469** .529** 1 .518** .481** .437** .549** .602** .475**.438 .000 .005 .147 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
-.208** .210** .150* .151* .530** .465** .389** .571** .518** 1 .491** .344** .397** .537** .335**.003 .003 .034 .032 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.017 .400** .341** .317** .612** .577** .502** .768** .481** .491** 1 .606** .629** .729** .594**
.812 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.052 .454** .311** .387** .412** .568** .610** .558** .437** .344** .606** 1 .596** .600** .670**
.465 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.019 .508** .403** .406** .433** .706** .711** .554** .549** .397** .629** .596** 1 .703** .720**
.784 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.044 .416** .284** .235** .504** .594** .558** .585** .602** .537** .729** .600** .703** 1 .650**
.536 .000 .000 .001 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
.071 .528** .355** .413** .417** .640** .642** .540** .475** .335** .594** .670** .720** .650** 1
.317 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000200 200 200 200 200 200 200 200 200 200 200 200 200 200 200
Pearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)N
Regroup migrantgeneration
External values
Personal qualities
Self Fulfilment
Future Potential
Assimilation
Infrastructure
Confucian Piety
Bureaucracy
Personal Hardship
External Hardship
Grand Plan
Enterprise Management
Unique Strategy
Maximized Profit
Regroupmigrant
generationExternalvalues
Personalqualities Self Fulfilment
FuturePotential Assimilation Infrastructure
ConfucianPiety Bureaucracy
PersonalHardship
ExternalHardship Grand Plan
EnterpriseManagement
UniqueStrategy
MaximizedProfit
Correlation is significant at the 0.01 level (2-tailed).**.
Correlation is significant at the 0.05 level (2-tailed).*.
342
Group Statistics
115 3.5739 .79715 .0743385 3.9059 .77557 .08412
115 3.6413 .69311 .0646385 3.8000 .80623 .08745
115 3.9870 .73586 .0686285 4.0294 .82683 .08968
115 3.1600 .96435 .0899385 3.0259 .98696 .10705
115 3.5548 .71479 .0666585 3.6306 .99595 .10803
115 3.8634 .74745 .0697085 3.9328 .78543 .08519
115 3.5855 .70247 .0655185 3.4654 .78258 .08488
115 3.3362 .90912 .0847885 3.2333 .94917 .10295
115 3.3971 .84223 .0785485 2.9961 1.05094 .11399
115 3.4186 .92712 .0864585 3.4504 .93613 .10154
115 3.6326 .80249 .0748385 3.7176 .82469 .08945
115 3.7725 .81391 .0759085 3.8039 .78687 .08535
115 3.3014 .85295 .0795485 3.3765 .83814 .09091
115 3.6065 .79200 .0738585 3.7235 .84781 .09196
Regroup migrantgeneration1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation1st generation2nd generation
External values
Personal qualities
Self Fulfilment
Future Potential
Assimilation
Infrastructure
Confucian Piety
Bureaucracy
Personal Hardship
External Hardship
Grand Plan
Enterprise Management
Unique Strategy
Maximized Profit
N Mean Std. DeviationStd. Error
Mean
The following is an example; see chapter 7 for the full details.
Descriptive Statistics
4.0050 .77409 2003.1030 .97382 200
1.4250 .49558 200
Self FulfilmentFuture PotentialRegroup migrantgeneration
Mean Std. Deviation N
343
Correlations
1 .540** .027.000 .702
200 200 200.540** 1 -.068.000 .337200 200 200.027 -.068 1.702 .337
200 200 200
Pearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)NPearson CorrelationSig. (2-tailed)N
Self Fulfilment
Future Potential
Regroup migrantgeneration
Self FulfilmentFuture
Potential
Regroupmigrant
generation
Correlation is significant at the 0.01 level (2-tailed).**.
344
Appendix 4 Consent Letter of Australia-China Commerce and Economic Association Inc.
345
Appendix 5 Pattern Matrix of Factor Analysis
Pattern Matrix (Group 1) Questions Component
To set up your own business, how important is it for you to: 1 2
Have role models among your friends or relatives .831
Obtain assistance or advice (either physical or financial) from your friends or relatives .785
Dress well when you meet your bank .746
Obtain financial assistance from financial institutions, for examples, banks .689
Obtain better education than your peer group .527 .328
Have previous working experiences in business before starting your own -.222 .843
Have had a passion about starting your own business when you were young .733
Work within areas related to your own professional or apprentice skills that you acquired during your school years .251 .528
Make your independent decision without advice or ideas from friends or relatives .206 .484
346
Pattern Matrix (Group 2) Questions Component
Your reasons to become an entrepreneur: 1 2
Desire to extend one’s full potential .886 -.180
Potential to earn more money .794
Freedom to be your own boss .731 .126
Strong belief that you have a good know-how of the businesses that you are in .668 .206
Inheritance of family business -.133 .757
Migration to a new host country, i.e. Australia .739
Dissatisfaction with your previous job .131 .694
Envy of other people’s success in businesses .287 .672
More chances of utilizing taxable expenses and maximizing less taxable income .431 .537
347
Pattern Matrix (Group 3) Questions Component
Your views on the following conditions or difficulties in setting up and running your business: 1 2 3 4 5 6
Differences between Chinese and Australian business culture .625 .191 -.191 .323
Differences between Chinese and Australian business practices .603 .205 -.194 .318
Your skill or education being accepted and recognized by different
accreditation agencies .602 .365 .134
Your business being accepted by the general Australian public .550 .338 -.122 .204
Adoption of Australian ways of doing business with others .466 .428 .154
Location .778 .133
Funds .776 .120 .132
Business skills .127 .735 .175
Skilled employees .727 -.191 .106 .185
Good education level .203 .686 .241 -.232
Sharing power and responsibilities among workers and staff .262 .452 .152 .150
Initial financial back-up from traditional banking institutions .438 .211 .106 .125 .410
Guanxi connection network is important .756
Family members are expected to be more involved and to help each
other’s business -.169 .690 .237
Guanxi within the Chinese community .115 .120 .629 .287
Head of the family should make all decisions -.206 .611 .109
348
Seeking advice and support from elders (such as parents, uncles
and older friends) .202 .537 -.250 .173
Traditional Chinese values and wisdom on doing business .364 .532 .103
Helping other Chinese to set up and run the business -.234 .177 .524 .307 .375 -.135
Racial discrimination .308 .127 .420 .205 .153
Trust between family members, partners and friends is important .213 .463 -.608
Assimilation into Australian culture .316 .270 .410 .233
Regulated rules set by state government .120 -.111 .928
Regulated rules set by federal government .895 -.118
Regulated rules set by local councils .839 .144
Bureaucracy at all levels of government departments .200 .733
Unionism -.123 .147 .194 .688
Regulated workplace environment .353 .532 .116
Longer working hours and less family life .151 .855
Language barrier .161 -.170 .373 .212 .463
Gambling away earnings .218 -.202 .372 .292 .398
349
Pattern Matrix (Group 4) Questions Component
How influential and significant are the following factors or hurdles that you come across in your business: 1 2 3 4 5 6
Asian communities to support your business .734 .112 .164
Locality – the business must be in the areas of higher concentration
of Asian activities .713 .206 .120
Family history of setting up business .666 .263 -.253
Desire to return to country of origin – even if you were born in
Australia .627 .501 -.175
Financial assistance from the family, relatives or friends .618 .134 .237
Competition from other Chinese businesses .604 .133 .290
Parents’ influence and thinking of contributing to Greater China .488 .383
Anything-is-possible attitude in overseas market, such as China .788 .191 -.210
Global trend of doing business in the future – borderless trading .731 .136 .175 -.245
Attractive size of overseas markets .697 .177
More chance to travel and meet different people from different
countries .186 .668 .220 -.207
Feeling that you have the appropriate overseas connections that
other people may not have .123 .631 .214 .162
Cheaper supplies from overseas -.144 .592 -.102 -.137 .376 .324
Potential to make more money .590 .188 -.212 .406
Satisfaction of being more successful than other local Chinese .321 .417 .126 .194
Organization skills .828 -.143
350
Staff management .803
Marketing and strategy planning .790
Vision to expand the business .753
Niche products services in areas where there is less competition. for
example, multilingual legal services in urban areas .157 .602 .275
Sound and transparent accounting methods .135 .475 .174 .114 .294
Helpfulness of current updated workplace reforms introduced by
Howard government, to your entrepreneurship .710 .301
Continuing education, conferences and meetings .159 .706 -.310 .216
Regulations and bureaucratic issues in Australia .138 .665 .230
Penetrating and developing businesses with cheaper supplies from
countries such as China or Taiwan. .121 .788
Fusion-style business, for example Chinese restaurant but with
Western deco, to cater for a wider audience .245 .724
Cut-price strategy to remain in the lead .404 .203 -.184 .480
Incurring family expenses such as in health, education,
entertainment, outings, computers, travels and enjoyment .196 .105 .260 .602
Tax .123 .237 .127 .506
Better legal, accounting and finance knowledge and back-up from
Australia -.165 .458 .204 .476
Competition from other Australian businesses .242 .281 .392
Extraction Method: Principal Component Analysis.
Rotation Method: Oblimin with Kaiser Normalization
351
Appendix 6 Structure Matrix of Factor Analysis
Structure Matrix Group 1
Questions Component To set up your own business, how important is it for you to: 1 2
Have role models among your friends or relatives .832 .321
Obtain assistance or advice (either physical or financial) from your friends or relatives .765 .249
Obtain financial assistance from financial institutions, for example, banks .726 .360
Obtain better education than your peer group .653 .530
Have previous working experience in business before starting your own .102 .758
Have had a passion about starting your own business when you were young .331 .752
Work within areas related to your own professional or apprentice skills that you acquired during your school
years .454 .625
Make your independent decisions without advice or ideas from friends or relatives .392 .563
352
Structure Matrix Group 2
Questions Component Your reasons to become an entrepreneur: 1 2
Desire to extend one’s full potential .818 .160
Potential to earn more money .789 .290
Freedom to be your own boss .779 .406
Strong belief that you have a good know-how of the business that you are in .746 .462
Envy of other people's success in business .545 .782
Dissatisfaction with your previous job .398 .745
Migration to a new host country, i.e. Australia .210 .711
Inheritance of family business .158 .706
More chances of utilizing taxable expenses and maximizing less taxable income .637 .702
Structure Matrix Group 3
Questions Component Your views on the following conditions or difficulties in setting up and running your business: 1 2 3 4 5 6
Differences between Chinese and Australian business culture .757 .258 .454 .586 .276
Differences between Chinese and Australian business practices .753 .306 .472 .589 .276
353
Your skill or education being accepted and recognized by different
accreditation agencies .714 .544 .171 .188 .316 .109
Your business being accepted by the general Australian public .687 .542 .196 .133 .353 .339
Adoption of Australian ways of doing businesses with others .640 .606 .315 .205 .323 .210
Funds .260 .822 .332 .341 .317
Location .331 .813 .212 .270 .281
Business skills .395 .802 .368 .246 .142
Skilled employees .279 .774 .239 -.152 .299 .328
Good education level .439 .732 .204 .267 .287
Sharing power and responsibilities among workers and staff .497 .611 .378 .396 .178
Guanxi connection network is important .223 .271 .750 .219 .217
Guanxi within the Chinese community .372 .348 .732 .347 .410 .279
Family members are expected to be more involved and to help each
other’s business .199 .708 .197 .416
Traditional Chinese values and wisdom on doing business .561 .366 .671 .175 .417 .245
Seeking advice and support from elders (such as parents, uncles
and older friends) .318 .408 .660 -.181 .410 .268
Head of the family should make all decisions .226 .631 .316 .240
Helping other Chinese to set up and run the business .109 .314 .620 .370 .534 .145
Racial discrimination .499 .370 .589 .265 .352 .370
Assimilation into Australian culture .272 .456 .477 .458 .379 .424
Trust between family members, partners and friends is important .183 .340 .499 -.575 .123 .205
Regulated rules set by state government .283 .313 .247 .100 .896 .265
354
Regulated rules set by local councils .326 .282 .305 .860 .358
Regulated rules set by federal government .292 .261 .241 .186 .857 .117
Bureaucracy at all levels of government departments .456 .206 .351 .789 .165
Unionism .280 .112 .399 .310 .758 .299
Regulated workplace environment .585 .344 .329 .698 .325
Longer working hours and less family life .153 .291 .247 .231 .859
Language barrier .325 .554 .284 .375 .607
Initial financial back-up from traditional banking institutions .294 .596 .499 .168 .429 .596
Gambling away earnings .379 .336 .461 .513 .523
Structure Matrix Group 4
Questions Component How influential and significant are the following factors or hurdles that you come across in your business: 1 2 3 4 5 6
Asian communities to support your business .813 .223 .481 .411 .290 .229
Locality – the business must be in the areas of higher concentration
of Asian activities .795 .251 .474 .188 .410 .106
Family history of setting up business .779 .309 .424 .486 .345
Financial assistance from the family, relatives or friends .713 .319 .398 .344 .315 .364
Desire to return to country of origin – even if you were born in
Australia .708 .621 .281 .249 .339 .143
355
Competition from other Chinese businesses .698 .234 .436 .176 .386 .414
Parents’ influence and thinking of contributing to Greater China .655 .572 .407 .302 .384 .241
Anything-is-possible attitude in overseas market, such as China .306 .817 .338 .269 .408
Attractive size of overseas markets .343 .795 .392 .247 .302 .394
Global trend of doing business in the future – borderless trading .339 .775 .412 .363 .300
Feeling that you have the appropriate overseas connections that
other people may not have .434 .765 .544 .399 .268 .274
More chance to travel and meet different people from different
countries .403 .753 .491 .224 .117 .311
Potential to make more money .155 .690 .417 .186 .589
Cheaper supplies from overseas .138 .679 .225 .486 .457
Better legal, accounting and finance knowledge and back up from
Australia .188 .641 .462 .345 .280 .639
Satisfaction of being more successful than other local Chinese .533 .610 .487 .253 .296 .407
Marketing and strategy planning .410 .320 .846 .384 .314 .299
Staff management .329 .365 .833 .390 .297 .263
Organization skills .268 .326 .807 .318 .103 .329
Vision to expand the business .427 .301 .799 .274 .299 .308
Sound and transparent accounting methods .478 .338 .728 .431 .357 .512
Niche products services in areas where there is less competition. for
example, multilingual legal services in urban areas .496 .361 .713 .220 .505 .205
Helpfulness of current updated workplace reforms introduced by
Howard government, to your entrepreneurship .399 .284 .436 .787 .431 .137
356
Regulations and bureaucratic issues in Australia .463 .334 .454 .770 .400 .155
Continuing education, conferences and meetings .214 .243 .428 .761 -.129 .326
Penetrating and developing businesses with cheaper supplies from
countries such as China or Taiwan .429 .364 .426 .197 .871 .225
Fusion-style business for example Chinese restaurant but with
Western deco, to cater for a wider audience .428 .286 .412 .382 .798 .164
Cut-price strategy to remain in the lead .642 .379 .493 .691 .239
Incurring family expenses such as in health, education,
entertainment, outings, computers, travel and enjoyment .417 .248 .484 .411 .239 .686
Tax .400 .384 .565 .329 .291 .655
Competition from other Australian businesses .452 .316 .538 .186 .294 .544
Extraction Method: Principal Component Analysis.
Rotation Method: Oblimin with Kaiser Normalization
357
Appendix 7 Relationships between Generation and Other Demographic Variables
Demographic variable Chi-Square* df p-value
1. Country of Origin 82.677 8 0.000
2. Gender 0.519 1 0.471
3. Industry 14.23 5 0.014
4. Position 5.034 2 0.081
5. Targeted Business 7.856 4 0.097
6. Targeted Customers 2.208 2 0.331
7. Age of Respondents 1.190E2 5 0.000
8. When did you arrive in Australia 1.957E2 4 0.000
9. Religion of Respondent 13.386 3 0.004
10. Are you highly spiritual 12.263 5 0.031
11. Which type of Migrant are you 1.535E2 2 0.000
12. Did you start your own business 5.352 1 0.021
Chi-Square Test – where the numbers for some variables are large, the Chi-Square test has doubtful reliability, even though the p-
values of four variables are 0.000. Upon more careful examination, the results (p= 0.000) of these four questions are meaningless and
can be ignored: Country of Origin, Age of Respondents, When did you arrive in Australia? Which type of Migrant are you?
358
Appendix 8 Correlations between Various Constructs
Variable 1 2 3 4 5 6 7 8 9 10 11 12 13 14
1 1 0.508 0.552 0.411 0.426 0.613 0.442 0.265 0.210 0.400 0.454 0.508 0.416 0.528
2 0.508 1 0.548 0.404 0.370 0.358 0.358 0.196 0.150 0.341 0.311 0.403 0.284 0.355
3 0.552 0.548 1 0.540 0.386 0.470 0.481 0.103 0.151 0.317 0.387 0.406 0.235 0.413
4 0.411 0.404 0.540 1 0.426 0.416 0.681 0.360 0.530 0.612 0.412 0.433 0.504 0.417
5 0.426 0.370 0.386 0.426 1 0.677 0.585 0.621 0.465 0.577 0.569 0.706 0.594 0.640
6 0.613 0.358 0.470 0.416 0.677 1 0.577 0.469 0.389 0.502 0.610 0.711 0.558 0.642
7 0.442 0.358 0.481 0.681 0.585 0.577 1 0.529 0.571 0.768 0.558 0.554 0.585 0.540
8 0.265 0.196 0.103 0.360 0.621 0.469 0.529 1 0.518 0.481 0.437 0.549 0.602 0.475
9 0.210 0.150 0.151 0.530 0.465 0.389 0.571 0.518 1 0.491 0.344 0.397 0.537 0.335
10 0.400 0.341 0.317 0.612 0.577 0.502 0.768 0.481 0.491 1 0.606 0.629 0.729 0.594
11 0.454 0.311 0.387 0.412 0.568 0.610 0.558 0.437 0.344 0.606 1 0.596 0.600 0.670
12 0.508 0.403 0.406 0.433 0.706 0.711 0.554 0.549 0.397 0.629 0.596 1 0.703 0.720
13 0.416 0.284 0.235 0.504 0.594 0.558 0.585 0.602 0.537 0.729 0.600 0.703 1 0.650
14 0.528 0.355 0.413 0.417 0.640 0.642 0.540 0.475 0.335 0.594 0.670 0.720 0.650 1
Notations: (1) Potential Seeking (2) Self-satisfaction (3) Confucian Piety (4) Guanxi connections (5) Prior Experience (6) Assimilation
(7) External Hurdles (8) Personal Hurdles (9) Business Set-up (10) Bureaucracy & Regulation (11) Business Management (12)
Overseas Expansionary Vision (13) Adaptive Opportunism (14) Financial Rewards
359
Appendix 9 Regression Weights of Total Population (N=200)
Estimate S.E. C.R. P Label
Guanxi connections <--- Confucian Piety .217 .064 3.395 *** Confucian Piety associated with increased
Guanxi connections
Guanxi connections <--- Self-satisfaction .497 .069 7.249 *** Self Satisfying associated with increased
Guanxi connections
Prior Experience <--- Self Satisfying .354 .066 5.342 *** Self Satisfying associated with increased
Prior Experience
Prior Experience <--- Guanxi
connections .285 .062 4.577 *** Guanxi connections associated with
increase Prior Experience
Assimilation <--- Confucian Piety .527 .060 8.754 *** Confucian Piety associated with increased Assimilation
Assimilation <--- Prior Experience .209 .067 3.109 .002 Prior Experience associated with increased Assimilation
Personal Hurdles <--- Confucian Piety .375 .093 4.013 *** Confucian Piety associated with increased
Personal Hurdles
External Hurdles <--- Self-satisfaction -.221 .072
-
3.072.002 Self satisfying associated with reduced
External Hurdles
External Hurdles <--- Potential Seeking .241 .068 3.538 *** Potential Seeking associated with
increased External Hurdles
External Hurdles <--- Confucian Piety .748 .085 8.822 *** Confucian Piety associated with increased
External Hurdles
360
Estimate S.E. C.R. P Label
Personal Hurdles <--- Potential Seeking .361 .075 4.816 *** Potential Seeking associated with increase
Personal Hurdles
Personal Hurdles <--- Self-satisfaction -.362 .079
-
4.579*** Self Satisfying associated with reduced
Personal Hurdles
External Hurdles <--- Assimilation .270 .067 4.024 *** Assimilation associated with increased
External Hurdles
Personal Hurdles <--- Assimilation .262 .074 3.539 *** Assimilation associated with increased
Personal Hurdles
Business Set-up <--- Assimilation .461 .059 7.832 *** Assimilation associated with increased
Business Set-up
Business Set-up <--- Confucian Piety .185 .063 2.944 .003 Confucian Piety associated with increased
Business Set-up
Business Set-up <--- Guanxi
connections .361 .055 6.604 *** Guanxi connections associated with
increased Business Set-up
Business Management <--- Business Set-up .337 .052 6.487 *** Business Set-up associated with increased
Business Management
Bureaucracy & Regulation <--- Assimilation .519 .070 7.449 *** Assimilation associated with increased
Bureaucracy & Regulation & Regulation
Bureaucracy & Regulation <--- Self-satisfaction -.278 .070
-
3.962*** Self Satisfying associated with reduced
Bureaucracy & Regulation & Regulation
Business Management <--- External Hurdles .199 .039 5.117 *** External Hurdles associated with increased
Business Management
361
Estimate S.E. C.R. P Label
Business Management <--- Assimilation .281 .058 4.892 *** Assimilation associated with increased
Business Management
Bureaucracy & Regulation <--- Personal Hurdles .180 .062 2.930 .003 Personal Hurdles associated with increased
Bureaucracy & Regulation & Regulation
Bureaucracy & Regulation <--- Confucian Piety .287 .082 3.483 *** Confucian Piety associated with increased
Bureaucracy & Regulation & Regulation
Overseas Expansionary
Vision <--- Business Set-up .372 .054 6.911 *** Business Set-up associated with increased
Overseas Expansion Vision
Adaptive Opportunism <--- External Hurdles .330 .043 7.690 *** External Hurdles associated with increased
Adaptive Opportunism
Overseas Expansionary
Vision <--- External Hurdles .300 .044 6.883 *** External Hurdles associated with increased
Overseas Expansion Vision
Adaptive Opportunism <--- Business
Management .329 .058 5.676 *** Business Management associated with
increased Adaptive Opportunism
Adaptive Opportunism <--- Bureaucracy &
Regulation .208 .044 4.674 *** Bureaucracy & Regulation associated with
increased Adaptive Opportunism
Financial Rewards <--- Business
Management .415 .065 6.409 *** Business Management associated with
increased Financial Rewards
Financial Rewards <--- Adaptive
Opportunism .162 .060 2.706 .007 Adaptive Opportunism associated with
increased Financial Rewards
Financial Rewards <--
Overseas Expansionary
Vision .329 .054 6.121 *** Overseas Expansion Vision associated
with increased Financial Rewards
362
Appendix 10 Standardized Regression Weights of Total Population (N=200)
Estimate
Guanxi connections <--- Confucian Piety .219 Confucian Piety associated with increased Guanxi connections
Guanxi connections <--- Self-satisfaction .467 Self Satisfying associated with increased Guanxi connections
Prior Experience <--- Self-satisfaction .368 Self Satisfying associated with increased Prior Experience
Prior Experience <--- Guanxi connections .315 Guanxi connections associated with increase Prior Experience
Assimilation <--- Confucian Piety .521 Confucian Piety associated with increased Assimilation
Assimilation <--- Prior Experience .185 Prior Experience associated with increased Assimilation
Personal Hurdles <--- Confucian Piety .326 Confucian Piety associated with increased Personal Hurdles
External Hurdles <--- Self-satisfaction -.158 Self satisfying associated with reduced External Hurdles
External Hurdles <--- Potential Seeking .217 Potential Seeking associated with increased External Hurdles
External Hurdles <--- Confucian Piety .574 Confucian Piety associated with increased External Hurdles
Personal Hurdles <--- Potential Seeking .368 Potential Seeking associated with increase Personal Hurdles
Personal Hurdles <--- Self-satisfaction -.294 Self Satisfying associated with reduced Personal Hurdles
External Hurdles <--- Assimilation .210 Assimilation associated with increased External Hurdles
Personal Hurdles <--- Assimilation .230 Assimilation associated with increased Personal Hurdles
Business Set-up <--- Assimilation .442 Assimilation associated with increased Business Set-up
Business Set-up <--- Confucian Piety .175 Confucian Piety associated with increased Business Set-up
Business Set-up <--- Guanxi connections .339 Guanxi connections associated with increased Business Set-up
363
Estimate
Adaptive Opportunism <--- Business Set-up .372 Business Set-up associated with increased Business Management
Bureaucracy & Regulation <--- Assimilation .471 Assimilation associated with increased Bureaucracy & Regulation & Regulation
Bureaucracy & Regulation <--- Self-satisfaction -.232 Self Satisfying associated with reduced Bureaucracy & Regulation & Regulation
Adaptive Opportunism <--- External Hurdles .271 External Hurdles associated with increased Business Management
Adaptive Opportunism <--- Assimilation .298 Assimilation associated with increased Business Management
Bureaucracy & Regulation <--- Personal Hurdles .186 Personal Hurdles associated with increased Bureaucracy & Regulation & Regulation
Bureaucracy & Regulation <--- Confucian Piety .257 Confucian Piety associated with increased Bureaucracy & Regulation & Regulation
Overseas Expansionary Vision <--- Business Set-up .404 Business Set-up associated with increased Overseas Expansion Vision
Adaptive Opportunism <--- External Hurdles .425 External Hurdles associated with increased Adaptive Opportunism
Overseas Expansionary Vision <--- External Hurdles .403 External Hurdles associated with increased Overseas Expansion Vision
Adaptive Opportunism <--- Business
Management .311
Business Management associated with increased Adaptive Opportunism
Adaptive Opportunism <--- Bureaucracy &
Regulation .229
Bureaucracy & Regulation associated with increased Adaptive Opportunism
Financial Rewards <--- Business
Management .411 Business Management associated
with increased Financial Rewards
Financial Rewards <--- Adaptive
Opportunism .170 Adaptive Opportunism associated
with increased Financial Rewards
Financial Rewards <--- Overseas
Expansionary Vision.331
Overseas Expansion Vision associated with increased Financial Rewards
364
Appendix 11 Standardized Total Effects of Total Population (N=200)
1 2 3 4 5 6 7 8 9 10 11 12 13
4 .000 .467 .219 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
5 .000 .515 .069 .315 .000 .000 .000 .000 .000 .000 .000 .000 .000
6 .000 .095 .534 .058 .185 .000 .000 .000 .000 .000 .000 .000 .000
7 .217 -.138 .686 .012 .039 .210 .000 .000 .000 .000 .000 .000 .000
8 .368 -.272 .449 .013 .043 .230 .000 .000 .000 .000 .000 .000 .000
9 .000 .201 .485 .365 .082 .442 .000 .000 .000 .000 .000 .000 .000
10 .068 -.237 .591 .030 .095 .514 .000 .186 .000 .000 .000 .000 .000
11 .059 .066 .526 .157 .096 .520 .271 .000 .372 .000 .000 .000 .000
12 .087 .026 .472 .152 .049 .263 .403 .000 .404 .000 .000 .000 .000
13 .126 -.093 .591 .061 .068 .369 .510 .043 .116 .229 .311 .000 .000
14 .074 .020 .473 .125 .067 .363 .332 .007 .307 .039 .464 .331 .170
Notations: (1) Potential Seeking (2) Self-satisfaction (3) Confucian Piety (4) Guanxi
connections (5) Prior Experience (6) Assimilation (7) External Hurdles (8) Personal
Hurdles (9) Business Set-up (10) Bureaucracy & Regulation (11) Business Management
(12) Overseas Expansionary Vision (13) Adaptive Opportunism (14) Financial Rewards
365
Appendix 12 Regression Weights of First and Second Generation
First Generation N= 132 Second Generation N= 68
Estim. S.E. C.R. p Label Estim. S.E. C.R. p Label
Guanxi
connections <---
Confucian
Piety .330 .082 4.054 *** S .068 .086 .789 .430 NS
Guanxi
connections <---
Self-
satisfaction .397 .084 4.737 *** S .555 .104 5.347 *** S
Prior
Experience <---
Self-
satisfaction .378 .076 4.975 *** S .261 .130 2.003 .045 S
Prior
Experience <---
Guanxi
connections .204 .072 2.812 .005 S .514 .135 3.796 *** S
Assimilation <--- Confucian
Piety .555 .070 7.880 *** S .474 .108 4.382 *** S
Assimilation <--- Prior
Experience .098 .080 1.223 .221 NS .359 .120 2.983 .003 S
Personal
Hurdles <---
Confucian
Piety .395 .105 3.782 *** S .168 .169 .993 .321 NS
366
First Generation N= 132 Second Generation N= 68
Estim. S.E. C.R. p Label Estim. S.E. C.R. p Label
External
Hurdles <---
Self-
satisfaction -.367 .092 -4.012 *** S .007 .113 .060 .952 NS
External
Hurdles <---
Potential
Seeking .295 .085 3.480 *** S .201 .109 1.845 .065 NS
External
Hurdles <---
Confucian
Piety .823 .108 7.645 *** S .670 .133 5.046 *** S
Personal
Hurdles <---
Potential
Seeking .179 .082 2.176 .030 S .703 .138 5.091 *** S
Personal
Hurdles <---
Self-
satisfaction -.157 .089 -1.767 .077 NS -.599 .144 -4.173 *** S
External
Hurdles <--- Assimilation .236 .093 2.543 .011 S .227 .090 2.531 .011 S
Personal
Hurdles <--- Assimilation .324 .090 3.595 *** S .241 .114 2.113 .035 S
Business Set-
up <--- Assimilation .562 .078 7.192 *** S .349 .088 3.947 *** S
Business Set-
up <---
Confucian
Piety .106 .082 1.281 .200 NS .254 .095 2.679 .007 S
367
First Generation N= 132 Second Generation N= 68
Estim. S.E. C.R. p Label Estim. S.E. C.R. p Label
Business Set-
up <---
Guanxi
connections .378 .068 5.547 *** S .454 .108 4.211 *** S
Business
Management <---
Business Set-
up .358 .065 5.489 *** S .276 .088 3.130 .002 S
Bureaucracy
& Regulation <--- Assimilation .523 .096 5.434 *** S .525 .105 5.016 *** S
Bureaucracy
& Regulation <---
Self-
satisfaction -.265 .083 -3.182 .001 S -.306 .134 -2.281 .023 S
Business
Management <---
External
Hurdles .177 .046 3.817 *** S .248 .070 3.546 *** S
Business
Management <--- Assimilation .326 .078 4.185 *** S .230 .085 2.690 .007 S
Bureaucracy
& Regulation <---
Personal
Hurdles .205 .088 2.334 .020 S .141 .093 1.522 .128 NS
Bureaucracy
& Regulation <---
Confucian
Piety .259 .105 2.461 .014 S .328 .133 2.464 .014 S
Overseas
Expansionary <---
Business Set-
up .345 .067 5.167 *** S .426 .091 4.688 *** S
368
First Generation N= 132 Second Generation N= 68
Estim. S.E. C.R. p Label Estim. S.E. C.R. p Label
Vision
Adaptive
Opportunism <---
External
Hurdles .386 .054 7.150 *** S .168 .062 2.689 .007 S
Overseas
Expansionary
Vision
<--- External
Hurdles .322 .054 5.997 *** S .244 .076 3.231 .001 S
Adaptive
Opportunism <---
Business
Management .237 .074 3.225 .001 S .545 .084 6.511 *** S
Adaptive
Opportunism <---
Bureaucracy &
Regulation .201 .059 3.393 *** S .242 .058 4.195 *** S
Financial
Rewards <---
Business
Management .359 .072 4.954 *** S .640 .142 4.498 *** S
Financial
Rewards <---
Adaptive
Opportunism.191 .067 2.832 .005 S -.011 .134 -.082 .934 NS
Financial
Rewards <---
Overseas
Expansionary
Vision
.354 .064 5.515 *** S .267 .096 2.776 .005 S
369
Appendix 13 Standardized Total Effects of First Generation (N=132)
1 2 3 4 5 6 7 8 9 10 11 12 13
4 .000 .378 .324 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
5 .000 .509 .077 .237 .000 .000 .000 .000 .000 .000 .000 .000 .000
6 .000 .046 .584 .021 .090 .000 .000 .000 .000 .000 .000 .000 .000
7 .261 -.258 .711 .004 .015 .169 .000 .000 .000 .000 .000 .000 .000
8 .201 -.131 .544 .006 .026 .294 .000 .000 .000 .000 .000 .000 .000
9 .000 .158 .505 .367 .045 .500 .000 .000 .000 .000 .000 .000 .000
10 .039 -.236 .601 .011 .046 .508 .000 .194 .000 .000 .000 .000 .000
11 .063 .014 .553 .151 .049 .552 .240 .000 .391 .000 .000 .000 .000
12 .112 -.053 .494 .138 .023 .259 .431 .000 .371 .000 .000 .000 .000
13 .152 -.176 .606 .038 .028 .317 .551 .042 .088 .215 .225 .000 .000
14 .095 -.050 .505 .113 .032 .360 .357 .009 .296 .044 .410 .364 .204
Notations: (1) Potential Seeking (2) Self-satisfaction (3) Confucian Piety (4) Guanxi
connections (5) Prior Experience (6) Assimilation (7) External Hurdles (8) Personal
Hurdles (9) Business Set-up (10) Bureaucracy & Regulation (11) Business Management
(12) Overseas Expansionary Vision (13) Adaptive Opportunism (14) Financial Rewards
370
Appendix 14 Standardized Total Effects of Second Generation (N=68)
1 2 3 4 5 6 7 8 9 10 11 12 13
4 .000 .577 .085 .000 .000 .000 .000 .000 .000 .000 .000 .000 .000
5 .000 .503 .039 .455 .000 .000 .000 .000 .000 .000 .000 .000 .000
6 .000 .152 .455 .138 .302 .000 .000 .000 .000 .000 .000 .000 .000
7 .191 .035 .648 .028 .061 .201 .000 .000 .000 .000 .000 .000 .000
8 .641 -.364 .227 .028 .062 .205 .000 .000 .000 .000 .000 .000 .000
9 .000 .264 .453 .411 .112 .371 .000 .000 .000 .000 .000 .000 .000
10 .102 -.209 .561 .074 .162 .537 .000 .160 .000 .000 .000 .000 .000
11 .064 .137 .488 .177 .140 .462 .338 .000 .314 .000 .000 .000 .000
12 .063 .138 .429 .205 .073 .243 .329 .000 .477 .000 .000 .000 .000
13 .105 .018 .560 .120 .134 .442 .396 .047 .164 .292 .522 .000 .000
14 .054 .119 .403 .160 .103 .340 .287 -.001 .313 -.003 .605 .259 -.011
Notations: (1) Potential Seeking (2) Self-satisfaction (3) Confucian Piety (4) Guanxi
connections (5) Prior Experience (6) Assimilation (7) External Hurdles (8) Personal
Hurdles (9) Business Set-up (10) Bureaucracy & Regulation (11) Business Management
(12) Overseas Expansionary Vision (13) Adaptive Opportunism (14) Financial Rewards
371
Appendix 15 Multiple Regression of 14 Scales (N=200)
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) .079 .251 .315 .753
Prior Experience -.028 .062 -.025 -.452 .652
Self-satisfaction .062 .073 .059 .856 .393
Potential Seeking -.015 .058 -.018 -.260 .796
Assimilation .130 .071 .134 1.825 .070
Business Set-up .046 .070 .050 .658 .511
Confucian Piety .004 .085 .004 .050 .960
Bureaucracy & Regulation .004 .057 .005 .078 .938
Personal Hurdles -.058 .052 -.068 -1.122 .263
External Hurdles .026 .066 .035 .396 .692
Overseas Expansionary
Vision .250 .064 .249 3.938 .000
Business Management .269 .081 .264 3.322 .001
Adaptive Opportunism .172 .077 .178 2.246 .026
Guanxi connections .093 .062 .093 1.484 .140
a. Dependent Variable: Financial Rewards
372
Appendix 16a Covariances of the Three Factors (N=200)
Estimate S.E. C.R. P Label
Confucian Piety <--> Potential Seeking .548 .069 7.942 *** Moderate positive correlation between Confucian Piety and Potential Seeking
Confucian Piety <--> Self-satisfaction .308 .050 6.117 *** Moderate positive correlation between Confucian Piety and Self Satisfying
Self-satisfaction <--> Potential Seeking .405 .060 6.702 *** Moderate positive correlation between Self Satisfying and Potential Seeking
Appendix 16b Correlations of the Three Factors (N=200)
Estimate
Confucian Piety <--> Potential Seeking .681 Moderate positive correlation between Confucian Piety and Potential Seeking
Confucian Piety <--> Self-satisfaction .481 Moderate positive correlation between Confucian Piety and Self Satisfying
Self-satisfaction <--> Potential Seeking .540 Moderate positive correlation between Self Satisfying and Potential Seeking
373
Appendix 17 Independent T-test and Mann-Whitney U Test of 14 Scales
Independent
Samples T-test
MannWhitney
Test
Scale t-value df p-value Z p-value
Guanxi connections -4.860 157 0.000 -4.811 0.000
Prior Experience -2.364 123 0.020 -2.859 0.004
Self-satisfaction -2.180 145 0.031 -2.243 0.025
Potential Seeking -0.673 198 0.502 -0.721 0.471
Assimilation -1.541 198 0.125 -1.698 0.090
Business Set-up -0.979 198 0.329 -1.262 0.207
Confucian Piety -0.402 198 0.688 -0.687 0.492
Bureaucracy & Regulation 0.224 198 0.823 -0.045 0.964
Personal Hurdles 1.954 198 0.052 -1.773 0.076
External Hurdles -1.504 198 0.134 -1.460 0.144
Overseas Expansionary
Vision
-1.645 198 0.102 -1.840 0.066
Business Management -1.069 198 0.287 -1.112 0.266
Adaptive Opportunism -1.835 198 0.068 -1.762 0.078
Financial Rewards -1.583 198 0.115 -1.808 0.071
374
Appendix 18 Mean Comparison between Two Generations
Variable 1st Generation (N=132) 2nd Generation (N=68)
Mean Sd Mean Sd
Confucian Piety 3.9593 0.80958 4.0092 0.87442
Self-satisfaction 3.9223 0.78823 4.1654 0.72484
Potential Seeking 3.0697 0.96155 3.1676 1.00126
Guanxi connections 3.5379 0.82627 4.0772 0.69682
Prior Experience 3.6174 0.70942 3.8860 0.78635
Personal Hurdles 3.3207 0.85843 3.0441 1.10315
Business Set-up 4.4975 0.89219 4.6275 0.88526
Bureaucracy & Regulation
& Regulation
3.3030 0.90747 3.2721 0.96579
Assimilation 3.5212 0.77941 3.7147 0.95092
External Hurdles 3.9217 1.08803 4.1642 1.06446
Business Management 3.7424 0.81112 3.8701 0.77900
Adaptive Opportunism 3.2551 0.85144 3.4853 0.81839
Overseas Expansion
Vision
3.6013 0.81977 3.7996 0.78320
Financial Rewards 3.5909 0.81158 3.7831 0.81601
375
Appendix 19 Multivariate Test on 2 Generations combined
Box’s Test of Equality of Covariance Matricesa
Box’s M 161.904
F 1.409
df1 105
df2 60697.326
Sig. .004
Tests the null hypothesis that the observed covariance matrices of the dependent
variables are equal across groups.
a. Design: Intercept + gen1 + gen2 + gen1 * gen2
Multivariate Testsb
Effect Value F Hypothesis df Error df Sig.
Partial Eta
Squared
Intercept Pillai’s Trace .978 599.579a 14.000 185.000 .000 .978
Wilks’ Lambda .022 599.579a 14.000 185.000 .000 .978
Hotelling’s Trace 45.374 599.579a 14.000 185.000 .000 .978
Roy’s Largest Root 45.374 599.579a 14.000 185.000 .000 .978
376
gen1 Pillai’s Trace .000 .a .000 .000 . .
Wilks’ Lambda 1.000 .a .000 191.500 . .
Hotelling’s Trace .000 .a .000 2.000 . .
Roy’s Largest Root .000 .000a 14.000 184.000 1.000 .000
gen2 Pillai’s Trace .000 .a .000 .000 . .
Wilks’ Lambda 1.000 .a .000 191.500 . .
Hotelling’s Trace .000 .a .000 2.000 . .
Roy’s Largest Root .000 .000a 14.000 184.000 1.000 .000
gen1 * gen2 Pillai’s Trace .000 .a .000 .000 . .
Wilks’ Lambda 1.000 .a .000 191.500 . .
Hotelling’s Trace .000 .a .000 2.000 . .
Roy’s Largest Root .000 .000a 14.000 184.000 1.000 .000
a. Exact statistic
b. Design: Intercept + gen1 + gen2 + gen1 * gen2
377
Appendix 20 Total Variance % and Cronbach’s Alpha of 14 Scales
Dimension Factors KMO Variance Cronbach’s Alpha
1
Guanxi connections
0.823
0.359 0.626
Prior Experience 0.274 0.801 2
Self-satisfaction 0.862
0.376 0.802 Potential Seeking 0.350 0.793
3 Assimilation 0.909 0.183 0.843 4
Business Set-up
0.922
0.212 0.884 Confucian Piety 0.211 0.855 Bureaucracy &
Regulation 0.241 0.903
Personal Hurdles 0.119 0.664 External Hurdles 0.245 0.884
Overseas Expansionary
Vision
0.240 0.899
Business Management
0.279 0.885
Adaptive Opportunism
0.158 0.809
5 Financial Rewards
0.922 0.131 0.769
378
Appendix 21 General Linear Regressions of 14 Scales (N=200)
Dimension Factors R-square F- value Sign. Beta Value 1
Guanxi connections
0.266
35.75
p<0.001
0.440
Prior Experience 0.124 2
Self-satisfaction 0.224
28.415
p<0.001
0.265 Potential Seeking 0.275
3 Confucian Piety 0.291 81.446 p<0.001 0.540 4
Bureaucracy & Regulation
0.607
42.398
p<0.001
-0.011
Personal Hurdles -0.098 External Hurdles 0.119
Business Management
0.286
Adaptive Opportunism
0.219
Assimilation 0.164 Business Set-up 0.190
5
Overseas Expansionary
Vision
0.449
161.3
p<0.001
0.670
379
Appendix 22 Multivariate Tests on Gender Difference for 14 Scales (N=200)
Multivariate Testsb
Effect Value F Hypothesis df Error df Sig.
Partial Eta
Squared
generation Pillai’s Trace .190 3.070a 14.000 183.000 .000 .190
Wilks’ Lambda .810 3.070a 14.000 183.000 .000 .190
Hotelling’s Trace .235 3.070a 14.000 183.000 .000 .190
Roy’s Largest Root .235 3.070a 14.000 183.000 .000 .190
P2Gender Pillai’s Trace .056 .769a 14.000 183.000 .702 .056
Wilks’ Lambda .944 .769a 14.000 183.000 .702 .056
Hotelling’s Trace .059 .769a 14.000 183.000 .702 .056
Roy’s Largest Root .059 .769a 14.000 183.000 .702 .056
generation * P2Gender Pillai’s Trace .068 .956a 14.000 183.000 .500 .068
Wilks’ Lambda .932 .956a 14.000 183.000 .500 .068
Hotelling’s Trace .073 .956a 14.000 183.000 .500 .068
Roy’s Largest Root .073 .956a 14.000 183.000 .500 .068
a. Exact statistic
b. Design: Intercept + generation + P2Gender + generation * P2Gender No significant gender effect (Wilks Lambda = .059, F(14,183) = .769, p = .702) and no significant interaction between gender and generation (Wilks Lambda=.932, F(14,183) = .956, p = .500).
380
Appendix 23 Ethics Approval Letter from Swinburne University Keith Wilkins 29/03/2007 12:34 pm >>> To: Prof Christopher Selvarajah/Mr Henri Lee, FBE Dear Chris SUHREC Project 0607/105 Dimensions of Multi-Ethnic Entrepreneurship - A Study of First and Second Generation Ethnic Chinese in Melbourne Prof C Selvarajah FBE Mr Henri Lee Approved Duration: 23/03/2007 to 30/09/2007 Ethical review of the above project protocols was carried out by Swinburne’s Human Research Ethics Committee (SUHREC) at its Meeting 2/2007 held 23 March 2007 and, I am pleased to advise, approved as resubmitted. In arriving at its decision, the Committee noted your detailed responses to the informal queries/concerns put to you to facilitate the ethical review. The standard on-going ethics clearance conditions are as follows: - All human research activity undertaken under Swinburne auspices must conform to Swinburne and external regulatory standards, including the current National Statement on Ethical Conduct in Research Involving Humans and with respect to secure data use, retention and disposal. - The named Swinburne Chief Investigator/Supervisor remains responsible for any personnel appointed to or associated with the project being made aware of ethics clearance conditions, including research and consent procedures or instruments approved. Any change in chief investigator/supervisor requires timely notification and endorsement. - The above project has been approved as submitted for ethical review by or on behalf of SUHREC. Amendments to approved procedures or instruments ordinarily require prior ethical appraisal/ clearance. SUHREC must be notified immediately or as soon as possible thereafter of (a) any serious or unexpected adverse effects on participants and any redress measures; (b) proposed changes in protocols; and (c) unforeseen events which might affect continued ethical acceptability of the project. - At a minimum, an annual report on the progress of the project is required as well as at the conclusion (or abandonment) of the project. - A duly authorised external or internal audit of the project may be undertaken at any time. Please contact me if you have any concerns or queries about on-going ethics clearance. The SUHREC project number should be cited in communication. Best wishes for the project. Yours sincerely Keith Wilkins Secretary, SUHREC ******************************************* Keith Wilkins Research Ethics Officer Office of Research and Graduate Studies (Mail H68) Swinburne University of Technology P O Box 218 HAWTHORN VIC 3122 Tel: 9214 5218