Success and Failure of Entrepreneurship in the UAE
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This research project seeks to uncover the characteristics of business success and failure from the perspective of the UAE entrepreneurs directly involved in the business decision making process. For this purpose, an in-depth interviewing of 21 small and medium entrepreneurs from the UAE has been conducted with a view to understanding their perception of business strategies and personal qualities, which may contribute to both success and failure in entrepreneurship. Furthermore, the participants’ opinions on entrepreneurship conditions in the UAE will be considered in order to make recommendations for the improvement of the nation’s business environment.
Keywords: business strategies, success and failure, UAE, entrepreneurship
Success and Failure of Entrepreneurship in the UAE
The problem of entrepreneurial performance and success is often addressed in the professional literature as this issue appears to be crucial for evaluating and improving the performance of the economy as such. In particular, the problems of entrepreneurial success and failure seem to be specifically relevant for small and medium enterprises (SMEs), whose owners are directly engaged in making business and effectively responsible for steering the development of their own firms. Given the growing meaning of the ‘international SME’ firm model in global markets (Knight, 2001), the problem of a possible correlation between the entrepreneur’s personal qualities and strategies utilized by him/her in the day-to-day management of SME’s activities should be of the utmost importance for both domestic and international researchers.
UAE economic policy is characterized by the growing emphasis on regionally and internationally oriented SMEs as the possible engines of economic growth (AlBawaba, 2012). In particular, the emirate of Dubai has recently become a major center for SME entrepreneurship with more than 95% of the emirate’s enterprises belonging to this category and almost 40% of Dubai’s workforce being employed by these firms (Emirates 24/7, 2012). Numerous SME aid and assistance programs have been introduced by the Dubai Government, as well as by those of the other emirates with a view to attracting and retaining creative entrepreneurial cadres that would contribute to the nation’s economic success. While many of these enterprises thrive as a result of the beneficial governmental policy, others are still teetering on the brink of bankruptcy or far behind in comparison with their competitors at least. Hence, it is important to elucidate the possible association between an entrepreneur’s personal business capacity and success (or failure) of his/her enterprise.
There are a number of competing theories of entrepreneurship, whose proponents seek to offer alternative accounts of the factors and qualities bearing an impact on entrepreneurial efficiency. The Giessen-Amsterdam Model of entrepreneurial success is frequently mentioned in the studies of researchers, who support a psychological perspective on entrepreneurial efficiency (Rauch & Frese, 2007; Chattopadhyay & Ghosh, 2008). This model proceeds from an assumption that “general (broad) personality traits may affect the personality dynamics of setting goals and developing strategies”, which have a direct impact on business success (Rauch & Frese, 2007, p. 46). In particular, such broad personality traits as extraversion, openness to experience, agreeableness and conscientiousness were singled out as those, which affect specific personality traits deemed to be positively correlated with entrepreneurial success (e.g. the need for achievement, risk taking, innovativeness, autonomy, locus of control, etc.) (Rauch & Frese, 2007, p. 47). Thus, the two categories of goals (i.e. growth goals and ‘visions’) are linked with action strategies leading to either business creation or success while the influence of the external business environment is counted as a separate independent variable (Rauch & Frese, 2007).
Nevertheless, such apparently smooth picture of the correlation between psychological traits and penchant for entrepreneurship may be placed under doubt by the conflicting and contradictory results of numerous empirical studies that were overwhelmingly conducted with the use of quantitative research approaches. For instance, Cooper and Gimeno-Gascon (1992) report that no significant correlation between entrepreneurial success and the person’s internal locus of control was found while Brockhaus (1982) demonstrates that the propensity for risk taking between entrepreneurs/business managers and the rest of the population does not show any significant differences. Therefore, it may appear that a purely quantitative approach to the study of the psychology of entrepreneurship is not sufficient, and the more unorthodox, mixed methods in research are warranted to address this issue.
As it was asserted by Johnson and Onwuegbuzie (2004), strict adherence to either qualitative or quantitative methods of social and behavioral research does more harm than good to the development of this research area. Therefore, it is necessary to assume a pragmatically oriented approach to selecting and combining data collection and analysis methods from both research paradigms in order to attain a more comprehensive perspective on the research problems under consideration.
Several types of mixed methods research design are described by methodologists. Creswell et al. (2003) presents an overview of several basic classifications. Broadly speaking, a mixed methods research “involves the collection or analysis of both quantitative and qualitative data in a single study in which the data are collected concurrently or sequentially, are given a priority, and involve the integration of the data” at the specific stage(s) of the research (Creswell et al., 2003, p. 212). Johnson and Onwuegbuzie (2004) generally differentiate all mixed methods research designs in mixed-model (“mixing qualitative and quantitative approaches within or across the stagesof the research process”) and mixed-method (“the inclusion of a quantitative phaseand a qualitative phase” in the study at large) (Johnson & Onwuegbuzie, 2004, p. 20). Given the focus of this research project presented in the research proposal, the mixed method research design should be selected. The first phase of data analysis is made of the grounded theory based on the generation and selection of appropriate analytical categories while the second phase will involve a quantitative assessment of the findings obtained in the first stage. In this way, both triangulation and complementarity of the research findings may be achieved (Greene et al., 1989).
For this purpose, appropriate conceptualization of the mixed research based analysis will be used as it is recommended by Onwuegbuzie and Teddlie (2003). In particular, qualitative data reduction and transformation will be implemented to quantify the qualitative data obtained from the interviews with participants. In this way, the more comprehensive understanding of the relationship between subjective and objective realities of the research participants may be attained.
The participants of this study were chosen from SME entrepreneurs involved in various business ventures in the emirates of Abu Dhabi and Dubai. In total, data from 21 individuals, ranging in age between 25 and 56, are collected and analyzed. The main criterion for inclusion as a participant was the overall length of the business with minimum of 5 years being specified to control the variable of entrepreneurial experience. In this way, the perspectives of more experienced entrepreneurs may be incorporated in the survey findings as the duration of their activities would make their opinions more valuable with respect to the analysis of the factors contributing to business success/failure.
16 out of 21 participants were male, reflecting the extant gender imbalance within the UAE entrepreneurial and professional-managerial classes. The participants’ educational background was more or less equivalent. 13 out of 21 hold the MBA or equivalent level university degree (which 9 of them acquired after being in business for more than 5 years) while 1 of the participants was a postgraduate student in one of Abu Dhabi’s business schools. The rest of the participants have a high school graduation certificate with 3 of them receiving a Bachelor’s or equivalent degree at the university level. Their business ventures were mainly concentrated in the services sector with 8 of the participants being owners of the software firms, 3 possessing the hospitality facilities, and 8 engaging in miscellaneous service businesses. 12 participants were from Dubai and 9 from Abu Dhabi, reflecting the diverse conditions for SMEs in these two emirates.
Access and Ethical Issues
According to Creswell (2007), the research participants are entitled to disclose or not to disclose information asked by the researcher. Furthermore, the researcher’s establishment of “rapport with the participants” is instrumental in securing access to their “detailed perspectives about responding to an action or process” (Creswell, 2007, p. 125). Subsequently, the author of this research project has taken all appropriate measures to respectively approach to the individuals selected for participation in this study and ask them for their permission to organize the open-ended in-depth interviews with them on the research questions provided in the research proposal. As the participants provided explicit written permission to the researcher and agreed to spend an average of 1.5 hours for the requested interview, one may believe that the appropriate rapport was established between the researcher and the participants.
Afterwards, the issue of the participants’ privacy protection would necessarily raise itself. Even though all participants belong to relatively privileged social strata, the researcher understands well that the disclosure of their identities may lead to possible adverse consequences for their standing/reputation in their social world. Hence, all the interviews were conducted upon the participants’ anonymity.
Finally, the problem of power relationship between the interviewee and the interviewer should be considered. In particular, Kvale (2006) points to the problem of one-sided interviews in social and behavioral research, when the interviewer determines the flow of the interviewees’ narrative. To prevent such situation, the researcher was taken utmost care to promote a dialogical type of interviewing with the participants being able to ask the interviewer’s own opinion and respond to it. Thus, the problem of power balance is apparently solved.
Entry into the field. Making contact with prospective participants was secured by sending formal letters of request to the offices of SMEs owned and operated by the latter. A detailed letter containing research proposal and guidelines was also sent to each participant with special emphasis on ethical and privacy issues implied by the research focus. In general, 50 such letters were sent with 22 meeting a positive response on behalf of business owners. However, one of prospective participants was eventually unable to take part in the research process, citing personal issues.
After receiving written responses from the participants, a schedule of the initial interview with each of them was provided. The participants were presented with the option of either selecting a pseudonym or participating under a numerical designation (e.g. ‘Participant No.4’). Thus, both kinds of the participants’ identification may be encountered in this project. Finally, each participant was notified of his/her right not to answer at all or reply to the interviewer’s questions selectively, as well as the opportunity to review the information presented as the research findings before the project’s composing.
Data sources. Each of the participants engaged in the in-depth open-ended interview with the researcher, with the average length of 90 minutes. The questions presented to the participants were virtually identical to the research questions outlined in the research proposal. Thus, all of them were asked three basic questions: “In your opinion, what are the characteristics of a true entrepreneur?”; “What are the qualities found in entrepreneurs that make them efficient in their business?”; “What are the main aspects of failure in one’s entrepreneurship?”. The researcher largely assumed the role of an active listener, offering additional remarks to specify/clarify the issues of interest. In general, the conversation between the researcher and the interviewees was held in a cordial and mutually respectful manner, reinforcing the potential objectivity of the research findings.
Data collection and analysis. The collection of data from the research participants was conducted through the use of interview as the most reliable form of data collection in primarily qualitative research procedures. Given the focus of this research, the unstructured open-ended interview form was selected in the researcher’s communication with the participants. In order to facilitate the subsequent data analysis, the audiotaping and note taking procedures were used by the researcher. In such a way, the information outlined by the participants may be better structured at the stage of its analysis. On the whole, 31.5 hours of audiotapes and almost 150 pages of interview transcripts were collected by the researcher, forming the basis for the analysis of survey data.
Analysis of the information presented by the research participants was carried out in two phases. At the first one, a basically qualitative research approach was utilized with the emphasis on the grounded theory based on the analysis methods. At the second stage, quantification of the categories saturated in the course of the previous analytical phase was performed in order to introduce a statistical element in the predominantly qualitative research perspective. In this way, the more comprehensive and multifaceted research focus may have been achieved.
As it is described by Strauss and Corbin (1998), the grounded theory research process basically transpires in three main stages. At the first one, the open coding process should establish key codes and categories of the data procured from the interviews with the participants. The open coding’s main purpose is “the discovery of concepts” (Strauss & Corbin, 1998, p. 102) that may guide further research and enable the researcher to elucidate the relationships between distinct phenomena involved in the study’s object. The concept represented by the relevant code may be defined as “an abstract representation of an event, object, or action/interaction that a researcher identifies as being significant in the data” (Strauss & Corbin, 1998, p. 103). Similarly, the codes may be viewed as “tags or labels for assigning units of meaning to the descriptive or inferential information compiled during a study” (Miles & Huberman, 1994, p. 56). While the delineation of distinct concepts may occur in a variety of ways, the present research proceeds from the assumption about the association between the participant’s opinions on the respective concepts’ significance and their relevance for the study purpose. To guarantee such relationship in the future, the researcher often asked the participants to identify core ‘phrases’ or ‘meanings’ in their interviews after showing them their interviews’ transcripts. Thus, their participation in the research was extended.
As it was noted by Glaser and Strauss (1967), the foundation of the grounded theory methodology is a constant comparison method. Focusing on comparable patterns in the interviews and their transcripts, the researcher sought to group distinct concepts offered by the participants into the relevant categories. Later, as it was recommended by Strauss and Corbin (1998), differentiation of these categories into subcategories or properties was carried out in order to establish the basic building blocks of the central phenomena in the study.
The axial coding process followed open coding as a stage, on which disparate categories may be integrated and their interrelationships specified (Strauss & Corbin, 1998). Within the framework of this study, the phenomenon of market research was validated as the research’s central phenomenon, which would fit well with the propositions contained in the research proposal.
The qualitative stage of the research was completed with the inclusion of the selective coding process. According to Strauss (1987), this stage “pertains to coding systematicallyand concertedly for the core category” (p. 33). Defining the core code would enable the researcher to identify the main pattern or central phenomenon, guiding the development and interrelationship of the full set of research phenomena. Consequently, all other phenomena under inquiry will be located within the set framework of co-relationships with the central phenomenon of the study. Hence, the causal, contextual, and intervening conditions, as well as the participants’ stated strategies for achieving business success and avoiding failure, together with the potential consequences of these latter will be presented and analyzed within the scope of this research.
As provided by the study’s mixed methods research design, the qualitative data analysis stage will be followed by the quantitative period, which encompasses a quantitative assessment of the qualitative codes and their categories with a view to subjecting them to the respective quantitative analysis. As it was presented by Onwuegbuzie and Teddlie (2003), the main aim would be to reduce the relevant descriptive codes to their generic categories or themes in order to measure their intensity effect sizes. Depending on the latter, it would be reasonable to measure the cumulative intensity effect size for each central theme, which indicates the comparative importance of various subjects for the study at large (Onwuegbuzie & Teddlie, 2003, p. 357).
Reliability and validity. The problem of reliability and validity in studies, where the qualitative research paradigm is dominant, may be much harder to tackle than in the case of purely quantitative research designs (Shah & Corley, 2003, p. 1829). Two main validation approaches may be established as the follows: trustworthiness in the presentation of Lincoln and Guba (1985) and pragmatic usefulness presented by Locke (2001). Given the scope and focus of the study, Locke’s approach seems to be best applicable to this case. According to the author, the grounded theory based research needs to be both understandable to the research participants leaving the phenomena under inquiry and possess “a greater range of analytic generalizability”, i.e. be applicable to other similar situations (Locke, 2001, p. 60). While the former condition was clearly met, the attainment of the latter may be problematic. Hence, the quantitative analysis phase was added to the study in order to ensure its potential for external validity.
The analysis of data collected by the researcher proceeded in two stages: the grounded theory analysis being utilized at the beginning and the quantification method at the latter one. The presentation of results of the former stage will follow the general framework established by Strauss and Corbin (1998) while those of the latter one will be presented in a separate section.
Causal Conditions of the Success and Failure Phenomena
According to Strauss and Corbin (1998, p. 131), causal conditions of a research phenomenon are the representatives of “sets of events or happenings” that have an impact on the phenomenon. In this study, three main types of causal conditions were identified from the results of interviews with the participants. These are (a) the factors pertaining to access to business information and investments; (b) the ones connected with the proper understanding of the market and customer needs; and (c) the focus on innovations and technological development. Therefore, it is necessary to review these three categories.
The problem of business information and investments’ access figured high upon the interviewees’ list of concerns. For instance, a 36-year old software engineering entrepreneur from Dubai remarks that “you would want to receive the newest information from the IT markets – both here in the Gulf and in New York - if you seek to outpace your competitors.” Another entrepreneur, a 42-year old owner of a small hospitality facility in Abu Dhabi says that “doing hotel business in our times depends on the number of contacts and Internet connections (sic) you have.” This person has been conducting business transactions in this field at least 10 years in accordance with his own admission; thus, his opinion on this issue may be taken as relatively authoritative. Finally, a 36-year old female entrepreneur, who has been working in the communications business for 6 years, mentioned the problem of “gaining additional investments” as one of the crucial ones in determining the chances of success for a business venture. She claimed that 2 of her friends had failed in their business endeavors due to the credit crunch that resulted from the 2009 economic crisis, attributing their failure predominantly “to the lack of funding.” Thus, one may infer that the problem of lending and investment, in addition to that of access to information and/or contacts, is regarded as important by experienced UAE businesspeople.
The customer segment’s understanding was also almost upheld by all the participants as a significant determinant of business success. A 51-year old car repairs firm owner from Dubai notes that “the customers are our base, thus, we are constantly interested in their opinion.” He explained that the firm he had been leading for the last 7 years could not conceivably survive and even less prospered without a permanent mechanism of data collection with respect to the customers’ services and preferences, as well as their perspectives on the quality of the firm’s services. This point of view was validated through similar recollections by a 29-year old computer accessories’ firm owner from Abu Dhabi, who asserted that, in his firm’s 5-year long history, he had always paid considerable attention and dedicated significant effort to the problem of reaching out to customers by introducing the special customer benefits programs and similar perks. This entrepreneur claimed that customers were more likely to turn to his firm for sales after they saw the benefits of these programs at first hand.
Finally, innovation management was a tangible field of concern for many respondents. For instance, the hotel owner, who has already been mentioned above, observed that he always tried to follow and introduce the newest technological innovations (e.g. a free Wi-Fi network) to his establishment. Similarly, a 40-year old car manufacturer from Dubai asserted that he had repeatedly ordered the newest automatic robot hands and other manufacturing equipment from the leading Japanese and South Korean producers in order to keep pace with technological change. Thus, the connection between the entrepreneurs’ motivation to achieve and secure success in business on the one hand and their interest in technological innovations on the other hand may be evident at this point.
Phenomena of an Entrepreneurial Efficiency or Failure
Several major phenomena pertaining to the concepts of efficiency and failure were uncovered in the course of the present research. Three subjective states of presence or lack may be considered significant by the researcher with respect to the ongoing discussion. These states may include (a) confidence, (b) risk taking, and (c) the ability to comprehend the viewpoints of one’s business partners.
The concept of ‘confidence’ was defined by the majority of respondents with such specific personality traits as the keen sense of business developments, the ability to plan one’s actions, and intuitive understanding of the business environment. Most participants expressly indicated that their business success and their firms’ longevity had been predicated upon the possession of exactly these traits. For example, a 39-year old construction contractor from Dubai told the researcher that he had always felt able to understand the “main winds” of the market, such as changes in the market’s structure, and made enough use of this psychological capacity to try and plan his subsequent business actions. As this contractor has accumulated a number of business contacts in the course of his 8-year long participation in this business, he was able to combine his own insights and planning skills with the objective data from his colleagues and/or informants, contributing to his greater capacity to withstand tide of the construction market’s rises and falls.
In the same vein, a 45-year old owner of the computer services business from Abu Dhabi mentioned that, in the course of his business activities spanning the time frame of more than 10 years, he had never allowed his employees “to make decisions on their own” without his decisive input. His planning patterns included a comparative evaluation of several distinctive opportunities offered by the market at the moment, which he contrasted with one another proceeding from both his substantial experience in this field and “intuition” as he decided to term his insights with respect to decision making. While this entrepreneur’s claim that he “has never failed” in his predictions should be taken with a substantial dose of skepticism, the apparent success of his business venture may lead one to believe that such claim was based on some fairly rational grounds.
The aspect of risk taking was also affirmed in many respondents’ interviews. For instance, the construction contractor, whose case has been already stated in this section, mentioned that he had always been keen to taking risks in his business plans, even though some of his plans could be unsuccessful and cost him dearly. When he was asked to define the share of successful plans in the course of his venture’s operations, this businessperson opined that about 70% of his undertakings were relatively successful while around 20% others ended in apparent failure. This case may be contrasted with that of the other entrepreneur-respondent, a 48-year old retail trader from Dubai, who told the researcher that he had preferred to avoid “risky deals” in his 12-year long business career, while still admitting to the fact that “approximately a third” of his deals did not bring about the expected profits . Thus, this success-to-failure rate may indicate that the risk-taking entrepreneurs can be rewarded for their ‘risky’ conduct of business operations more than the ‘cautious’ ones for their risk-averse behavior.
The entrepreneur’s capacity to reach out to one’s business partners was highly regarded by many respondents. For instance, a car repairs firm owner claimed that he had always “got along with” his business partners, including those of non-Arab ethnicity; in his words, “I have never put too much emphasis on the man’s (sic) language or skin.” Similarly, a software engineering firm owner admitted to have contacts with the large number of business partners, including those from Egypt, Jordan, Pakistan, and even India and Great Britain, with whom he had the long-lasting and mutually profitable business relations. In his words, “the success depends on the ability to listen to your partners.”
On the other hand, those entrepreneurs, who indicated that they had experienced substantial business losses in the past, often noted that they might attribute the chief cause of their current failures to a lack of attention to business partners’ requests and concerns. Thus, a 52-year old plumber from Dubai said that, in his more than 20 years of business activities, he had often observed that his own and colleagues’ failure for a new lucrative contract, etc. was heavily predicated upon the earlier history of their lack of attention to business partners’ previous requirements or requests. Hence, he concluded that a distinct association between this type of business mistakes and the subsequent failures could take place.
Context of Entrepreneurial Success/Failure in the UAE
Strauss and Corbin (1998, p. 132) define the contextual conditions as those “that intersect dimensionally at this time and place to create the set of circumstances or problems, to which persons respond through actions/interactions.” Therefore, within the framework of this study, the contextual markers or conditions are those that have been perceived by the participants to have a direct impact upon their chances to achieve business success or fall a prey of abject failure.
Two sets of the appropriate contextual markers were identified in the course of research, including (a) the intensity of competition in the chosen market, and (b) the relative degree of access to information and investments possessed by each market participant. Thus, market segments, which are characterized by a lower degree of internal competition, may be found to offer higher chances of business success to involved entrepreneurs while similar chances in the sectors with higher and sharper competition rates would appear to be rather negligible. This argument may be supported by the corresponding claims from the study’s participants. For instance, a 55-year old foodstuff trader remarks that “the chances for greater profits are now lower than it was 15 years ago,” when he started his business. When asked what reasons he might ascribe to this situation, he opined that “it has much to do with the big food companies’ influx, with the American-style fast-foods’ proliferation (sic).” The trader complained that his profits had significantly decreased over the past 7 years, voicing a pessimistic forecast that “the things are likely to get worse with time.”
On the other hand, a 28-year old female pharmacy owner from Dubai was characteristically optimistic about the prospects of her business. She felt that her competitive advantage was enough to gain the ground on that market, adding that “the Big Pharma (sic) companies from the U.S. are not so dominant here as to despair about the future of small-scale pharmacy.” This difference in opinions among entrepreneurs representing diverse business segments may be attributed to the relatively sharper competition in the foodstuffs market at the moment, with its higher level of monopolization by such companies as the Foodco Company (Alacra Store, 2012).
Another important contextual marker associated with business success/failure chances was that of differentiation with respect to information/investment access. The entrepreneurs, who said that their information access was greater than that of their competitors simultaneously, claimed that they were able to out-compete them in the same market. For instance, the construction contractor observed that “when [he] became informed of the new contracts, [he] was able to move faster before of [his] competitors to take it.” The same observations may be often found in the other participants’ transcript interviews, attesting to the frequency of such experience among the interviewees. Therefore, one may conclude that this condition plays an important role in their perception of success.
Intervening Conditions of the Entrepreneurial Strategies
The classical definition of intervening conditions was provided by Strauss and Corbin (1998). In their opinion, this category of conditions may encompass the factors “that mitigate or otherwise alter the impact of causal conditions on [the research] phenomena” (Strauss & Corbin, 1998, p. 131). Accordingly, this study, among other things, purported to locate the intervening conditions that, according to the participants’ subjective perceptions, may contribute to or hinder business success in the UAE business environment.
Proceeding from the in-depth interviews conducted with the participants, the researcher felt able to distinguish four main intervening conditions that would exert an impact on the UAE businesspersons’ success/failure chances. These are (a) the petroleum economy’s factor, (b) the financial assistance to innovative SMEs provided by governmental bodies, (c) the seasonal supply/demand changes, and (d) the entrepreneur’s personal persuasiveness. Each of these conditions would necessitate a separate discussion at this point.
High attractiveness of investors from the UAE can be largely attributed to the region’s status as a major hub of oil and petroleum products’ production, processing, and refinement. Hence, the perspectives of the nation’s entrepreneurs on the impact of this factor upon their business success should be especially valuable at this juncture.
Several different opinions were expressed by the participants with regard to this issue. A 39-year old taxi company owner from Dubai claimed that “cheap prices on petroleum enable our business to grow and thrive” in spite of the adverse economic conditions. He observed that investments in Dubai’s car industry had determined the emirate’s status as one of the largest oil producer in the world, leading to general business environment’s amelioration. On the other hand, the pharmacy owner, who was mentioned in the previous section, did not see any tangible correlation between the oil sector’s prominence and her business’s success. She said that it was “medical innovations, not crude oil’s impact (sic)” that brought success to her and similar companies. Finally, a 55-year old foodstuff trader believed that the petroleum companies ‘clearly laid the foundations for these Emirates’ riches,” but he was generally unsure about the relative significance of oil profits for the modern business development. Thus, to a certain extent, the participants’ opinions on the subject matter may be divided in accordance with these three properties: significant (crucial) impact, zero impact, and partial impact.
On the other hand, financial support and assistance provided by the UAE local authorities and Emirate governments to SME entrepreneurs was clearly singled out as one of the most important conditions of business success. For instance, the software engineering firm owner, whose responses have already been cited in the previous sections, made an explicit claim that “but for the financial assistance of the Emir’s government, 50% of our industry’s businesses will be outpaced” by the Indian, Jordanian, or Saudi competitors. While such bold and open assertions were generally rare in the interviews of other entrepreneurs, many of them still expressed their gratitude for the authorities for providing support and assistance to SMEs. Their position on this issue may be exemplified by the quote from a 50-year old construction company owner from Dubai: “It was the effort of the Emir’s Majesty (sic) that made this city a hub for our industry.”
As for the other intervening conditions leading to business success or financial failures, the problem of seasonal vacillations of supply and demand were often raised by the entrepreneurs specializing in the consumer-oriented industry and construction. For instance, a building contractor observed that “it is often difficult to get a decent contract in winter as some construction facilities may be temporarily halted”. Further, a foodstuffs trader claimed that “the draught may lead to price hikes while the abundant harvests can result in general deflation,” naturally bringing changes in the business’s fortunes. Hence, the seasonal factor should be taken into account, as well.
Finally, the entrepreneur’s capacity to persuade his/her customers and business partners in the validity of the proposed business projects often figured among the personal qualities associated with successful business making. For instance, a 38-year old copywriters’ company owner from Dubai observed that “the ability to make business goes hand in hand with personal persuasiveness.” Such keywords as “persuasive”, “forceful”, “well founded”, or “luculent” were frequently used in the participants’ interviews when referring to the qualities of the entrepreneur could be best conducive to the company’s growth and development. In contrast, such terms as “awkward”, “unconvincing”, or “poorly justified” referred to the actions of those entrepreneurs, who were apparently unable to reach out to their customers or contacts. Thus, a tangible dichotomy between the characteristics considered to be correlated with success and those associated with failure may be seen in this paper.
Within the framework of the grounded theory based research, comparative strategies of the interactants may be considered as one of the important aspects of the research process. That is why it was necessary to discover and compare some of the success strategies employed by the research participants in their business activities.
Two main business success strategies may be discerned from the interviews with the research participants: (a) consolidation and (b) expansion. Proponents of the former justify it by the prolonged existence of their companies while the latter’s partisans point to the potential for a rapid profit taking, as well as to the capacity to increase one’s company’s market share. As both arguments were based on the participants’ entrepreneurial experience, one should review both of them in order to draw appropriate conclusions.
The main argument advanced by the followers of the consolidation strategy is that it enables “longevity”, “guarantees from business calamities”, and allows for “more stable” profit making. For instance, a 55-year old shipping services firm owner from Abu Dhabi remarked that “while swift money (sic) may tempt, they will hardly to come forever,” hinting at the perceived instability of the expansionist business strategies. He justified this approach noting that “I am in this business for over 17 years, and I have seen at least eight competitors going down as rapidly as they used to go up (sic).” Hence, the ‘argument from stability’, as it may be termed, strives to underwrite the consolidationist strategy by pointing out its long-term benefits.
In contrast, proponents of the business expansionism proceed from the notions that “our world is a place of harsh competition,” and that one “has to act quickly unless his (sic) competitor does the same first.” According to a 28-year old pharmacist, “the requirements of our times dictate certain ruthlessness in striving for competitive advantage.” Similarly, a 37-year old translators’ firm owner from Dubai observed that “the current business climate makes it clear: you may either grow or fail.” Such openly stated dichotomy between the polarities of success and failure visibly separates older entrepreneurs from younger businessmen as the results of the participants’ interviews show.
Consequences of the Entrepreneurial Strategies
The interviews demonstrate that the perceived outcomes of both types of business strategies were fairly similar with regard to the participants’ experience. While older entrepreneurs were validated by their businesses’ stability as the result of the consolidationist strategy, their younger peers appeared to be similarly rewarded by their more aggressive business behavior. This pattern was felt by the participants themselves as the younger software engineering firm owner said that “the older generation is more comfortable with their business style as we do with that of ours.” This demonstrates that both strategies may work for different groups of the UAE entrepreneurs.
Entrepreneurial Success Indicators and the Perceived Characteristics of Perfect Entrepreneur
Proceeding from the guidelines presented by Onwuegbuzie and Teddlie (2003), quantification of the qualitative data obtained in the course of the interview was carried out by the researcher with a view to detecting the cumulative intensity effect size of the interviews’ content. Such quantification analysis would allow the researcher to draw some conclusions on the comparative relevance of various codes and themes for the study at large.
In total, 127 descriptor codes were delineated in the course of this stage of the research, which were subsequently reduced to 9 main categories. Afterwards, the intensity sizes for these categories were properly calculated in order to compare their relative frequency. Thus, it would be possible to come to the conclusion on the relative significance of these generic themes for the participants.
In general, the cumulative intensity effect size analysis has led to the results emphasizing the role of such categories as ‘confidence’ (26.4%, 29 descriptor codes), ‘awareness’ (18.7%, 31 descriptor codes), and ‘persuasiveness’ (15.9%, 22 descriptor codes), which may be deemed to be determinants of the perception of ‘perfect’ entrepreneur by the participants. 6 other categories account for less than 39% of the descriptor codes’ totally, which may be taken as evidence of the increasingly dimensionalized nature of the participants’ subjective perceptions. With 3 dominant categories, the majority of descriptor codes referred to the significant aspects pertaining to each of them. For instance, the ‘awareness’ category may be divided into ‘scrupulousness’, ‘stable information access’, and ‘shrewdness’ properties, which encompass the number of relevant codes (10, 9, and 12, respectively) in its turn. However, in general, all these properties cannot be considered as fully independent from their ‘mother’ categories, confirming the notion of their interconnected and systemic nature.
The results of the quantitative phase of this study appear to be in complete agreement with those of its preceding, qualitative stage. On the whole, the characteristics of an outstanding entrepreneur presented in the quantitative analysis of the participants’ interviews are similar in many ways to the ones associated with confidence and access to information in the qualitative analysis of the participants’ responses. Thus, a preliminary conclusion on this issue would seem to conform to the aforementioned notions.
The results of both qualitative and quantitative stages of the study’s findings’ analysis indicate that the participants would generally ascribe their business success and failure to the number of factors, ranging from the personal abilities and characteristics to the institutional and infrastructural concerns. Proceeding from these findings, one may delineate several limitations and future research directions that may be conceptualized on the basis of the current research.
First of all, the problem of subjective bias must necessarily present itself. While the opinions of the participants essentially reflect their subjective psychological realities, one should still point out that the responses under consideration seem to reflect the certain identifiable patterns as successful quantification of the shown latter may be subjected to external empirical validation if the larger, statistically valid sample will be obtained. Thus, the main task of future researchers of this subject is to furnish the statistically grounded test studies of the outcomes associated with this research.
Secondly, the idea of entrepreneurial ‘success’ or ‘failure’ is based on the socially significant concepts that cannot exist outside of a broader social consciousness. Hence, the reflection of these concepts in the individual consciousnesses of the research participants would allow the researcher to draw more significant conclusions with regard to the conceptualization of these phenomena at the larger societal level. The significance of this research lies precisely in this circumstance.
Finally, the identification of tangible patterns beyond the description of entrepreneurial ‘success’ and ‘failure’ may be reflected in the subsequent explanations of social practices associated with the concept of entrepreneurship in general, as well as its specific applications to the circumstances in the UAE. Hence, new considerations of the same research problems may receive significant benefits from this study.
Conclusion and Recommendations
The findings of this study may draw the researcher’s community to comprehend the need for further study of the socio-psychological aspects of entrepreneurship and entrepreneurial behavior with a view to these phenomena in the central place in the contemporary understanding of economic actors’ actions. At the same time, this research would have more practical and specific consequences, as well, which may be generally attributed to the need of a more in-depth conceptualization of the connection between specific personality traits and the chances of entrepreneurial success. Therefore, several practical recommendations may be drawn from this study, as well.
Firstly, development of the business environment conducive to entrepreneurship may be deemed to be an exceedingly positive factor of the UAE business community development. It seems that governmental assistance programs are considered by the country’s entrepreneurs to be the additional opportunities for making revenues and boosting their business efficiency.
Secondly, the entrepreneurial personality traits, e.g. sense of business environment’s changes or general awareness, appear to be correlated with higher chances of business success as opposed to failure. Thus, the cultivation of these personality traits may be the positive factor influencing the development of Emirati SMEs-driven economic growth.
Finally, the behavioral aspects of entrepreneurial activities may be valid only within the context set by the conditions favorable to their expression. That is why the development of suitable institutional infrastructure for business activities appears to be the necessary prerequisite for its growth and thriving.