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Assessing entrepreneurship of Pakistani community and the factors

of success

By

Nadir I. Alvi

A dissertation submitted in partial fulfillment of the requirements for the degree of
Masters in Business Administration

University of Hertfordshire

2008

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Abstract
Ethnic minority entrepreneurs are contributing significantly in the economic

development in the UK. The studies (Barrett et al., 2001; Bank of England, 1999;

Waldinger et al., 1990) have shown that the ratio of ethnic minorities is comparatively

higher than the other start-up entrepreneurs in the UK. However, migrant entrepreneurs

have been neglected by economic researchers (Williams et al., 2004). Keeble (1989).

Among these entrepreneurs, Pakistani communities are also very active in the

entrepreneurship activities especially in cloth trade as Pakistan produces about 10

percent of the world cotton crop making it the fourth largest producer in the world. The

textile industry currently accounts for almost 65% of Pakistan's exports, 20% of value-

added production and employs 40% of manufacturing labor (Khan & Ghani, 2004).

However, these entrepreneurs face many obstacles and barriers in the UK due to

cultural and economical differences. The researcher aimed to analyze and explore

these barriers and obstacles especially focusing on the marketing strategies of the

Pakistani entrepreneurs doing cloth trading in the UK. For this purpose, the researcher

utilized qualitative research method in order to collect primary data through

questionnaire based surveys among 50 Pakistani entrepreneurs and the follow up

interviews with 5 of the participants to record their views about obstacles and their

marketing strategies to overcome these obstacles. The result of the primary research

coupled with the review of the literature has shown that ethnic minorities in the UK face

racial discrimination to some extent, lack of good knowledge of language hinder their

effective communication with the customers and the lack of funds through bank loans

negatively impact their performance.
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Table of Contents

1.1Introduction ...............................................................................................................6

1.2Problem Statement....................................................................................................9

1.3Research Questions................................................................................................10

1.4Objectives of the Study...........................................................................................11

1.5 Structure of the Study.............................................................................................11

1.6 Definition of Key terms...........................................................................................12

Chapter II: Review of the Literature.............................................................................13

2.1 Introduction.............................................................................................................13

2.2 Theoretical framework............................................................................................18

2.3 Market Opportunities and Heterogeneity...............................................................25

Planning in Small Businesses......................................................................................30

3.2 Research Framework ............................................................................................32

3.3 Sampling ................................................................................................................33

3.4 Data Collection tool................................................................................................33

3.5 Collection and utilization of the Secondary data....................................................34

3.8 Validity....................................................................................................................35

3.9 Reliability ...............................................................................................................36

3.10 Summary of the chapter ......................................................................................37

Chapter IV: Results.....................................................................................................38

4.1Introduction...............................................................................................................38

.....................................................................................................................................38

4.2Demographics.........................................................................................................38

4.3Resources acquisition.............................................................................................39

4.4Entrepreneurship experience..................................................................................40
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4.5Obstacles and barriers in UK..................................................................................42

4.4 Follow up Interviews...............................................................................................43

Dealing with Obstacles.................................................................................................45

The Essential Marketing Principles..............................................................................46

Experiencing Success..................................................................................................48

Advice for Entrepreneurs..............................................................................................50

Chapter V: Discussion and Conclusion .....................................................................51

5.1Introduction..............................................................................................................51

6.2 Limitations encountered.........................................................................................53

6.3 Implications for management.................................................................................53

List of Tables

Table 1: International experience and cost reduction.....................................................40

Table 2: Advantage over domestic competitors..............................................................41

Table 3: Planning for the future growth..........................................................................41

Table 4: bold, independent posture to exploit new opportunities....................................42

Table 5: Participants of the primary data collection........................................................44

List of Figures

Figure 1: Marketing Organization Fit With Strategic Type and its Relationship with
Marketing Performance...................................................................................................20

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Figure 2: Business Strategy Debate................................................................................23

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Chapter I: Introduction

1.1Introduction

The purpose and intention of the researcher in this dissertation is to provide insight

into the nature of Pakistani entrepreneurship activities in clothing and the specific

barriers and difficulties they face being ethnic minority group in the United Kingdom. As

the researcher have been in the fielded since a past few years, it was my profound

desire to contribute my knowledge and experience in the field in order to improve

performance of Pakistani entrepreneurs in the UK.

Ethnic minority entrepreneurship in the UK has attracted considerable attention by

man researchers (Barrett et al., 2001; Ram and Jones, 1998; Waldinger et al., 1990).

The findings of these researchers suggest that ethnic minorities are over-represented

among start-up entrepreneurs in the UK (Bank of England, 1999) and the US (Kim et

al., 2003). However, migrant entrepreneurs have been neglected by economic

researchers (Williams et al., 2004). Keeble (1989) found that 70% of Cambridge (UK)

area high technology entrepreneurs were not from the local area, and Keeble and Tyler

(1995, p. 984) in a large scale cross-England study found that ‘‘most rural new-firm

founders are migrants from elsewhere’’.

Human migration is a significant economic issue for governments, particularly in

Europe, given the aging demographics of some European countries. Indeed, Florida

(2002) argues that the location decisions of creative people drive economic

development in the knowledge-based economy. Florida’s work focuses on cities.

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However, the issue of regional and rural regeneration is also important and highly

sensitive in many countries. Policy decisions need to give due consideration to the

entrepreneurs from ethnic minorities who face specific challenges and difficulties for

establishing themselves in a new cultural and economic setup. Similarly, the policy

makers also need data on the activities of these entrepreneurs for better understanding

their unique requirements and removing barriers they face in the UK.

The UK economy largely depends on small business. The Secretary of State for

Trade and Industry recognised that ethnic minority communities are worth £32 billion a

year (Ethnic Minority Business Forum 2003). Ethnic Minority Entrepreneurship,

Smallbone, D) report shows London is the most ethnically diverse city in the UK and

one of the most ethnically diverse cities in the world. Throughout the UK more than a

quarter of a million ethnic minority enterprises are contributing around £13 billion a year

to the British economy (Ethnic Minority Business Forum ‘EMBF’ Annual Survey of Small

Business 2006). Recent research into the London economy has shown that there are

66,000 ethnic minority owned businesses in the capital, as well as around 93,000 self

employed people from ethnic minority communities, and that the ethnic minority

business sector employs half a million people, with a combined sales turnover of over

£90 billion(London Economy Research 2007). These results clearly indicate how much

ethnic minority businesses are important for British economy.

An increasing number of ethnic minority entrepreneurs are running successful

multi million pound companies in many different sectors, for example in financial

services, business services, media, fashion and in computer manufacturing, to name

just a few. (London’s Ethnic Minority-owned business, London Development Agency,

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Jan 2008). Among these entrepreneurs, Pakistani community has especially focused on

the cloth trade as Pakistan produces about 10 percent of the world cotton crop making it

the fourth largest producer in the world. The textile industry in Pakistan currently

accounts for almost 65% of its exports, 20% of value-added production and employs

40% of manufacturing labor. The textile industry of Pakistani has concentrated in the

provinces of Sindh and Punjab, with Karachi and Faisalabad being the hubs of textile

activity in these provinces respectively. In the past ten years, growth in the number of

small firms entering the Faisalabad textile industry has been dramatic, particularly in

weaving. In this sector, small firms typically own 1 to 20 shuttle-less looms, medium

firms up to 50, and large firms over 50 (Khan & Ghani, 2004) .

Being a part of the clothing industry for the past three years I have come to know

the problems or barriers for the development of minority businesses especially the

Pakistani clothing trade in London. The motivation for this topic derives from a practical

challenge that provides the enthusiasm for the thesis and the research to proceed to the

stage of problem definition. This research topic actually relates to “Ethnic Business

Growth Barriers”. My study is to conduct research to help in identifying the current

features of Pakistani minority clothing businesses in London UK and to understand the

barriers and problems they are facing for the growth of their businesses. The primary

aim of helping to strengthen their evidence base in terms of better understanding the

diverse needs of “Pakistani Minority Businesses”.

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I decided to conduct research, provide help by pointing out the issues also giving

suitable suggestion or recommendation to resolve these issues so that industry could

grow according to its potential.

One of the key barriers for Pakistani minority businesses and entrepreneurs

continues to be access to finance. There are signs that the financial needs of the

Muslim community have been recognized by the private sector. An Islamic Bank

(Islamic Bank of Britain) has been created and at least one international bank is now

advertising Sharia compliant financial products. This is an excellent start, but we must

Continue to investigate access to finance issues and how they affect small businesses

across ethnic minority business communities (Small Business Service Report 2007).

1.2 Problem Statement

The United Kingdom hosts a very diverse population coming from all over the world.

Among this diverse population, Asian migrants have contributed significantly in the

small business activities; especially Pakistani migrants have utilized their experience in

textile industry and have introduced a large variety of clothing. However, this population

has witnessed specific barriers in their effort to establish their entrepreneurship in the

UK due to their unawareness of the economic culture and practices of the native setup

(Bell, 2004). A variety of evidence clearly shows that economic and social issues such

as unemployment and social exclusion, poor health and housing and poverty in general

disproportionately affect ethnic minority communities to participate in the economic

activities. Thus, there is evidence of certain challenges and barriers which need to be

explored and addressed in order to maximize the business activities in the UK. It is

necessary, therefore, that those in control of the resources for development target these
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communities for appropriate support for regeneration and neighborhood renewal

initiatives, including social enterprise, to be effective in promoting social inclusion and

reducing deprivation and poverty in our midst.

It is vitally important that the policy makers and the interested groups responsible to

promote entrepreneurship have a resource of reliable information about the

environment in which ethnic minority entrepreneurship operate and realize the barriers

that these groups encounter, to enable them provide appropriate support for expanding

their business opportunities in the UK. Hence, it is my intention through this research

study to make a small contribution towards availing such reliable source of information

about challenges to Pakistani entrepreneurs in London.

1.3 Research Questions

For this research study, the researcher has endeavored to answer some of the very

important and fundamental questions:

1. What are the major barriers in establishing Pakistani clothing business in

London?

2. How these barriers can be reduced?

3. What are the characteristics of Pakistani minority in terms of their business skills

needs?

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1.4 Objectives of the Study

The most important objective of this research project is to deal with the problems of

Pakistani minority in business development. For this purpose, the researcher focused

the attention on two major growth barriers for business: Management and marketing.

Thus, the primary concern was to find out the main factors affecting the business

development in London UK. In this paper, I put forward to analyze the opportunities and

threats for Pakistani minority businesses in context of local and regional policies and

programs. Considering this primary aim of the research, the specific objectives were:

1. To analyze barriers facing the Pakistani minority in business development in

London.

2. To investigate how Pakistani minority business growth risk can be analyzed

3. To enhance the ability of ‘Management and marketing’ in the Pakistani Minority

4. Try to examine the characteristics of the Pakistani Minority in terms of their

business needs.

1.5 Structure of the Study

In order to investigate the barriers to Pakistani entrepreneurship in UK, this study will

review the current literature on ethnic minority entrepreneurship in broader sense to

cover all its aspects which are vitally important for the entrepreneurship development in

order to offer recommendation how the ethnic minorities can develop their the business

from their own limited resources. For this purpose, in the literature review chapter,

different theories relating to entrepreneurship especially focusing on the ethnic

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minorities in the UK and the potential barriers that are faced in the course of its

development will be reviewed. Further, this study will explore the textile industry

opportunities to expand the business in the international market also highlighting the

entrepreneurship trends in the world. The methodology chapter will present philosophy

and methods of research undertaken for this study. It will also describe the sampling,

data collection tools and the method for data analysis. The fourth chapter will present

the results of the research in relation with demographic analysis of the respondents and

their perception of barriers to entrepreneurship in UK. Also the chapter offers

conclusions resulting from the data analysis. This researcher will offer recommendation

to the industry with due consideration to the results of the primary data and the review

of the literature.

1.6 Definition of Key terms
Based on the literature review in Chapter II, the following terms relevant to the study are

operationally defined below:

1. Entrepreneurs are defined as leaders who “create and manage innovative

entrepreneurial organizations or ventures whose primary mission is the social

change and development of their client group” (Prabhu, 1999, p. 140).

Entrepreneur is a person who likes taking risks, ever ready to look for and to

manage disorganized situation and to accept risks as well as able to avoid risks.

Entrepreneur assumed risks are related with disorganized situations and are not

insurable (Mitton, 1989, p. 10).

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2. Obstacles. In this study, obstacles referred to “the barriers (both internal to the

individual, i.e., defeating thoughts; negative self image and external to the

individual, i.e., negative perceptions, lack of role models) having a negative

impact on entrepreneurial success” (Gravely, 1999, p. 5).

3. Organizational climate is described as configurations of attitudes and perceptions

by organizations members that, in combination, reflect a substantial part of the

context of which they are a part and within which they work. Climate perceptions

describe an individual’s organizational experience rather than characterizing his/

her affective or evaluative reaction to the experience.

4. Success. In this study, success referred to “a combination of longevity of the

business, ongoing achievement of business goals (i.e., growth, economic impact,

social impact), and profitability” (Gravely, 1999, p. 5).

Chapter II: Review of the Literature
2.1 Introduction

For literature review, the scope includes a review of academic and popular

literature on e-learning. Literature review provides a meaningful background on

corporate e-learning and is what has led to the need for this study. It uncovers what has

already been researched, identifies those experts who have studied it and indicates the

importance of follow up. Academic or scholarly literature is based on empirical studies.

These are based on controlled experiments, surveys or interview. Popular literature

represents the thoughtful reflection of e-learning experts or advocates.

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The purpose of the literature review was to position this research in the context of

the current relevant literature (Creswell, 1994). From the current base of knowledge, the

literature review was not a compilation of facts and feelings, but a coherent argument

that lead to the description of a proposed study (Rudestam & Newton, 1992). This

review was done with special regard for the prior scholars who established and then

contributed to the growth of entrepreneurial studies.

Gravely stated

This review is done with respect for the prior scholars who founded and then
advanced the field of entrepreneurial studies. The review reveals the gaps in
knowledge and the rationale for current research. Although the review is at times
critical, it should not be misunderstood as an assertion that previous stud In
entrepreneurship has not provided scholarly enlightenment. (1999, p. 9)

Before the 1990s international business and entrepreneurship were two different areas

of study that seldom intersected (McDougall & Oviatt, 2000). While international

business researchers focus their studies on international activities of large multinational

corporations, academics in entrepreneurship concentrate their works on creation and

management of small and medium-sized enterprises. The globalization of the world

economy has changed all that and the emergence of the “born global” phenomenon

has made international entrepreneurship, an intersection of international business and

entrepreneurship, a new interesting and significant research topic (McDougall & Oviatt,

2000).

International entrepreneurship was first introduced in 1988 by Morrow as a new growth

opportunity for both new ventures and established firms (Zahra & George, 2002).

McDougall’s study of the “born global” firms was the first empirical work to support the
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term “international entrepreneurship” as it showed significant differences between

international new ventures and domestic new ventures in terms of their strategy and

industry structure (McDougall, 1989). McDougall, who is a true pioneer in this field,

focused on “the development of international new ventures or start-ups that, from

inception, engage in international business, thus viewing their operating domain as

international from the initial stages of firm’s operation” (McDougall, 1989: 388).

The definition of international entrepreneurship has evolved over the past decade and

academics have tried to incorporate international business, entrepreneurship, and even

strategic management perspectives into their definitions of international

entrepreneurship. Wright and Ricks view international entrepreneurship as a firm-level

activity that crosses national borders and focuses on the relation between business and

the international environments in which they operate (Wright & Ricks, 1994). Zahra and

George offer “the process of creatively discovering and exploiting opportunities that lie

outside the firm’s domestic markets in the pursuit of competitive advantage” as their

definition (Zahra & George, 2002: 261). Oviatt and McDougall have recently defined

international entrepreneurship as “the discovery, enactment, evaluation, and

exploitation of opportunities, across national borders, to create future goods and

services” (Oviatt & McDougall, 2005: 540). Since there is still no agreement on a single

definition of international entrepreneurship, nevertheless, research that utilizes the

“international entrepreneurship” terminology necessitates an articulation of a definitive

domain of study.

Early research on international entrepreneurship mainly focused on international new

ventures or “born global” firms. Zahra, however, suggests that the study of international
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entrepreneurship should include both new and established firms since entrepreneurial

activities are an ongoing process that unfolds over time (Zahra, 1993). This opinion was

agreed to by the task force on international issues within the Entrepreneurship Division

of the Academy of Management formed in the early 1990s which suggested that the

domain of international entrepreneurship be broad (Giamartino, McDougall, & Bird,

1993). An inclusion of “corporate entrepreneurship” as one major area of interest within

international entrepreneurship confirms the need to encompass established companies

in the study of international entrepreneurship. The definitions of international

entrepreneurship by Miller (1983) and Wright and Ricks (1994) suggest that

international entrepreneurship is an organizational-level phenomenon, however, Oviatt

and McDougall (2005) emphasize that actors who discover, enact, evaluate, or exploit

opportunities, across national borders, to create future goods and services can be either

organizations, groups, or individuals. Oviatt and McDougall also summarize the

previous works in international entrepreneurship into two major areas of study, one

focusing on the cross-national border behavior of entrepreneurial actors, and the other

focusing on the cross-national-border comparisons of entrepreneurs, their behavior, and

the circumstances in which they are embedded (Oviatt & McDougall, 2005).

In the past decade entrepreneurship scholars have completed numerous significant

studies of international activities by new venture firms (Oviatt & McDougall, 1995, 1997;

Bloodgood, et al., 1996; McDougall & Oviatt, 1996; etc.). McDougall and Oviatt (2000)

make the point that “Businesses in an increasing number of countries are seeking

international competitive advantage through entrepreneurial innovation (Simon, 1996).”

And the Academy of Management Journal (AMJ) recognized the increasing importance

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of international entrepreneurship research by publishing a “Special Research Forum on

International Entrepreneurship” in its October 2000 issue. The leader in convincing the

AMJ editor to engage this Special Issue was Professor McDougall. Zahra, Ireland, and

Hitt et al. (1998) recount many of the measures of international entrepreneurship activity

that have been addressed: e.g., antecedents to international activity, processes for

moving into international markets, performance effects of new venture international

operations, the impact of regulations, industrial and organizational factors that enable or

constrain new venture international focus, and many other variables. In general,

international entrepreneurship is examined by the amount of international activities of

the entrepreneurial firm’s operation. Most researchers have studied these activities

utilizing three different dimensions, namely the extent, speed, and scope of

internationalization.

The extent or degree of internationalization is usually measured by the percent of sales

generated from foreign markets. However, some researchers prefer to use more than

one factor to measure this variable. Sullivan uses foreign sales as a percentage of total

sales, foreign assets as a percentage of total assets, and overseas subsidiaries as a

percentage of total subsidiaries to measure the degree of internationalization (Sullivan,

1994). Reuber and Fischer (1997) measure the degree of internationalization of

Canadian software firms using the percentage of foreign sales, and the percentage of

the employees that spend more than 50 percent of their time on international activities.

The speed and scope of internationalization has attracted less research attention than

the extent/ degree dimension. Speed of internationalization is defined as the length of

time from the inception of the firm to the time the firm generates foreign sales. Reuber
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and Fischer look at the number of years the firm operated domestically before having

any foreign sales as a “delay” and treat it as an international behavior of the firm

(Reuber & Fischer, 1997). In another study of the globalization patterns of emerging

high-technology companies in the U.S., Roberts and Senturia also consider the timing

of initiation of global activities as one of their variables (Roberts & Senturia, 1996).

The scope of internationalization is measured by the number of foreign markets within

which the firm operates. These foreign markets are sometimes represented by the

countries and sometimes by regions. Zahra, Ireland, and Hitt call this dimension of

internationalization an “international diversity” and measure this variable by the number

of foreign countries to which the companies sell their products (Zahra et al., 2000). In

contrast, Reuber and Fischer look at the geographic scope of sales from a regional

viewpoint, e.g., North America, and outside North America (Reuber & Fischer, 1997).

2.2 Theoretical framework

Most businesses find it easier to formulate strategies that outline how they intend

to achieve their goals than how to implement them (Noble and Mokwa, 1999; Walker &

Ruekert, 1987). Theory posits organizing marketing activities in ways that fit the

implementation requirements of a business’s strategy which enhances performance.

The marketing theory posits that to enable strategy implementation and achieve

superior performance, managers should organize marketing activities in different ways

depending on their business strategy (Slater & Olson, 2000; Walker & Ruekert, 1987).

Marketing activities are organized in ways that enable business strategy

implementation with two different marketing performance outcomes. Within this

important domain, research makes good contributions. A major knowledge gap is to be
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filled by providing empirical support for theorized links among the organization of

marketing activity, business strategy, and marketing performance. This helps managers

understand how to organize marketing activities to meet the implementation

requirements of different business strategies and why this is important in driving

performance.

Assessing whether a business’s marketing activities are organized in ways that

enable the implementation of its strategy and the impact this has on performance

requires the simultaneous consideration of multiple characteristics of the business

(Doty, Glick, & Huber, 1993). In addressing similar research questions, scholars in

organization theory and strategic management have used configuration theory-based

approaches (Miller, 1997; Veliyath & Srivanstava, 1995). Configuration theory posits

that for each set of strategic characteristics, there exists an ideal set of organizational

characteristics that yields superior performance (Van de Ven & Drazin, 1985).

Figure 1 combined insights from the configuration theory and the marketing

literature to develop a conceptual model that linked to the degree to which marketing

activities are organized in ways that enable the business strategy implementation with

marketing performance.

Marketing scholars have used many different terms—including “match,”

“alignment,” “congruence,” “complementary,” and “consistency” to denote holistic

relationships between multidimensional phenomena such as marketing organization

and business strategy. Although each of these terms can connote different meanings

and technical specifications, they are often used interchangeably.

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From this perspective, the marketing organization fits with the business strategy

defined as the degree to which a business’s marketing organization profile differs from

an ideal marketing organization that achieves superior performance by arranging

marketing activities in a way that enables the implementation of a given business

strategy.

Marketing Organization
Characteristics

*Structural characteristics

*Task characteristics Marketing Organization Performance
Fit with Strategic Type Effectiveness
Deviation from profile of Marketing
an ideal marketing Effectiveness
organization that
produces superior Marketing Efficiency
Strategic Type performance in ways that
enable strategy
*Prospector implementation
*Analyzer

*Defender

Figure 1: Marketing Organization Fit With Strategic Type and its Relationship with Marketing
Performance

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In the marketing domain, existing theory indicates some marketing organization

characteristics that may be appropriate for firms pursuing certain types of strategy

(Ruekert & Walker, 1987). In the context of marketing organizations fit with the business

strategy, this approach requires the identification of high-performing businesses

implementing a given strategy and a calibration of their marketing organization

characteristics as an ideal profile for implementing that strategy (Drazin & Van de Ven,

1985; Venkatraman & Prescott, 1990).

Figure 1’s configuration theory and the marketing literature suggested two major

constructs (Vorhies & Morgan, 2003) that are relevant to understanding and assessing

the marketing organization’s fit with the business strategy: business’s strategic type and

marketing’s organizational characteristics. Strategic type pertains to the planned

patterns organizational adaptation to the market through which a business seeks to

achieve its strategic goals (Conant, Mokwa, & Varadarajan, 1990).

Marketing’s organizational characteristics are the many important structural and

task characteristics that together constitute the way marketing activities are organized

within the business (Workman, Homburg, & Gruner, 1998). The structural

characteristics of the marketing organization pertain to how marketing activities and

related decision-making authority are arranged (Doty et al., 1993; Ruekert & Roering,

1985). The task characteristics of the marketing organization pertain to the nature of the

marketing activities undertaken and the ways they are performed (Ostroff & Schmitt,

1993).

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Task characteristics indicate the ability of the marketing organization to perform

necessary marketing activities and the degree to which team-based workflows are

needed to accomplish them.

The marketing theory suggests that organizing marketing activities in ways that fit

the business’s strategic type is an important driver of marketing performance outcomes

(Walker & Ruekert, 1987). A resource-based view theory indicates the fit between

marketing organization characteristics and the strategic type may also exhibit the

inimitability and non-substitutability characteristics identified as essential for sustaining

competitive advantage.

The marketing performance may be a different business. For example,

organization theory posits that effectiveness, regarding the degree to which desired

organizational goals are achieved, and efficiency, regarding the ratio of organizational

resource inputs consumed to the goals achieved, are two important and distinct

dimensions of organizational performance (Bonoma & Clark, 1988).

A configuration theory suggests that the ideal marketing organization required to

fit with particular strategic types differs depending on whether the firm seeks to

maximize either effectiveness or efficiency (Tsui, 1990).

Marketing effectiveness pertains to the degree to which desired market-based

goals are achieved (Clark, 2001; Morgan, Clark, & Gooner, 2002). Theory suggests that

for effectiveness-maximizing business of each strategic type, an ideal marketing

organization exists in which the configuration of structural and task characteristics
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enables the implementation of the business’s strategy in a way that leads to superior

marketing effectiveness (Ruekert & Walker, 1987).

Marketing efficiency is the ratio of marketing performance outcomes achieved to

resource inputs consumed (Bonoma & Clark, 1988; Morgan et al., 2002). Theory

suggests that for efficiency-maximizing businesses of each strategic type, there exists

an ideal marketing organization in which the configuration of structural and task

characteristics enables the implementation of the business’s strategy in a way that

leads to superior marketing efficiency (Ruekert & Walker, 1987).

This study indicated that organizing marketing activities in ways that fit the

business’s strategic type was associated with marketing effectiveness in each of the

three strategic types and with marketing efficiency in firms pursuing prospector and

defender strategies. This provided empirical support for the strategic marketing theory

predictions that linked the marketing organization, which fit with the business strategy

and marketing performance (Walker & Ruekert, 1987).
Customer Competitor
Debate in the field of entrepreneurship has sometimes focused
Analysis Analysis on whether or not

the perfect competition model applies in explaining entrepreneurial behavior (Kirzner,

1997). Company Product
Market
Analysis Differentiation
Segmentation

Positioning
(Product/Market Choice)

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Marketing
Manufacturing
Strategy
Strategy
Figure 2: Business Strategy Debate
In the case of entrepreneurship the specialized knowledge is often knowledge

about opportunities created by the environment, a new product or even opportunities for

a potential new product (Alvarez & Busenitz, 2001). Alvarez and Busenitz continued to

expound on the limitation of the process and to utilize the information as research data:

As we uncover the phenomenon surrounding entrepreneurial cognition, it is
becoming clearer why entrepreneurs see new discoveries more readily than their
counterparts. Their heuristic-based logic appears to give them a competitive
advantage in quickly learning about new changes and what the implication of
those changes are for the development of specific discoveries. (2001, p. 760)
Kirzner (1979) developed the term “entrepreneurial alertness” as the ability to

see where products or services do not exist or have unsuspectedly emerged as

valuable. Alertness exists when one individual has an insight into the value of a given

resource when others do not. From this perspective, entrepreneurial alertness refers to

“flashes of superior insight” that enable one to recognize an opportunity when it

presents itself (Kirzner, 1997).

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Alvarez and Busenitz offered a big description of the opportunity. They placed

the entrepreneurs’ story within the context of the whole process:

In the context of environmental change, those with an entrepreneurial cognition
orientation often see new opportunities where others tend to be concerned with
protecting themselves from emerging threats and changes. The cognition ability
of entrepreneurs to frame situations in an opportunistic manner is a
heterogeneous resource that can be used to organize other resources. (2001, p.
759)

2.3 Market Opportunities and Heterogeneity

Entrepreneurs have individual-specific resources that facilitate the recognition of

new opportunities and the assembling of resources for the venture (Alvarez & Busenitz,

2001) by focusing on the resources, from opportunity recognition to the ability to

organize these resources into a firm and then to the creation of heterogeneous outputs

through the firm that are superior to the market.

Resource heterogeneity is the most basic condition of resource-based theory and

it assumes at least some resource bundles and capabilities underlying production are

heterogeneous across firms (Barney, 1991). Resource-based theory suggests that

heterogeneity is necessary but not sufficient for a sustainable advantage. The notion

that entrepreneurs were somehow different from the rest of the population provided the

impetus for substantial research on the subject in the 1960s and 1970s. Most of this

research focused on a host of traits such as risk-taking and the need for achievement,

but unfortunately, the findings were disappointing (Low & MacMillan, 1988).

The research has generally assumed that individuals tend to make decisions

(and the use of heuristics) in a similar fashion and are susceptible to common errors
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(Alvarez & Busenitz, 2001). However, recent research on cognition indicated that

entrepreneurs use heuristics in their decision-making more than their managerial

counterparts in large organizations (Baron, 1998). Consequently, they often made

significant leaps in their thinking leading to innovative ideas that were not always very

linear and factually based. Central to most models of learning is the issue of achieving

new understandings, interpretations and insights. Learning in the context of

entrepreneurship may also have some important links to the use of heuristics in

decision making. Sources of competitive advantage are thought to potentially evolve

around knowledge-creation and decision-making capabilities (Barney, 1991).

This heuristic-based logic enables entrepreneurs to more quickly make sense out

of uncertain and complex situations. Such decision approaches can lead to forward-

looking approaches perceiving new opportunities, faster learning and unorthodox

interpretations.

Resource-based logic identifies the kinds of resources and capabilities that

require specific investment in order for their full economic value to be realized-resources

and capabilities that are socially complex, path dependent, tacit, and so forth (Barney,

1995). These ideas suggest that conditions which require that efficient coordination of

and integration of knowledge are those in which entrepreneurial firms are likely to arise

in an economy (Kirzner, 1997).

The entrepreneur’s ability to convert creative insights and often homogenous

inputs into heterogeneous outputs make the firm a superior choice over the market

(Alvarez & Busenitz, 2001). The classic story is that profit maximization and efficiency

26
require the substitution of firms for markets to the cost of using markets becomes large

relative to the cost of the entrepreneur forming a firm (Coase, 1937).

Alvarez and Busenitz expanded on the importance of learning and knowledge in

the entrepreneurial process:

The learning, however, is a result of buyers and sellers learning to adjust their
behavior over time to conduct their transactions at the optimal level. The
entrepreneurial process in this sense is about information discovery of the market
and the coordination of disparate tacit knowledge. (2001, p. 762)

The emergence of cognitive approaches to understanding how entrepreneurs

think and make strategic decisions is showing much promise (Baron, 1998; Busenitz &

Barney, 1997). If entrepreneurs do indeed have a unique mindset of orientation, then it

follows that their cognitive approaches are likely to have strengths and weaknesses in

various competitive environments and are a potential source of competitive advantage

(Barney, 1991).

Schumpeter (1934) described the entrepreneur as the one who combined

productive factors in some new way, a product, production method or a market. He

further maintained that innovation was driven by the entrepreneur (who is at the heart of

the firm) and not consumer driven (markets).

The focus of most current entrepreneurship research into opportunities has been

on markets (Kirzner, 1997). This is true whether the market is a product market or a

factor market. Once the discussion turns to factor markets (the creation of value through

27
the transformation of inputs into outputs) there becomes a need for the coordination of

numerous types of specialized knowledge.

Schumpeter suggested that new combinations of resources are new ways of

competing and that these ways of competing do not as a rule come from existing firms,

but rather from new firms that develop alongside established firms.

Alvarez and Busenitz stated

This is consistent with the notion of strategic complementarily that suggests that
when the quantities of capital goods that are complements go up because of
increased demand, the marginal productivity of the good is raised and the
demand goes up. (2001, p. 765)

Alvarez and Busenitz shared their view of qualitative research in general and the

increased demand created by the lead entrepreneur in particular:

A familiar form of monopolistic competition characterizes the resulting
equilibrium, though now instead of one large firm there is a large number of small
firms. What has occurred is that total profits have likely minimized at the lowest
level of uncertainty and we now have firms functioning efficiently where as before
there might have been waste which occurred as a result of reorganizing
resources. (2001, p. 765)

The innovative entrepreneurial act of once again recombining new resources

start a new cycle (Schumpeter, 1934). The entrepreneur’s ability to continuously

innovate is the primary competitive advantage of the entrepreneurial firm, sustainable

entrepreneurial firms, and sustainable wealth creation (Alvarez & Barney, 2001). Park

noted that “small business activities today are a symbol, perhaps the key symbol, of

Korean-American identity and success” (1997, p. 206).
28
Entrepreneurs use their “strength of weak ties” (Granovetter, 1982) to expose

themselves to a broader cross-section of people and situations that they in turn give

them the opportunity to extrapolate and make extensions regarding new venture

opportunities. While the nature of their social interactions tend to remain somewhat of

an enigma, the part of who they are is a resource and a potential advantage in new

venture creation (Alvarez & Busenitz, 2001). This interaction provided them with

substantial exposure to unusual and different ideas and resources.

In firms different people have different habits, thoughts, and models of the world

that present obstacles to the efficient coordination of their actions (Foss, 1999). A

collective knowledge base is required for coordination (Penrose, 1959). This collective

knowledge base coordinates existing distributed knowledge but also coordinates

intrafirm learning processes. Indeed, coordinated knowledge bases help the firm

organize a localized discovery process. To be successful for any length of time a firm

must innovate (Rumelt, 1987). Since innovation requires a certain amount of preexisting

capabilities firms need to be able to learn (Schumpeter, 1934). In order for firms to

incorporate the skills and resources to sustain, innovation must be present.

Some entrepreneurship scholars are seeking to better identify the distinctive

domain of entrepreneurship (Busenitz et al., 2003; Shane & Venkataraman, 2000).

Entrepreneurship scholars should not “shy” away from an area of research simply

because some researchers are examining a question or theory in another discipline. In

entrepreneurship we need to apply our own unique lens to the examination of these

questions and theories. This extends the efforts to better clarify the domain of

entrepreneurship.
29
Today, entrepreneurial activity has been accepted generally as supplying positive

and productive contribution to the economic development of the country. Entrepreneurs

are related as an essential movement model agent, using indigenous sources, to

produce market and to manage business (Pasual, 1990).

The most important characteristics of a successful entrepreneur depend on

imagination, effort, deliberation and maintenance of an individual who has the attitude

(Jumaat, Ishak, Fairuz, & Rohani, 2004). Positive attitude towards entrepreneurship can

give a person the ability to imagine, effort ability as well as deliberation and

maintenance in managing a business.

A business person or an entrepreneur has a certain quality personality. Quality

personality aspects consist of attitudes, values and the spirit to achieve success. Morris

(1989) regarded attitudes as one of the quality aspects that is important because the

attitude of a person plays an important role in determining whether a man or woman has

interest in a particular business.

Stewart and Roth explained, “As a result, divergent theoretical positions and

discordant empirical findings have culminated in confusion in the entrepreneurial risk

propensity literature and in an impasse in theory development associated with

dispositions and entrepreneurial risk behavior” (2001, p. 145).

Planning in Small Businesses

A number of studies have shown that small firms tend to place great emphasis

on operational planning (Nylen, 1985; Sharader, Mulford, & Blackburn, 1989).

Numerous articles in academic publications as well as practitioner-oriented journals
30
have emphasized the importance of planning for small businesses (N. A. Ibrahim et al.,

2004). Good planning is a key to the firm’s success (Aram & Cowen, 1990; Barton &

Hounsell, 1994) and is a major contributor to profitability (Schwenk & Sharader, 1993).

Rue and Ibrahim (1996) reported the results of a survey on 128 businesses.

They found that 59% of these companies had prepared written plans and that 96% of

these plans included one or more quantified objectives.

N. A. Ibrahim et al. stated

The two most frequently cited objectives were sales and earnings that were used
by 84% and 71% of these firms, respectively. The study also examined the
various planning tools used by these companies. They included the analysis of
factors outside the operating environment that are used as inputs to the written
plans, the development of plans and budgets for further growth and expansion of
the business, and the use of various pro-forma financial statements. (2004, p. 53)
Planning can only be a useful managerial function if objectives are properly

chosen (N. A. Ibrahim et al., 2004). Without concrete objectives, the entire planning

activity can easily turn into a futile exercise. Objectives provide benchmarks for

evaluating progress (Richards, 1986). They represent a managerial commitment to

achieving certain results.

31
Chapter III: Methodology

3.Introduction

The research methodology is the set of processes used to collect and analyze data

(Leedy & Omrod, 2001).This chapter presents details about the methodology adopted

and elaborates the chosen research philosophy, approach and strategy used and the

reasons for their selection. Further, this chapter describes the sample population and

how the primary data was collected and processed. This chapter further explains the

data collection tool and highlights validity, authenticity and reliability of the data

collected.

3.2 Research Framework

Saunders et al. (2007) define an exploratory study as a valuable means of finding out

‘what is happening; to seek new insights; to ask questions and to assess phenomena in

a new light study. Further, they define interpretivism as a theory of knowledge that

depicts the methods, validity and scope of the research. This theory advocates that it is

necessary for the researcher to understand difference between humans as social actors

(Saunders, Lewis & Thornhil, 2007). ). Hence, the study was conducted in the

interpretivism philosophy, because the aim of the researcher was to understand

international entrepreneurship activities of Pakistanis in the United Kingdom in the

clothing trade. For this purpose, the researcher conducted questionnaire based surveys

which were distributed among 50 Pakistani entrepreneurs. Key informants in the survey

32
were the owners or general managers since they are knowledgeable about their firms’

characteristics, management style, and performance.

3.3 Sampling

In order to investigate the entrepreneurship activities of Pakistani entrepreneurs

engaged in cloth trading in UK, the researcher further chose 5 participants of the

survey for follow up interviews. From this population, the researcher collected primary

data through self administered semi-structured questionnaires and telephonic

interviews. The questionnaires were sent through email and the contact information was

sought from internet websites. A volunteer consent of the participants was sought to

participate in this research before emailing them the questionnaire. The respondents

were emailed questionnaire along with a cover letter (Appendix A) that explained the

purpose of the study. According to Creswell (2005), participation should always be

voluntary and confidentiality should be assured. In order to maintain the confidentiality,

the participants were assured of their anonymity.

3.4 Data Collection tool

In order to ascertain the views, opinions, and perception of the Pakistani entrepreneurs,

primary data was collected from the participants of this research as only they could offer

insight about the topic being explored. This specific information could not be obtained

from secondary data, as it would have been collected for other purposes. Therefore,

questionnaires used to allow the researcher to obtain this information. Data collected

was analyzed using SPSS in order to examine the three factors: (1) organizational

characteristics; (2) international entrepreneurship activities; and (3) firm performance;

33
and (4) barriers in the development of entrepreneurship. The first section asked the

participants to highlight general information about themselves. The second section

asked the firms about their strategic performance. The third section concerns firms’

management style, inquiring about their entrepreneurial orientation. The last section

asks respondents to provide information about the obstacles and barriers they faced in

development of their entrepreneurship activities in UK.

After all the questionnaires were received back from the respondents, the

responses were fed in SPSS version 14, the most reliable software for gendering

analytical results. SPSS for Windows offers with а variety of capabilities for the entire

analytical process. With SPSS, we can generate decision-making information quickly

using powerful statistics, understand and effectively present our results with high-quality

tabular and graphical output, and share our results with others using а variety of

reporting methods. Results from our data analysis enable us to make smarter decisions

more quickly by uncovering key facts, patterns, and trends.

Some of the construct were measured by some three to six Likert scale items.

Harrison and McLaughlin (1993) show that Likert-type scales tend to bias participants’

responses toward center point of the scale because participants implicitly assume that

the center point is the normal or average.

3.5 Collection and utilization of the Secondary data

There are two ways of finding the secondary sources related to the research: the

library and the internet. The literature search was conducted using both these

34
approaches. The researcher explored and scanned the secondary literature in the

books and journals of library accessing the online library portals like Athens ProQuest.

Internet was also explored extensively to find the relevant data required for this study.

This data was acquired through the Emerald website to which the Athens provides

access and has a link. Journals are a vital literature source for any research and the

articles are easily accessible (Saunders et al., 2007). In addition, books are written for

specific audiences and the material in them is presented in a more ordered and

accessible manner than in journals, pulling together a wider range of topics (Saunders

et al. 2007). All these resources were utilized and necessary and relevant data was

gathered in order to give weight, authenticity and validity to the literature review and

make the study topic more comprehensive and useful. . The literature review also linked

the different ideas found in the literature to form a cohesive and coherent argument,

which sets in context and justifies the research (Saunders et al. 2007).

3.8 Validity

Validity of qualitatively based questionnaire surveys refers to the extent to which

the researcher gains access to their participants’ knowledge and experience. It enables

the researcher to infer a meaning that the participant intended from the language that

was used by this person (Saunders et al., 2007). The survey questionnaire was

designed to gain access to the Pakistani entrepreneurs’ knowledge and experience

regarding their ventures to expand their business boundaries to the UK market and the

obstacles and barriers they face in that particular business environment. This

35
questionnaire was designed to help researcher to understand the deeper meaning of

the participants’ views and to infer the results this survey aimed at.

For all secondary data a detailed assessment of the validity and reliability will

involve an assessment of the method or methods used to collect the data (Saunders et

al., 2007). The secondary data collection methods have been described in section 3.5

(collection and utilization of the secondary data). The validity of secondary data can also

be assessed quickly by looking at the sources of the data (Saunders et al., 2007).

According to Saunders et al., (2007), Dochartaigh and others refer to this as

assessing the authority or reputation of the source. The main sources of secondary data

in this research study were books and journals from the Emerald online database. It is

important to discover the person or organization responsible for the data and to be able

to obtain additional information through which one can assess the reliability of the

source (Saunders et al., 2007). For data in printed publications this is usually

reasonably straightforward (Saunders et al., 2007). The persons or organizations

responsible for the data and the additional information can be easily accessed in the

secondary data sources used for this research study.

3.9 Reliability

Reliability refers to the extent to which data collection techniques or analysis

procedures will yield consistent findings. (Saunders et. at. 2007) Marshal and Rossman,

as cited by Saunders et al. (2007) state that one response to the issue of reliability is

that the findings derived from using non-standard research methods are not necessarily

intended to be repeatable since they reflect reality at the time they were collected, in a

situation which may be subject to change. Marshall and Rossman suggest that where
36
this approach is used, one should make and retain notes relating to the research

design, the reasons underpinning the choice of strategy and methods, and the data

obtained (Saunders et al., 2007). Reliability was also fulfilled in describing the

strategies and methods used in this chapter and the detailed findings in chapter 4.

3.10 Summary of the chapter

This chapter has highlighted the research philosophy, techniques and methods

used for this study. The study has relied questionnaire based surveys conducted with

selected Pakistani entrepreneurs developing their cloth trade in the UK. This was the

best available method to conduct survey. Although the responses of the employees may

be biased as their opinion may be influenced by their own individual experiences at the

time of conducting this survey, yet this research provides a lot of interesting information

regarding impacts of design changes on the cost and scheduled completion of the

project.

37
Chapter IV: Results

4.1 Introduction

In this chapter, the researcher will show the results of the primary data collected

through the questionnaire based surveys and telephonic interviews conducted with the

Pakistani entrepreneurs developing their cloth trading in the UK. In the first section, the

results of survey questionnaire will be discussed while the interview results will be

discussed inn the second part of this chapter. The purpose of this research was to

ascertain the conception of the Pakistani entrepreneurs about obstacles and barriers

they face while developing their entrepreneurship in UK which has a different business,

financial and cultural setup than the setup they are used to at their own country. In this

section, the researcher will present the demographic information of the respondents,

and will also discuss their response towards the questions asked about different

aspects of the entrepreneurship activities in the UK.

4.2 Demographics

The researcher invited 50 participants to take part in this survey which were sent to

them by emails. The participation ratio was 100% as all them returned the duly filled in

questionnaires. However, as some participants completed the questionnaire partially or

there were some blank responses, these responses were not counted. All of the

participants belonged to Pakistani ethnicity which represents their unique traits and

characteristics of a particular socio-economic culture. A prior consent was sought

before conducting this survey for participating in this research study. The data analysis

discusses the survey results using descriptive method. According to Gay and Airasian
38
(2003), when presenting the results of a questionnaire study, the response rate for each

item should be given as well as the total sample size and the overall percentage of

returns. This is because not all respondents will answer all questions. Each section of

the survey will be summarized as well as the comments and suggestions made by the

participants.

Interestingly, all of the participants of this study were male which shows the

particular characteristic of the Pakistani society. The majority of the participants were

within the 30-55 age range which shows they were well matured to start a business in a

diverse environment. The majority of them had been working in the current position

since 4-9 years and the majority of them were the administrators of their firms.

4.3 Resources acquisition

The participants were asked to disclose how they start the business to which the

majority (80%) responded that they started it through their own venture while only 10%

told they acquired the business from their family. However, the other 10% said they

bought the business from a non-family member.

The majority of the participants (70%) said their firm performance was very high in profit

while 60% of them said their firm had very big market share. Most of them (67%) said

they borrowed 25-49% of money for the entrepreneurship whereas 15% said they

borrowed less than 10% capital to start the business.

Similarly, the majority of the participants (82%) said they got load or equity from friends

or their relatives whereas only 14% of them said they were financed by the bank loan.

39
On the other hand, 35% of them said they had personal savings which helped them to

start the business.

Majority of them had mission statements (92%) while 75% had long term goals to keep

the business running in the UK. However, only 43% had their strategic plan which

shows they lacked enough marketing experience and skills.

4.4 Entrepreneurship experience

The next section was based on five likert-scale responses to various questions relating

to their entrepreneurship experience in the UK. The responses show that for the

majority of the participants the expansion to international market was a positive move

which helped them to reduce the cost (56.1% agreed, while 28.6% remained neutral).

However, eight participant disagreed with the statement showing that there are also

some risk factors involved which may increase the cost of labor or product (table 1).

Table 1: International experience and cost reduction

Cumulative
Frequency Percent Valid Percent Percent
Valid Agree 28 56.0 56.0 56.0
Neutral 14 28.0 28.0 84.0
Disagree 8 16.0 16.0 100.0
Total 50 100.0 100.0

Another important factor that gives benefit to the international entrepreneurs is its

advantage over our domestic competitors. As shown in the next table, the international

venture positively impacts the image of the company. Thus, in this context, the results

shown in table 2 demonstrate that all the participants acknowledge that their

40
international entrepreneurship had given them an advantage over their competitors

(strongly agree 30%; agree 56%; and neutral 14.3%) whereas no participant disagreed

with this statement showing there is no negative signs or impact of venturing in

international market.

Table 2: Advantage over domestic competitors

Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly agree 15 30.0 30.0 30.0
Agree 28 56.0 56.0 86.0
Neutral 7 14.0 14.0 100.0
Total 50 100.0 100.0

Future planning involves insight and solid experience in order to meet success in

international competitive environment. Thus, the international entrepreneurship activities

help a lot in the direction of future planning and business improvement. The same views

were indorsed by the participants of this study who affirmed that their international

experience had taught them a lot about planning for the future (44% strongly agreed

with the statement while 56% agreed).

Table 3: Planning for the future growth
Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly agree 22 44.0 44.0 44.0
Agree 28 56.0 56.0 100.0
Total 50 100.0 100.0

41
However, in order to succeed in international market, it is imperative that bold and

independent decisions should be taken to exploit any opportunities. For this purpose, a

clear mindset is required in by the Pakistani entrepreneurs. When the same statement

was given to the participants, there had mixed feelings. 56% agreed with the statement

while 44% disagreed which shows that the participants are still hesitant to take risk in

international market (table 4).

Table 4: bold, independent posture to exploit new opportunities

Cumulative
Frequency Percent Valid Percent Percent
Valid Agree 28 56.0 56.0 56.0
Disagree 22 44.0 44.0 100.0
Total 50 100.0 100.0

4.5 Obstacles and barriers in UK

Though the results discussed in the previous sections have demonstrated that the

entrepreneurship activities by the Pakistani cloth traders were fairly encouraging and

they were well established and good experienced, yet they were facing certain barriers

and obstacles which needed further attention and discussion.

As indicated in the questionnaire (appendix A), a section of it required the participants to

highlight various levels of obstacles and barriers that they faced. The responses to this

section show that the majority of them especially faced the start-up and financial

support which is evident from the fact that the Pakistani community is comparatively

smaller than the other ethnic minorities in the UK. Similarly, the other most notable

42
barrier came to be known as the business management skills. This is mainly due to the

fact that there are no training facilities that they avail for starting their entrepreneurship

activities in the UK market. The third ranked barrier by the participants was the

language skill and the racial bias which the Pakistani community faces in the UK. Thus,

to sum up, the Pakistani entrepreneurs mainly face the barriers of lack of finance, non-

availability of bank loans, lack of management skills and to some extent the racial bias

in the UK community.

4.4 Follow up Interviews

This section describes in detail the results from the follow up semi-structured

interviews with the participants of this study. These participants were selected as a

result of their consent sought through the questionnaires surveys. The respondents in

the end of the questionnaire surveys were asked if they were wiling to be interviewed

and the ones who showed their willingness were later contacted at their own chosen

time and there were sufficient intervals between each interview in order to enable the

researcher to transcribe the interviews and also to make suitable changes for the next

interview in the light of the previous interview experience and response. A table

detailing the population who participated in the interview and the details of their

respective occupation is given below:

43
Table 5: Participants of the primary data collection

Participant A Mr. Subtain Islam is an entrepreneur
belonging to Faisalabad city of
Pakistan. He came to the UK in early
80s and after changing many
professions, started his own clothing
importing trade.

Participant B Mr. Wajahat is Karachi-based UK
settler whose parents came to UK in
early 70. He inherited the cloth
business from his parents and took
many innovative steps to shape it to the
present setup.
Participant C Mr. Ali came to UK as a student and
after unsuccessful job attempts began
cloth trading after acquiring substantial
bank loans.

Participant D The participant D belonged to a middle
class family of Pakistani city of Gujrat.
He got a chance to become a manager
in a cloth trader’s firm run by a
Pakistani entrepreneurs.

Participant E Mr. Alvi is an experienced and well
qualified entrepreneur from Faisalabad
city of Pakistan. He imports different
varieties of clothes from Pakistan and
is very successful in his business.

For this interview session a total of 10 questions were prepared (see “Appendix

B” for detailed questions and answers). Like the questionnaire these questions intended

to ascertain the participants’ views on barriers of entrepreneurship activities in the UK

by the Pakistani cloth traders.

Below is the brief of the responses to the interview questions which were

transcribed and abridged in order to present the findings in concise format.

44
Dealing with Obstacles

Participant A: Money is always a problem. One obstacle I faced was with the bank.

Sometimes you have to have loans with the bank and you need to form a good

reputation. When I needed money, they would say we are not accepting your

organization’s collateral. That wasn’t an easy thing. I had to get around it. It took me a

while to get a loan from the bank because they had to see if I was able. (P) and I put in

a lot of hours with the business. 95% of our community puts in 60 hours a week.

Participant B: You have to know how to handle your finance. If you know how to

handle that, it is a lot easier. Employees are one big problem that businesses have. You

sometimes have more theft by employees than by your customers. You can have no

problems with your customers, but you can have problems with employees. You have to

be neat. (P) That is the key. When a customer walks in (P) and sees that the place is

clean and smells good, they like it and they will come back.

Participant C: When you first start your business, you are faced with financial

difficulties and that is the majority, especially, if you do not have enough money to start

a business. You are also looking through finances and renting if the business is not

making enough money. Once you start paying the bills and payments, you are doing

well. The first 3 or 4 years is very difficult because (PP) you have to try to support your

business and it’s a tough situation. Employees are a big expense. You have to hire

enough help to do the job. If you do not hire enough, you are doing more work than you

45
should and that will put a strain on your life. (PP) Inventory control is important too,

because you do not want to overstock or under stock. You have to watch your inventory

and it plays a big role in the business.

Participant D: You have to bring in employees that run the business when you are not

there. To be honest, (P) there aren’t too many employees that aren’t honest. Another

obstacle includes facing people that make fun of your accents even if you speak the

best English there is. People look at you and treat you differently. It’s all connected. The

way you want to emerge with the people and the way you want to know their culture

(PP), as well as the merchandise they want is very important.

Participant E: First off, I know how to take care of my customers. I also take care of my

employees. Each employee has his or her own job and duty. I also provide training for

my employees. (P) My prices range well and my customers are happy with them. The

customers like the employees and they like me. Some vendors do not deliver in this

area so therefore, I pick it up myself, so I can satisfy my customers.

The Essential Marketing Principles

Participant A: At first, I had a 1200 sq. ft store that did good business. The area was in

need of a bigger store, so I built a 5000 sq. ft store. Some marketing that was involved

was a sale paper that went out to nearly 10,000 homes. I used to do it every month and

a half. I did it for a few years to let people know of the expansion, (P) and we were

46
attracting a lot of people to come here. (P) If you don’t change your strategy, you are

going to keep going down.

Participant B: Your finance source is very important; (P) if you don’t have that, nothing

is going to happen. You must have a good location and treat the customer’s right. (P)

The right products are also important. You have to start giving things away, like buy

one, get one free. You have to use your intelligence and your experience. You have to

know how you are going to fight back with the big stores. Another strategy is ATM, Visa,

and money orders. These things are used to bring more customers here (P) and are

considered both long and short term strategies to me.

Participant C: The way I advertise is in the local paper. It is handed out on a weekly

basis and that paper goes to people’s houses. They look at your products and prices

and if they are interested, they are going to come to you. Advertisement helped me a

lot. Financing is the main source of it. You need to have inventory management and

have enough to sell. We price everything accordingly and reasonably. If I go too high, I

won’t be making money. I treat the customers with honesty and respect, (P) and that’s

the ticket.

Participant D: You have to show the people you have new ideas, you need to have

what they want, the hours they want, and when they see everything that has changed

and you do mean business. You deal with the people the way they want to be treated.

(PP) In small businesses, you have to light up the place because they notice that more.

47
I went around to all my competition and saw what they all had. (P) You have to see

what your customers want and provide that. If you are new in the area, you want to give

the same prices as your competition and you treat them with respect, are courteous,

and show honesty towards them.

Participant E: I put more stock where there are more sales. I order triple the amount,

put them in the backroom, and that makes my sales. I also have money orders available

to the consumers. I also provide Western Union. Whenever the customers ask me for

something, I bring it in right away. (PP) I’m always thinking of ways to make it more

convenient for the customers. A lot of customers ask me for it and I’m thinking of adding

it.

Experiencing Success

Participant A: I define a successful entrepreneur as having a good business. You can

owe money, but be comfortable enough to pay bills. You will have plenty of business. I

am pretty successful. I also saved money on the side. I saved for about 5 to 6 years. I

bought me a business. I did it all on my own. I saved my money for a business with a

good future in it.

Participant B: I have been in this location almost 20 years. I still have my first customer

from 10 years ago. Customers bring in other customers. This is one of reasons I have

lasted for about 20 years and how I know that I am successful. The confidence of my

customers helped me know I was successful. The bank was one of the sources to help

48
me get what I needed. My background was banking. Another background that assisted

me was that I am a business graduate. When I worked in sales, (P) I used to run into

different categories of stores. I have built good relationships with storeowners, and they

have discussed their problems with me. My community has also helped me build

experience.

Participant C: I define success as overcoming all the obstacles that are created, paying

all your payments, saving money on the side, and advancing to the next step.

Everything I have to do, I work for it. You have to work your way up.

Participant D: Success is when I see more people coming to my business. I see

success when my business is paying the bills, paying the taxes, and paying the

employees. I started working two jobs and worked until I felt experienced enough,

confident, and had good credit with the bank. That was enough to tell me it was time to

open a business.

Participant E: I define my success by the profit I make. I have more experience in

stores. Nobody ever gave me any money. I did this all myself. I did it with my own

money for my own business. I learned from wholesale, from other people I worked with,

and where I worked. I also worked with different people and I have learned from them,

which helped me get an outlook on being an entrepreneur.

49
Advice for Entrepreneurs

Participant A: Making displays and window signs in your stores helps bring the

products’ attention. You need to make sure you are putting good prices (P) because

that is very important.

Participant B: You need to make prices reasonable. You want to be reasonable and

fair. You have to give up things—like sales. The trust between you and your customers

is valuable and you must always respect them.

Participant C: Sometimes you can do displays and that helps push your product to a

good location in your establishment, like in the center of the aisle or close to the cash

the way of promoting a new product and to get the attention of people.

Participant D: You have to have an organized store and have what the customers

need. I am always in a continuous change. I keep my head above water. When the

vendors suggest something, (P) I ask all the customers. All the customers need is a

clean business and a well stocked one.

George Henry: I open early hours from 8 a.m.-12 a.m. I open late hours also. I get

more business by opening with these hours. I put extra hours to get the extra business.

You have to have a clean and big store. You must put out a lot of inventory and have

good management. You want to treat your customers well all the time.

50
Chapter V: Discussion and Conclusion

5.1 Introduction

This chapter will present and discuss the results of this study as well as offer

conclusion and recommendations based on the review of the literature and the findings

of the primary research. In order to collect the primary data, the researcher conducted

the surveys and interviewed the Pakistani entrepreneurs in the UK engaged in cloth

trading. The main focus while conducting this research was to ascertain the perception

on the obstacles and barriers they face in the UK society. For this purpose, the

researcher designed a few preliminary questions which were the basis of this research.

These questions were:

1. What are the major barriers in establishing Pakistani clothing business in

London?

2. How these barriers can be reduced?

3. What are the characteristics of Pakistani minority in terms of their business skills

needs?

Based on these preliminary questions the researcher set the following specific

objectives before conducting this research:

1. To analyze barriers facing the Pakistani minority in business development in

London.

2. To investigate how Pakistani minority business growth risk can be analyzed

3. To enhance the ability of ‘Management and marketing’ in the Pakistani Minority

51
4. Try to examine the characteristics of the Pakistani Minority in terms of their

business needs.

The focus of this study was on two fundamental aspects of entrepreneurship. The

one was on the marketing strategies and the theoretical base while the second main

aim was to ascertain the barriers and obstacles that the Pakistani entrepreneurs face in

the UK. The framework and methodology presented were based on the view that the

market was the common denominator when developing functional strategies (Berry et

al., 1999). The views, similarities, and differences of many of these authors are

presented throughout this study. The fundamental meaning is that there is something

about successful entrepreneurs that permit them to defeat obstacles and go on to

entrepreneurial success.

This research effort used a qualitative design and methodology as a basis to

discover and understand the obstacles and barriers of Pakistani entrepreneurs in the

UK. Rudestam and Newton explained, “The reader needs to understand what you did

and how you thought about it in order to appreciate the links among the research

problem, the method, and the results” (1992, p. 90).

This study sought to understand the essential principles and importance of the

marketing strategy and mitigated obstacles that led to successful entrepreneurship. The

data were collected using semi-structured interviews and self-administered

questionnaire based surveys. The survey data was analyzed with SPSS while the

interview data were analyzed using content analysis procedures appropriate for a

qualitative study.

52
Two themes emerged as the essential principles from the details of the primary data

collected from the participants. The themes were: knowledge of customer service to

overcome obstacles, and planning success with a profit byproduct.

6.2 Limitations encountered

This study concentrated on Pakistani entrepreneurs of cloth trading in the UK. As it

was the only ethnic group the researcher conducted the primary research there was no

significant limitation encountered. All of the participants extended their full cooperation

during the process of collecting the data and too readily filled up the questionnaire sent

to them. However, time factor was a significant limitation to complete this study. If the

researcher had more time, the study could have been more valuable.

6.3 Implications for management

The findings of this study are thought provoking and have significant implications for the

management. There are many advantages and benefits of international

entrepreneurship activities as these not only help to generate more financial advantages

but also can significantly improve the firm’s performance through international exposure

and competitive environment. However, every entrepreneur has to face certain kind of

barriers in a new socio-economic culture which significantly impedes the firm’s

performance. In order to overcome these barriers and obstacles it is vitally important to

understand these barriers. This study has explored the international entrepreneurship

activities of Pakistani cloth traders in the UK in terms of their antecedents and

53
consequences; examined the barriers and obstacles and discussed the marketing

strategies they need to adopt. The research design (see Chapter III) offers potential to

provide strategic and operational recommendations to the Pakistani entrepreneurs and

policy guidance to both the Pakistani as well as the British government as the identified

barriers of language and racial discrimination, lack of sufficient capital support for the

Pakistani entrepreneurs and lack of necessary skills need further policy implementation

by these governments.

54
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Appendix “A”

Analyses of Barriers in the Development of Pakistani Entrepreneurs in the
‘Clothing trade’ in London

Note: All information will be treated as strictly confidential. Your company as well as

you will not be identified.

Please tick  one of the boxes on the right.

A. Background personal information M F
1. Gender  

2. In which of the following age categories do you belong?

18-24 25-29 30-35

36.40 41-55 56-64

65+

3. I have been working in my current position for:

Under 3 y 4-9y 10-19y Over 20y

   

4. Your Position

Director Manager Administrator Any other (please specify)

   

5. Years working for the company

Under 5y 5-10y Over 10y

  

6. Your nationality / ethnicity (please describe)
60
……………………..

B. General information about your company.

How did you acquire or start this business? Did you …

A1 – Buy or acquire it from a family member

2 – Buy or acquire it from a non-family member

œ 3 – Start the business by yourself or with partners

4- Others (please specify)

Describe your firm performance in the last three years by circling the number
corresponding to your answer.

a). Market Share: 1. Very big; 2. Big; 3. Stable; 4. Small; 5. Very small

b). Profit: 1. Very high; 2. High; 3. Average; 4. Low; 5. Very

low

How much money was borrowed?

1. 1 1 – None

2. 2 – Less than 10%

3. ; 3 – 10 to 24%

4. ; 4 – 25 to 49%

5. S 5 – 50 to 74%

6. ; 6 – 75 to 99%

7. ; 7 – 100%

Please indicate which of the following types of financing were used to start up
your business and why did you use that

1 – Bank loans

61
2 – Overdraft

3 – Commercial credit cards

4 – Loans from business lending institutions.

5 - Credit from other government programs.

6 - Leasing

7 – Personal savings

8 – Loans or equity from friends or relatives

9 – Any other sources of financing, please specify:

C. Specific information about problem solving.

1. Do you have?

a). Mission statement

Yes No

b). Long-term goal

Yes No

c). Strategic plan

Yes No

For each statement below, please circle the number that indicates your
agreement or disagreement about how it describes the characteristics of your
company, ranging from 1 (Strongly Disagree) to 5 (Strongly Agree).

Statement Strongly Agree Neutra Disagre Strongly
agree l e disagree
Our international experience
has…

improved the overall quality of our 1 2 3 4 5
62
products or services.

reduced the cost of our products or 1 2 3 4 5
services.

made this company a stronger 1 2 3 4 5
competitor for all customers we
serve.

given us access to new production 1 2 3 4 5
technologies.

increased our skills in using new 1 2 3 4 5
technologies.

Our international experience has
taught us a lot about how we
can…

improve efficiency of our 1 2 3 4 5
operations.

plan for the future growth 1 2 3 4 5

think about the competition facing 1 2 3 4 5
our company.

When faced with uncertain 1 2 3 4 5
situations, we adopt a bold,
independent posture to exploit new
opportunities.

It is not necessary to learn any 1 2 3 4 5
foreign language to conduct
international business at our
company.

We do not spend much time trying 1 2 3 4 5
to understand the cultures of our
international customers.

It is easy to adapt to unique 1 2 3 4 5
behaviors and practices of
foreigners, especially when they are
our customers.

63
We should not think of ourselves as 1 2 3 4 5
just a Pakistani company but think
of ourselves as a part of a “global
community”.

We try to benefit from diversity in 1 2 3 4 5
our environments by keeping our
strategy somewhat flexible.

Our strategy emphasizes exploiting 1 2 3 4 5
opportunities arising from changes
in the environment.

Our strategy reflects a high 1 2 3 4 5
flexibility in managing risks.

Against each phrase listed in the table below, please tick the column that shows how
strongly you think this is a barrier to the entrepreneurship activities inUK. Please tick in
the column

PHRASE Very strong Strong Fairy strong Not a barrier
Inadequate English
language skills
Lack of start-up &
development
finance
Business
experience from
country of origin
Lack of general and
market information
Racial & ethnic bias
and discrimination
Lack of business
management skills

What difficulties did you expect while obtaining finance?

Please specify:

_________________________________________________________
_________________________________________________________

64
_________________________________________________________

Have your business ever been refused credit?

Yes No

Initially did you receive assistance with your business from government?

Yes No

Based upon your past experience, where would you look for help in the future
and why

1 Banks

2 Finance Provider

3 Family and Friends

4 Other _________________

Why
__________________________________________________________________

__________________________________________________________________

Thank you for completing this questionnaire. Your response will be kept strictly
anonymous.

65
Appendix B

Obstacles:
1. What were the internal obstacles you faced in early entrepreneurial

development?

2. What were the external obstacles you faced in early entrepreneurial

development?

Essential Marketing Principles

1. What are the essential marketing principles that helped you overcome obstacles

and lead you to entrepreneurial success?

2. What resources are needed in order to create a marketing strategy?

3. What are the entrepreneurship principles and practices necessary to create both

the short and long term strategy?

Successful Entrepreneur:

1. How do you define a successful entrepreneur?

2. Have people contributed directly to your success (in terms of money, fixture,

inventory, etc.)?

3. How did you learn the things you needed to learn to be successful in the

marketing strategy (from books, training, seminars, etc.)?

Developing Entrepreneurship:

1. What program will you suggest to bring your product to the attention of

prospective customers?

66
2. What additional thoughts, principals or practices came up as we talked regarding

what we will need to learn to be successful?

67