Cultural Theories
Cultural Theories of Entrepreneurship
Why do some societies produce more startups than others? Cultural theories suggest that entrepreneurship is not just an economic act, but a product of social values, religion, and the unique position of "outsiders" within a community.
1. National Values and Religion
Theories that look at the shared mindset of a population.
- Cultural Dimensions Theory (Hofstede): Argues that cultural values—specifically Individualism (vs. Collectivism) and Low Uncertainty Avoidance—are strong predictors of high entrepreneurial activity in a nation.
- Weber’s Religious Theory (The Protestant Ethic): Max Weber's famous proposition that the "Protestant Work Ethic"—which valued frugality, hard work, and worldly success as a sign of salvation—created the cultural foundation for modern capitalism.
- The Achieving Society (McClelland): While psychological, McClelland applied Achievement Motivation to entire cultures, arguing that societies that tell stories of overcoming challenges produce more entrepreneurs and faster economic growth.
- Hoselitz’s Modernization Theory: Posits that as societies move from "traditional" (ascription-based) to "modern" (achievement-based) cultures, the supply of entrepreneurs increases.
2. The Outsider Advantage (Immigrants & Misfits)
Why are immigrants and social outliers so often over-represented in entrepreneurship?
- Bicultural Theory: Posits that individuals who navigate two cultures (e.g., immigrants) develop "cognitive flexibility." They are better at spotting opportunities because they can view problems through two different cultural lenses.
- Withdrawal of Status Respect (Hagen): Suggests that entrepreneurship arises from social groups who have lost their traditional status (e.g., displaced elites or minorities). To regain their lost social standing, they turn to economic innovation.
- Misfit Theory: Argues that individuals become entrepreneurs because they cannot align with the rigid values of large corporations or mainstream society. They start firms not just for profit, but to create an environment where they fit in.
