Women Entrepreneurship in SMEs in Iran

It has been thought that Entrepreneurs, in general, are recognized by their success or their failure. However, it goes without saying that the nature of business venture that they undertake and the manner in which they handle their business, are the main factors that determine their relative success or, in fact, failure. Consequently, it is not too far-fetched to believe in the fact that such relative success could or in fact would depend on the type of business ventured into by an entrepreneur. It is even more relevant in case of women entrepreneurs as there are numerous factors that impact their ventures. They learn the nuances of business only after they start a particular venture. These factors could begin with social factors, gender differences, issues on equality as well their ability to run a business in a much dominated male environment.

Nevertheless, in order to understand the true nature of women entrepreneurship, the types of businesses undertaken in Iran need to be studied. In fact, one can examine the women entrepreneurs for not only traditional businesses but also in modern businesses, which involve some amount of technical knowledge. Indeed, one needs to take into consideration the fact that Iran is a developing country, much like India, Malaysia or even Indonesia. As claimed by Ganeshan (2004), women entrepreneurs in India generally undertake three types of industrial enterprises: (1) entrepreneurs operating purely as subcontractor on raw materials provided by their customers; (2) manufacturers of items that are usually used by large scale units; and (3) manufacturers of consumer products which are directly sold in the market. Evidently, in Iran, women are also divided in such category.

Statement of the Problem

The main objective of this research was finding the reasons for starting a venture or a new enterprise and, subsequently, the dominant factors that influenced women to take up entrepreneurship. Studies have revealed that women became entrepreneurs due to various reasons classified as pull and push factors. Pull factors are those which encourage women to have an independent occupation. Under the influence of these factors, women entrepreneurs choose a profession as a challenge, adventure, with an urge to do something new. On the other hand, the push factors are those, which compel women to take up business enterprises to get over financial difficulties and responsibilities. Nevertheless, many women take to entrepreneurship to fulfil an urge for independence and creativity. The role of Government agencies and NGOs cannot be ignored. Women entrepreneurship is one of the key focus areas in the various policies for women development.

Therefore, in this study, the researcher would like to examine the different reasons for Iranian women to start a new business venture and compare those reasons with the difficulties that they might face such as religious limitations such as the dress code for Iranian women imposed by the government and cultural constraints such as male supremacy that regards men as superior to women. These two main factors will be studied in more depth and details since many women in Iran have been pulled back from fulfilling their innate capabilities and potentials simply because they were women and in Iranian society they had to face different forms of cultural constraints such as male supremacy as well as religious limitations that could in theory and would in practice undermine the scope of their success.

Research Questions

Therefore, in order to conduct the following study, the researcher decided to narrow down the many aspects and parameters involved into three main factors mentioned above and formed the following research questions.

Is there any relationship between cultural constraints such as male supremacy and the rate of success in women entrepreneurship?

Is there any relationship between religious limitations such as the dress code for women and the rate of success in women entrepreneurship?

Research Hypothesis

Subsequently, the researcher transformed these research questions into research hypothesis so that the questions could be analyzed in a more scientific and hierarchical format.

There is no relationship between cultural constraints such as male supremacy and the rate of success in women entrepreneurship.

There is no relationship between religious limitations such as dress code and the rate of success in women entrepreneurship.

Research Objective

The objective of this study is to see if the results of the questionnaire given to 42 women entrepreneurs in Iran managing different forms of SMEs, whether in the textile industry or the cosmetic trade, has a statistically significant correlation within two paradigm of religious limitations and cultural constraints with regard to rate of their success which will be operationally defined and measured in their annual turnover, rise in sales and profit as well as capital enlargement. The researcher intends to see whether these factors felt by the entrepreneur that will be measured using a questionnaire simply based on their personal opinion has in fact influenced the success of their enterprise or not.

Research Methodology

The researcher will be conducting a descriptive research in a form of field study using surveys and questionnaire. The researcher will be interviewing 42 women entrepreneurs using a 36 item questionnaire that deals with their opinion regarding male supremacy in Iranian society as well as the difficulties they might have faced or at least they feared to face in Iran simply because they were women. Moreover, the questions will also deal with the religious limitations that they had to face working in Iran since the government in Tehran does and has imposed different forms of restriction on women such as the dress code that could be regarded, at least in theory, as a formidable constraint for many women entrepreneurs.

Furthermore, the interviewees will be given a survey that is kept quite confidential regarding the company annual turnover, rise in the sales as well as capital enlargement in which all aims to conclude the rate of success. Nevertheless, for the sake of face validity, the survey will be taken in the second phase of the research so that the entrepreneurs response on their opinion regarding the limitations and restrictions that they might have faced would not be influenced by the survey since their response would be quite subjective by nature and any previous administration could or at least might have an impact on their responses.

Finally, the researcher would be using SPSS software of version 17.0 to analyze the questionnaire. The researcher will be interested to see if there are any positive or even negative correlation in the factors studied in this research and, if yes, how statistically significant such correlation is at 0.05 level of significance. The researcher would like to see if the null-hypotheses would be rejected at 0.05 level of significance, in order to conclude that such factors do, in fact, influence the rate of success for women entrepreneurship.

Chapter 2

Review of Literature

2.1 Introduction

The 20th century brought many changes to the world, but rest assure that one of the changes that transformed our societies was the emergence of women as free thinkers and independent individuals who no longer seek the support of men to survive nor to succeed in the society. The beginning of the century triggered stardom in the women liberation front when they were able to obtain their God given rights to vote and participate in the democratic system of governess. Women were later asked to join the work force in farms and factories when men were struggling with two world wars. It was from then on that working women and entrepreneurship of women became an issue and for many an opportunity to see more women taking responsibility in the improvement of the economy and the industries of many developed and even in the later part of the century developing countries.

Women entrepreneurship

Very few would ever indulge themselves to understand the factors that would actually drive and ultimately allow a woman in today’s world to risk all her money and property to embark on a business venture. Hematian (2011) believes that women have always been deprived of their right to self autonomy and self reliance for many reasons. First and foremost, she believes that it is because men have always feared the rise of women as leaders in the society as a threat to teir survival. The reason is that men have realized that women are more capable in managing; whether in the family or the local community, women have shown more capability, but they have felt reluctant to the lack of motivation. Rani (1996) believes that the key factor is motivation that is the engine for a woman to take such risk. This motivation is vital for a woman to become successful and the source of this motivation can either be intrinsic or extrinsic.

Nevertheless, Rani (1996) outlines another factor apart from motivation which is ambition. The notion of ambition has been long argued with scholars as it is ambition that broadens the vision of people and makes life meaningful. It is in fact an index of one’s own resourcefulness and it is the key factor in women entrepreneurship. ”what matters much for the development of a nation is not merely the people but their aspirations and means to reach their goals. It is needless to say that ambitions differ among individuals on the basis of their personal characteristics. Ambitions nourish the achievement, motivation and help bring economic growth and development.’ p. 75

Nevertheless, what seems to be quite intriguing is how motivation and ambition differs from a woman to another when it comes to her family background. Rani (1996) studied the many factors that influence the women ambition such as the educational status of the family as well as the occupational status of the family and realized that more women who were raised in educated families and whose fathers were entrepreneurs or worked at a managerial level were eager and ultimately successful in establishing their business. Rani (1996) concludes that the fact that women are more social individuals than men and in fact, ‘a woman never considers herself alone, physically, socially or even economically, but in fact as a part of a the family, the family also seems to reciprocate this feeling at least in the case of women entrepreneurs.’ p. 82

Therefore, it is not too far-fetched to conclude that women entrepreneurs can easily be considered as the agents of social change. The governments would definitely prosper if they begin to guide women in the right direction toward economic independence, particularly through the path of entrepreneurship. This is simply due to the fact that women are widely affected by the environment, and feels a sense of belonging to it that when it is nourished in the right way, it can be more constructive than imagined. There is little doubt that supporting women in becoming more financially independent can bring about great changes for the world and prosperity for all since women are more prone to support and supply their fellow species.

Constraints in women entrepreneurship

Therefore, the entrepreneurship of women becomes the focal point of many research and studies who all wish to analyze the impact of women in the work force and understand the many factors that could affect women entrepreneurship. Many scholars have looked at this issue and they have claimed that women entrepreneurship is merely an isolated issue that could never be fully understood outside the social, cultural and even political realm. In her study, Jalbert (2000) asserts that becoming an entrepreneur is not simply a state but in fact, ‘an evolution of encountering, assessing and reacting to a series of experiences, situations, and events produced by political, economical, social and cultural change.’ P. 23

Jalbert (2000) further on notifies the simple fact that there are certain constraints that could and in fact would most likely deprive women to participate in the work force, particularly as managers, let alone become successful entrepreneurs who would have an impact on the economy. She believes that there are certain ‘cultural and social patterns’ that could hinder, limit and restrict women from fully participating in the work force as independent individuals and successful managers. Tiwara (2007) believes that these social and cultural constraints in the east are the main obstacles that stand between success and progress for most Asian and Middle Eastern countries. The men need to realize that male supremacy has deprived their communities of sustainable progress and such medieval ideologies need to be eradicated for their societies to begin blooming again.

On the other hand, Manaie (2011) analyzes the situation in a comparative form between the east and the west and outlines a series of factors that could influence women entrepreneurships, more specifically in his country Iran. Primarily, he believes that the main issue is education and assert that in the west different forms of courses are provided to inform and enlighten students and future managers of the reality of women entrepreneurship and its features, whereas in the east and more specifically in Iran such awareness is never intended. Furthermore, he believes that the lack of training courses for women entrepreneurship has created a huge gap for women who intend to embark on such a journey not knowing the difficulties they might face as women managers in the future.

Furthermore, Manaie (2011) believes that another key factor is motivation and the cultural context of the east has created a distinct feeling of reluctance for women to participate in the workforce as managers and leaders and presidents of companies and huge corporations. He strongly claims that such cultural issues has created an overwhelmingly upsetting situation for most women where they feel, as he puts it, ‘discriminated and isolated’ among successful managers who are predominantly men and unwilling to share their exclusive masculine reign with the opposite sex whom they covertly feel superior to and regretfully feel disproportionally more powerful and intelligent towards. p. 14

Manaie (2011) then proposes a series of solutions that could improve the situation for women entrepreneurship in Iran. First of all, he believes that cultural awareness is the key to success and he asserts that the divine religion of Islam does not, in any form, comply with male supremacy in the work force. It is simply the duty of the male to supply and support the family, comprising of wife and children, within the context of the family. Nevertheless, in Islam women are free to own property, do business and even manage organizations. The best example is the prophet’s wife who was in fact a merchant or could even be called a ‘women entrepreneur’ who ran and owned one of the most successful trading enterprises in the Arabian Peninsula at the time of her marriage to the prophet somewhat fourteen hundred years ago.

Moreover, there must be

Characteristic of women entrepreneurs

Noticeably, one needs to analyze women entrepreneurship in the micro perspective as to what kind of women become involved in such tedious yet challenging profession of managing dozens and sometimes hundreds of men in a company or a factory. The main question is what kind of an individual, more precisely a woman, would be interested and in fact capable of becoming a manager and what are the qualities that are shared by most of these successful women entrepreneurs. Jalbert (2000) believes that most women entrepreneurs tend to be very motivated and as she puts it ‘self-directed’ individuals. She further on believes that these women show a very high urge for control and ultimately success and accomplishment. p.23

In her research, Jalbert (2000) looked at the common characteristics that are shared by most successful women entrepreneurs and came to the conclusion that they all share four key personality traits. First and foremost, they all share the ability of communicative skills that enables an individual to, fully and could even be said efficiently, interact with their counterparts. Secondly, they all share the intuitive skill of initiation and decisiveness that makes managers who they are and what they can achieve. Thirdly, they have the consensus building ability to form coalitions as well as cooperation based on common interest and even common threats. Finally, and quite intriguingly, she asserts that they all have integrating skills that would allow an individual to prominently bind different people from different backgrounds and interests to share a common value and behave in uniform code of conduct.

It is quite evident that as technology speeds up lives and the new age is now upon us, and therefore it is important to take time to reflect upon on what will obviously be one of the driving forces of the world economy in the new century. In fact, women are an emerging economic force that policymakers and economical experts cannot afford to ignore nor neglect. What are the implications of this for businesswomen throughout the world? How can women’s business enterprises best channel this potential and maximize it to improve the status of women in the world economy? The world’s modern economy, and in fact democracy, depends on the participation of both genders.

Askari (2010) believes that women have proven themselves to be an undeniable force in the progress of countries across the globe. She believes that during the past century four main factors have contributed to this blooming need for women to take part in the economy. First of all, she believes that the industrial revolution paved the way for women to enter farms and factories and begin working with men. Secondly, the social changes and the emergence of feminism gave women the identity and the recognition they needed to consolidate their position as decision makers and leaders in the economy. Thirdly, the cultural awareness and the weakening of male supremacy proved women can have even more success than men when working as managers and leaders and idea of the male supremacy was weakened and no longer a threat to women success. Nevertheless, Askari (2010) states that the most important factor that allowed women to participate more, and more productively in the economy was education and the vast scope of educated women that appeared in the world arena paved the way for successful women managers.

In the global economy of the 21st century, international trade will be a key source of economic growth and development. Recent surveys conducted in many countries have revealed this fact, in which the National Foundation of Women Business Owners (NFWBO) has mentioned that women-owned firms involved in the global market have greater income, are more optimistic about the rate of success in their business outlook and are more focused on business expansion than women-owned firms that are to most extent ‘domestically oriented’. Joshi (2009) believes that women’s business associations can and in fact should ensure that their members, whether large or small are equipped to obtain the rewards of moving into the international spectrum. In fact, it goes without saying that women must learn how to play the international trade game, and a world network of women’s business associations can help them achieve this great goal.

Joshi (2009) further on states that information technology can help identify these mentioned markets, provide industry information and spotlight trends about what the role of women in state economies can be or should be so that optimum results would be obtained. More information about women-owned business enterprises is deeply needed to force policymakers to realize that women are an economic force to be reckoned with. Part of this process is to document the economic significance of women-owned enterprises in order to establish a constructive dialogue. Indeed, what women’s business organizations (WBOs) can provide may be summed up in three simple word; access, organization, and certainly advocacy. In some regions of the world, transformation to a market economy threatens to widen the gap of gender inequality and inevitably sexual discrimination. Furthermore, it is quite evident that such changes reflect a return to traditional norms and standards that relegated women to a secondary status. As countries become more democratic, gender inequalities lessen; thus, offering a more productive atmosphere for both sexes. Nevertheless, many argue that women are genuinely better managers than men in many aspects when given the opportunity. Hematian (2011) argues that the feminine side of women, and even in some cases in men, allows the manger to act more responsibly rather than irrationally when faced with difficulty. Dr. Hematian (2011) argues the psychological intriguing fact about women in general that is conformist rather than dis-conformist that exists in most men. The masculine feature of being rebellious blinds men from making concessions and that is the downfall of their decision making. Since, management, she states, ‘is not about victory but reducing the cost of failure.’ p. 24

Women Entrepreneurship across the globe

There is no doubt that a new generation is emerging and women from all four corners are the globe are taking part in the expansion of the world economy by their enthusiastic participation as well as their leading role in the management of different industrial and trade institutions across the globe. It might have been a dream or even a wild thought to believe that one day women even in as far places as Bangladesh can start their own businesses and become successful entrepreneurs but now we live in a world where that dream has come true as mentioned by many world figures including the noble prize winner Dr. Muhammad Yunus (2006) ”empowerment has come to the women of Bangladesh, even the poorest women in Bangladesh. It’s tremendous. It’s a dramatic change that has taken place. Women have access to money. They can now plan. They can now dream. Their children are in school. New communities are emerging. A new generation is emerging.’

On the other hand, one needs to understand that such success could and would never be achieved if the society does not recognize women as capable individuals who could stand on their own feet and have the capacity to succeed independently without any help or aid from their male counterpart. Men need to begin learning the notion of respect when it comes to women entrepreneurship and have the dignity and decency to honor and respect women who embark on such challenges to lead their own enterprise as former US Secretary of State, Condoleezza Rice (2007) puts it quite well when she says, ‘Respect for women is a prerequisite for success of countries in the modern world. In the dynamic 21st century no society can expect to nourish with half its people sitting on the sidelines, with no opportunity to develop their talents, to contribute to their economy or to play an equal part in the lives of their nations.’

In their well acclaimed research, Van Der Wees, C. & Romijn, H. (1995) elaborate on the fact that women’s business associations play a very essential role in identifying appropriate emerging sectors where women entrepreneurs can be prosperous as well as successful. In fact, the research indicated that the areas that are more probable to take off quickly during a nation’s market rejuvenation are delivery, transport, public relations, producing and consumer goods, and financial services. In this process, women business owners are innovators, job creators, and providers of economic security. Ultimately, female business owners will be recognized for who they are, what they do, and how significantly they impact the global economy. Change is afoot in the global economy and it is bearing a woman’s face.

Quite intriguingly, worldwide, many women are entrepreneurs emerge from a person’s creative mind and intuition into successful business ownership, and economic security that would benefit everyone. There is a simple truth that women bring integrity as well as commitment because they care about economic empowerment of the society as w whole, entrepreneurial development and innovation. Female entrepreneurs seek the professional and personal support that is found in business associations. Economic globalization has encouraged the expansion of female business ownership. ”The growing economic power and influence of women-owned businesses are changing the shape of the global economy,’ remarked Sakiko Fukuda-Parr, director of the UN Development Program’s Human Development Report.

On the other hand, Kollan (2009) strongly claims that the global impact of women entrepreneurs is only the beginning to gain the momentum it truly deserves. Across the world, the number of women business owners continues to women entrepreneurs in the world economy rise gradually. In fact, a recent United Nations report concluded that economic development, as a whole, is closely related to the advancement of women, in particular. In nations where women have advanced, economic growth has usually been steady. By contrast, in countries where women have been restricted, the economy has been stagnant and still struggling to develop, in the broad sense. According to the 1995 UN survey, ‘two changes have occurred over the past 10 years in the enabling environment for women in the economy. One is the establishment of legal equality for women. The other is granting women equal access to education and training.’ Women entrepreneurs are significantly affecting the global economy.

In a case study carried out by McCarthy, D., Puffer, S, & Naumov A. (1994) the results revealed that women entrepreneurs play an important role in the entrepreneurial economy, both in their ability to create new jobs for themselves and to create jobs for others in their community. In fact, the results of the study showed that in Europe (both European Union countries and other European countries), estimates indicate that there exist more than 10 million self-employed women. In the United States 6.4 million self-employed women provide employment for 9.2 million people and create significant sales. Using the United States ratio between the number of employees and self-employment it may be estimated that employed women in surveyed European countries could employ around 15 million persons. Furthermore, it was discovered that self-employment represents one of the most important job opportunities for women. This seems to be a correct conclusion independent of what country or type of economy is observed. Self-employment represents an important job alternative for many women and perhaps especially for women in developing economies. It is also observed that in all countries women still represent a minority of those that start new firms, are self-employed, or are small business owner-managers.

Women Entrepreneurship in Asia

One needs to acknowledge the simple fact that women entrepreneurship has not been as well accepted and even welcomed in the east as it has been in the west. Nevertheless, one needs to understand that the east has been improving and the statistics regarding this is quite intriguing to analyze. For instance, in India there has been enormous energy put into the private sector to help women entrepreneurship and in some case more support has been allocated to the women entrepreneurs than their male counterpart to make sure that the initiative would give them an advantage. Tiwari (2007) believes that women entrepreneurs have had a very efficient as well as productive role in the enhancement of the Indian economy during the past decade. Nevertheless, there is an issue that, ‘the social structures of today have prevented the balanced development of women along side with men.’ P. 31

Tiwari (2007) continues further on suggesting that as a remedy women should be given an advantage when embarking on business ventures. ‘There are two streams of thoughts for the promotion of women entrepreneurship. First stream argue that women should be given higher priority” and certainly the second argues that both men and women should be equally supported. The first view has been receiving more momentum in the Indian economy due to the fact that many politicians have now come to the conclusion that the women are more eager to take part in the improvement of the economy and by supporting them they could benefit both from their effort and their support in coming elections. In fact, different programs such as EDPs (Entrepreneurship Development Programs) are being carried out to meet just that scheme.

Furthermore, Tiwari (2007) discovered that more women in India are participating in the three E’s, namely being the Energy, Electronics and Engineering field. It is quite interesting to notify the fact that the new industrial policies of India have highlighted the need for special entrepreneurship programs for women entrepreneurs. This is simply designed by the administrations to enable and ultimately capable the women entrepreneurs to get a head start in their business ventures and be able to establish small-scale industries. India, as a whole, has well shown that when women are supported and motivated they can achieve much higher than their male counterparts and the integral approach from the government and non-government organization has been able to help them achieve that and it is the ongoing support of the system that has allowed them to do so well in the economy.

On the other hand, Teoh (2007) states that women entrepreneurship in the Malaysia, a fast growing economy in the Southeast Asia region, has not been as significant as it could have been anticipated. The data in the research indicate that women accounted for only 7% of employers in the economically active population of Malaysia. Noticeably, it is quite unfortunate that the figure rose to only 8.5% six years later in 1990, and that is due to the fact that men still comprised the vast majority in employer status. However, Teoh (2007) believes that with all the constraints and slow progress there is a glimpse of hope since for the past ten years the government has put more emphasis on the creation and support for newly established SMEs who are struggling to grow their business. This is due to the fact that the government has well realized that the economy is best improved by supporting small businesses, and there are many women entrepreneurs who have the ideas, resources and recruitment capabilities to bring such capital back into the economy, ‘women entrepreneurship has recently become an important pool of resources for Malaysia’s economic growth and personal prosperity.’ p.4

In the case of Malaysia, it is quite interesting to notify the fact that women account for about half of the total population, and about 36.7 percent of Malaysia’s total workforce of 10.9 million, with a significantly increasing representation at the professional, as well as the managerial and technical levels. In another study carried out women have been participating quite ‘vigorously’ in the economy and the establishment of SMEs in the country. According to Normah (2006), the participation of women in Malaysia’s small and medium enterprises (SMEs) in 2003 was 1,122,000, or 36.8% of the total employment in SMEs which proves the fact that women, as much as men and even in some cases more enthusiastically, are becoming more and more involved in creation of jobs and helping the economy.

Therefore, it might not be that stunning that the number of women entrepreneurs in Malaysia has increased so vigorously in the past thirty years due to the emphasis on industrialization by the state and the active governess, and growing interests in the private sector and the whole notion of privatization, self-employment and business-oriented employment that seems to be the key issue in h