Model Answer to Assignment m Ed 2

8/3/2019 Model Answer to Assignment m Ed 2

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MODEL ANSWER TO ASSIGNMENT 1 M.Ed

OBSTACLES TO WOMENS ENTREPRENEURSHIP

Introduction

Women Entrepreneurs may be defined as the women or a group of womenwho initiate, organize and operate a business enterprise. Government ofIndia has defined women entrepreneurs as an enterprise owned andcontrolled by a women having a minimum financial interest of 51% of thecapital and giving at least 51% of employment generated in the enterpriseto women. Like a male entrepreneurs a women entrepreneur has manyfunctions. They should explore the prospects of starting new enterprise;undertake risks, introduction of new innovations, coordinationadministration and control of business and providing effective leadershipin all aspects of business.

In the present section, we will review in more detail the specific obstaclesthat are posed to womens entrepreneurship when it comes to theentrepreneurial process itself.

This section is divided into four different parts: general obstacles towomen engaging in entrepreneurship (opportunity recognition andwillingness to start firms); specific obstacles to start-ups (assemblingnecessary information, financial and human resources to start a firm);specific obstacles to managing a small firm; and specific obstacles to

growing firms.The lack of role models in entrepreneurship. There exists a strongconnection between the presence of role models and the emergence ofentrepreneurs (Shapero & Sokol, 1982) and women as they historicallyhave not been present as entrepreneurs in general lack close role models.Role models are persons that by their attitudes, behaviours and actionsestablish the desirability and credibility of a choice (in this case becomingan entrepreneur) for an individual. An individual will be more influencedby another individual of the same sex, as ones aspirations and choicestend to be more influenced by persons of the same sex (Deaux &

Lafrance, 1998).

Lack of experience. All stages in entrepreneurship are dependent onrelevant experience, from the identification of opportunities to theexecution of running a business. Human capital theory posits thatindividuals with more or higher quality human capital achieve higherperformance in executing relevant tasks (Becker, 1975).women lack theexperience needed to identify and exploit opportunities.

Here, recent research on developed economies has identified a potentialproblem when it comes to womens entrepreneurship: highly educated

women seem to choose other career options than self-employment andentrepreneurship. Entrepreneurship is therefore relatively more

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dominated by unskilled women .If women are relatively less skilled thantheir male counterparts, then the firms they will create will have a lowerprobability of survival and growth than firms created by men.

Lack of relevant networks and of societal position. Women have in general

a lower social position than men, which affects the kind of networks theycan access or are part of. There is evidence to prove that women are lessinvolved in networks than men are, and their type of network is different.The strong and personal networks that women traditionally engage in arewell suited to purposes linked to the family related tasks that may proveto be a hindrance in the marketplace (Lin, 1999). Thus, women differ tomen in the kind of networks they use and in the social capital available tothem through the network. Women have therefore less access to criticalresources, support and information needed to successfully start andmanage a new firm compared to men.

Lack of wealth. A prerequisite for starting a firm is to have capital in termsof financial assets and in terms of relevant knowledge assets. Womensposition in society has led to a lack of assets in both these aspects. Theconstraints of family obligations make it harder for women to take on workon a full time basis and to engage in a career. This in turn decreases therange of possible work opportunities for women, leading to jobs in lowerpaid sectors. Being a part-time worker with low pay is not a good basis forcreating personal wealth.

For example both legal and cultural obstacles make it impossible or atleast very difficult for women to save enough money to start a firm orreinvest money into the growth of the firm, because at any moment amale family member (husband, brother, brother in-law) can confiscate theaccumulated capital for no other reason than that he is allowed to, andthere exists no protection for women in the respect (de Groot, 2001;Mayoux, 2001).

Competing demands on time. Another recurring obstacle for women toengage in entrepreneurship is the perceived lack of time or competingdemands on time. Because women are responsible for so many differentdomestic chores and the raising of children, they do not have enough free

time to develop either their entrepreneurial skills to becomeentrepreneurs or to develop an existing business. The lack of free timedoes not allow them time to travel to support institutions, banks and otherfinance houses for advice and information on credit, to attend trainingprogrammes to acquire skills, or to seek out better customers or suppliers.

The results suggest that lack of time is a barrier for most women, in mosteconomies, independent of the level of development. Women's familyobligations also bar them from becoming successful entrepreneurs in bothdeveloped and developing nations. "Having primary responsibility forchildren, home and older dependent family members, few women can

devote all their time and energies to their business" (Starcher, 1996, p.8).The financial institutions discourage women entrepreneurs on the belief

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that they can at any time leave their business and become housewivesagain. The result is that they are forced to rely on their own savings, andloan from relatives and family friends.

External finance and sex discrimination. In general, women have lower

personal financial assets than men. This means that for a givenopportunity and equally capable individual, women must secure additionalresources compared to men in order to exploit the opportunity becausethey control less capital.

Four areas have been identified as potential or real problems for womenwhen it comes to financing:

a) women may be disadvantaged in raising the initial capital to start anew firm;

b) collateral needed for external financing may be above the wealth levelof most women;

c) women entrepreneurs relationship with different financial institutionsmight suffer because ofgender stereotyping and discrimination (Carter etal., 2001; Storey, 1994).

d) finance for an existing firm may be less available, because women areless likely than men to penetrate informal financial networks;

The financial institutions are sceptical about the entrepreneurial abilities

of women. The bankers consider women as higher risk than men . Thebankers put unrealistic and unreasonable securities to get loan to womenentrepreneurs. According to a report by the United Nations IndustrialDevelopment Organization (UNIDO), "despite evidence that women's loanrepayment rates are higher than men's, women still face more difficultiesin obtaining credit," often due to discriminatory attitudes of banks andinformal lending groups (UNIDO, 1995b).

Results also indicate that women still perceive a negative attitude fromfinancial institutions such as banks and other lending institutions. Thisnegative attitude, it is argued, arises due to two possible reasons:

a) women are not viewed as entrepreneurs due to the attitudes formedby traditional gender roles;

b) women engage in industries that the financial institutions are not usedto handle (as personal services, care, etc.).

c) also in the personal networks and the family it is harder for women tofind financial resources to start a business.

d) especially in developing economies, women still have important

problems to obtain finance because of their weak social position, or that

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they are not even allowed to seek finance as individuals and thathusbands or brothers must seek it in their place instead (Mayoux, 2001).

The male - female competition is another factor, which develop hurdles towomen entrepreneurs in the business management process. Despite the

fact that women entrepreneurs are good in keeping their service promptand delivery in time, due to lack of organisational skills compared to maleentrepreneurs women have to face constraints from competition. Theconfidence to travel across day and night and even different regions andstates are less found in women compared to male entrepreneurs. Thisshows the low level freedom of expression and freedom of mobility of thewomen entrepreneurs.

Low-level risk taking attitude is another factor affecting women folkdecision to get into business. Low-level education provides low-level self-confidence and self-reliance to the women folk to engage in business,

which is continuous risk taking and strategic cession making profession.Investing money, maintaining the operations and ploughing back moneyfor surplus generation requires high risk taking attitude, courage andconfidence. Though the risk tolerance ability of the women folk in day-to-day life is high compared to male members, while in business it is foundopposite to that.

Knowledge of alternative source of raw materials availability and highnegotiation skills are the basic requirement to run a business. Getting theraw materials from different souse with discount prices is the factor thatdetermines the profit margin. Lack of knowledge of availability of the rawmaterials and low-level negotiation and bargaining skills are the factors,which affect women entrepreneur's business adventures.

Knowledge of latest technological changes, know how, and education levelof the person are significant factor that affect business. Many women indeveloping nations lack the education needed to spur successfulentrepreneurship. They are ignorant of new technologies or unskilled intheir use, and often unable to do research and gain the necessary training(UNIDO, 1995b, p.1). Although great advances are being made intechnology, many women's illiteracy, structural difficulties, and lack of

access to technical training prevent the technology from being beneficialor even available to females ("Women Entrepreneurs in PoorestCountries," 2001). This lack of knowledge and the continuing treatment ofwomen as second-class citizens keeps them in a pervasive cycle ofpoverty ("The Female Poverty Trap," 2001). The studies indicates thatuneducated women do not have the knowledge of measurement andbasic accounting.

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Model Answer to Assignment m Ed 2