Arm's‐length or give‐and‐take? Gender differences in the relational orientation of new ventures in Sub‐Saharan Africa

• DOI: http://doi.org/10.1002/sej.1301
• Date: 01 December 2018
• Author: Ikenna Uzuegbunam,Anthonia O. Uzuegbunam
• Published date: 01 December 2018

RESEARCH ARTICLE

Arm's-length or give-and-take? Gender differences

in the relational orientation of new ventures in

Sub-Saharan Africa

Anthonia O. Uzuegbunam

1

| Ikenna Uzuegbunam

2

1

Department of Public Administration,

University of Nigeria, Nsukka, Nigeria

2

Department of Management & Center for

Entrepreneurship, College of Business, Ohio

University, Athens, Ohio

Correspondence

Ikenna Uzuegbunam, Department of

Management & Center for Entrepreneurship,

College of Business –Copeland Hall, 71 S.

Court Street, Ohio University, Athens, OH

45701.

Email: ikennauzuegbunam@gmail.com

Research Summary:Women entrepreneurs in emerging economies

face significant constraints in operating their businesses. Leverag-

ing two samples of new ventures in Nigeria and Ghana, we explore

gender differences in the relational orientation of entrepreneurs in

their market interactions with customers. We observe that female

entrepreneurs are more likely than their male counterparts to apply

a relational approach in the receipt of payments for goods and ser-

vices and in the structure of purchase contracts. These stylized

findings are considered against the backdrop of existing literature

and offer insight into the ways women entrepreneurs approach

transactions with customers, especially in the context of emerging

market ventures in Sub-Saharan Africa.

Managerial Summary:Women entrepreneurs in emerging econo-

mies are confronted by significant resource challenges. But women

entrepreneurs could also have an advantage in customer relation-

ships. Our study uncovers two types of relational mechanisms that

women entrepreneurs in emerging economies utilize in their

engagement with customers. First, we find that female entrepre-

neurs are more likely than their male counterparts to utilize rela-

tional payments, in the form of prepayments or post payments

from their customers. Second, female entrepreneurs are more likely

to utilize relational contracts, in the form of unwitnessed oral pur-

chase contracts with customers. Our study highlights the virtue of

incorporating relational mechanisms in policies and practices aimed

at fostering female entrepreneurship in emerging economies.

KEYWORDS

contract choice, gender, relational orientation, sub-Saharan

Africa, venture financing

Received: 1 August 2012 Revised: 13 March 2018 Accepted: 2 July 2018 Published on: 11 September 2018

DOI: 10.1002/sej.1301

522 © 2018 Strategic Management Society wileyonlinelibrary.com/journal/sej Strategic Entrepreneurship Journal. 2018;12:522–541.

1|INTRODUCTION

“…the best money you can possibly get, much better than venture capital, is actual customers paid you to

write the product.”Heidi Roizen, venture capitalist & software entrepreneur (2002)

The study of gender in the entrepreneurship context has revealed that women are disadvantaged in markets for

entrepreneurial resources (e.g., Bigelow, Lundmark, Parks, & Wuebker, 2014; Coleman & Robb, 2009; Cooper,

Gimeno-Gascon, & Woo, 1994; Fairlie & Robb, 2009).

1

One cited reason for this gender disparity is that women tend

to have narrower networks than their male colleagues (Ding, Murray, & Stuart, 2006; Renzulli, Aldrich, & Moody,

2000). According to this perspective, women frequently face exclusionary pressures or biases from resourceful net-

works because they are often a minority in these environments (Coleman & Robb, 2009; Kanze, Huang, Conley, &

Higgins, 2018).

2

Yet, other scholars have reasoned that these gender disparities are on account of differences in busi-

ness choices/strategies between female and male entrepreneurs, which could help explain observed differences in

outcomes between female- and male-run ventures (e.g. Cliff, 1998). In this latter stream of work, scholars suggest

that female entrepreneurs exhibit a higher tendency than their male counterparts toward nonpecuniary goals leading

to significant differences in new venture outcomes (e.g., Justo, DeTienne, & Sieger, 2015).

Regardless of the reasons for these gender differences, the gender gap in markets for entrepreneurial resources

has implications for the performance of women entrepreneurs in terms of new venture survival, product develop-

ment, and growth (Coleman & Robb, 2009; Cooper et al., 1994; Justo et al., 2015; Robb & Robinson, 2014). For

instance, Fairlie and Robb (2009) found that differences in venture financing accounted for a large portion of the

gender gap in several new venture outcomes (about 9.8 to 44.7%). Though previous research has provided insights

into the reasons for and implications of the gender gap in formal markets for entrepreneurial finance, it also raises

the question of how women entrepreneurs operate their new ventures under these imperfect conditions. In particu-

lar, understanding how women operationalize relational practices in their new ventures is an important area for fur-

ther inquiry, which is likely to yield fresh insights for the literature (Buttner, 2001).

To better understand this question, we examine two surveys of new ventures from Nigeria and Ghana. Specifi-

cally, we explore gender differences in relational orientation between new ventures and their customers in these two

emerging economies in Sub-Saharan Africa. Relational orientation is the emphasis that one places on “connectedness

to others”that leads one to behave in ways that promote and strengthen existing relationships (Cron, Gilly, Graham, &

Slocum, 2009). As highlighted by the opening quote and by prior literature, relational resources such as customer

relationships can be important to new ventures because they provide an avenue for evaluating customer needs,

accessing customers' social capital and endorsements (Delmar & Shane, 2004), and mobilizing working capital. Thus,

examining the characteristics of customer relationships is important because of their potential to yield resources for

new ventures.

Our study contributes to existing research on gender perspectives in entrepreneurship (e.g., Brush, 1992; Cliff,

1998; Cooper et al., 1994; Cron et al., 2009; Ding, Murray, & Stuart, 2013; Fairlie & Robb, 2009; Kanze et al., 2018)

by operationalizing and describing the two important relational mechanisms that women entrepreneurs utilize in their

customer interactions: relational payments and relational contracts. Our stylized findings show that female entrepre-

neurs are more likely than male entrepreneurs to utilize these relational mechanisms. Though we were unable to rule

1

Recent research, however, has shown that crowdfunding is helping alleviate this gender disparity in new venture financing. Using

data from April 2009 to March 2012, Marom, Robb, and Sade (2016) showed that projects led by women were more likely to reach

their funding goals (80%) compared to men (74%) on Kickstater.com, a major crowdfunding platform. We are grateful to an anony-

mous reviewer for highlighting this notable exception.

2

In fact, these effects also pertain to other minorities (e.g., racial minorities) in work environments, suggesting that being a minority in

certain work environments is often associated with being “at the margins”of critical networks (Mehra, Kilduff, & Brass, 1998; West-

phal & Stern, 2007). One of the benefits of our Nigerian research setting is that it allows us to focus more precisely on gender differ-

ences without the conflating influence of racial differences (their theoretical and practical importance notwithstanding).

UZUEGBUNAM AND UZUEGBUNAM 523