Copyright is owned by the Author of the thesis. Permission is given for a copy to be downloaded by an individual for the purpose of research and private study only. The thesis may not be reproduced elsewhere without the permission of the Author. Entrepreneurial Assistance Across the Ocean An Examination of the Effectiveness of International Mentoring as a Support Service for Entrepreneurs in Samoa A thesis presented in partial fulfilment of the requirements for the Degree of Master of Philosophy in Development Studies at Massey University, Palmerston North, New Zealand Gisela Purcell 2013 ii ABSTRACT Indigenous entrepreneurs play an important role in the economic growth of developing countries but to be sustainable they must balance their business needs with the cultural norms of the local context. Donor countries are increasingly supporting the private sector through business mentoring, however the challenges facing indigenous entrepreneurs are quite different to those experienced by their mentors. This research investigates the value of donor-funded, cross-cultural mentoring through an examination of the Pacific Business Mentoring Programme, a New Zealand initiative in Samoa. Based on an extensive literature review, this thesis develops a framework to assess the value of a mentoring programme. Semi-structured interviews with 23 entrepreneurs in Samoa reveal their positive and negative experiences with the programme. An online survey of the New Zealand mentors who had worked in Samoa provides further data regarding the perceived strengths and weaknesses of the programme. This information is evaluated against the mentoring framework to assess what worked well and what areas could be improved. Research findings show that mentoring can provide both business and socio-cultural development outcomes, however economic improvements can be very difficult to attribute directly to a mentoring programme. Several cited benefits of the mentoring programme, such as providing a neutral sounding board and challenging the entrepreneur’s assumptions, are difficult to quantify. The majority of entrepreneurs believe that their mentor did not have a good understanding of the local cultural context. Where a mentor’s advice conflicted with their cultural practices, the entrepreneur would usually ignore or adapt the advice to reach a compromise. Some cultural practices appear to be detrimental to running a business, however many of these practices add to the resilience of local people as well as having a social function, and should therefore not be undermined. This thesis concludes that donor-funded business mentoring is a versatile, effective tool for development assistance if mentors are sensitive to the unique challenges of the local context and do not underestimate the abilities of the local entrepreneurs. With careful selection, training and support, mentoring can support indigenous entrepreneurs to improve their business skills while retaining their cultural identity. iii ACKNOWLEDGEMENTS Studying extramurally can feel like a long and lonely task at times but of course, it has only been possible to complete this thesis with the support of many people. My supervisors, Regina and Glenn have always been just a phone call or email away and their constructive criticisms have been hugely helpful. Financial support received from Massey University and MFAT was gratefully received and meant I could enjoy the privilege of studying fulltime. My family has been incredibly understanding as I spent day after sunny day glued to my computer. Extra special thanks must go to my Dad who carefully proof read this thesis during the last weeks of his life. His attention to detail was outstanding. Of course I could only write this thesis with the input from the entrepreneurs in Samoa and the New Zealand mentors. It was an honour that so many extremely busy people generously gave up their time to meet with me. I have done my best to represent their opinions honestly and fairly. I definitely struck it lucky by finding the perfect research assistant. Pearl was forever patient and persistent; offering her own pearls of wisdom to guide me through the many interviews in Samoa. My hosts in Samoa at Taumesina Hideaway provided the perfect student accommodation offering much more assistance and good times than I could ever have expected. Everyone I met while cycling around Samoa’s beautiful islands added to my knowledge and understanding. How lucky was I to carry out fieldwork in such an idyllic corner of the planet! I am sincerely grateful for all the support I have received. Fa'afetai tele lava! iv TABLE OF CONTENTS Abstract .............................................................................................................................. ii Acknowledgements .......................................................................................................................... iii Table of Contents ............................................................................................................................. iv List of Figures, Tables and Case Studies ........................................................................................... vi List of Abbreviations ........................................................................................................................ vii Glossary of Samoan Terms ............................................................................................................. viii 1. Introduction ........................................................................................................................ 1 1.1 Introduction ...................................................................................................................... 1 1.2 Significance and Rationale ............................................................................................... 2 1.3 Research Aim and Research Questions ............................................................................ 3 1.4 Motivation of the Researcher ........................................................................................... 3 1.5 Outline of the Thesis ......................................................................................................... 5 1.6 Summary .......................................................................................................................... 6 2. Mentoring and Entrepreneurship ........................................................................................ 8 2.1 Introduction ...................................................................................................................... 8 2.2 Mentoring for Entrepreneurs ........................................................................................... 9 2.3 Cross-Cultural Communication in the Work Environment .............................................. 16 2.4 Examples of International Mentoring Programmes ....................................................... 17 2.5 Conclusion ...................................................................................................................... 24 3. Indigenous Entrepreneurship ............................................................................................ 26 3.1 Introduction .................................................................................................................... 26 3.2 Indigenous Entrepreneurship: Definitions and Values .................................................... 27 3.3 Small Business in the Pacific Islands ............................................................................... 32 3.4 Development Assistance and the Private Sector ............................................................ 37 3.5 Conclusion ...................................................................................................................... 40 4. Business, Culture and Livelihoods in Samoa ...................................................................... 41 4.1 Introduction .................................................................................................................... 41 4.2 The Macro Economic Context ......................................................................................... 42 4.3 The Influence of fa’a Samoa ........................................................................................... 44 4.4 Modern Livelihoods in Samoa ........................................................................................ 47 4.5 Business Support Services in Samoa ............................................................................... 49 4.6 Conclusion ...................................................................................................................... 52 5. Methodology .................................................................................................................... 53 5.1 Introduction .................................................................................................................... 53 5.2 Methodological Approach .............................................................................................. 54 5.3 Positionality .................................................................................................................... 56 5.4 Ethical Considerations .................................................................................................... 57 5.5 Data Collection ............................................................................................................... 59 5.6 Data Analysis .................................................................................................................. 65 5.7 Limitations of this Research ........................................................................................... 66 5.8 Conclusion ...................................................................................................................... 67 v 6. The Effectiveness of the Pacific Business Mentoring Programme ...................................... 68 6.1 Introduction .................................................................................................................... 68 6.2 Inputs – the Mentor, the Mentee and their Relationship ............................................... 71 6.3 Outcomes – Business and Personal Development .......................................................... 84 6.4 Success Factors ............................................................................................................... 93 6.5 Conclusion ...................................................................................................................... 94 7. Balancing Business Demands with Cultural Expectations .................................................. 95 7.1 Introduction .................................................................................................................... 95 7.2 Communal Obligations in Samoan Society ..................................................................... 97 7.3 Competitive Nature of Samoan Culture........................................................................ 103 7.4 Staff Issues .................................................................................................................... 104 7.5 Diversification of Business Interests ............................................................................. 105 7.6 Conclusion .................................................................................................................... 106 8. Conclusion and Recommendations ................................................................................. 107 8.1 Introduction .................................................................................................................. 107 8.2 The Value of International Mentoring .......................................................................... 108 8.3 Suggested Improvements to the PBMP ........................................................................ 113 8.4 Concluding Comments .................................................................................................. 117 Appendix 1: Low Risk Notification ......................................................................................... 119 Appendix 2: Information Sheet for Samoan Entrepreneurs .................................................. 120 Appendix 3: Consent Form for Samoan Entrepreneurs ......................................................... 122 Appendix 4: Question Guide for interviews with Samoan Entrepreneurs ............................. 123 Appendix 5: Survey for Samoan Entrepreneurs ..................................................................... 126 Appendix 6: Online Survey of New Zealand Mentors ............................................................ 127 References .......................................................................................................................... 131 vi LIST OF FIGURES, TABLES AND CASE STUDIES Figures Figure 1 A Framework to Evaluate an International Mentoring Programme with Academic References ....................................................................................................................................... 14 Figure 2 A Framework to Evaluate an International Mentoring Programme: Summary ............. 15 Figure 3 Map of Samoa (www.vidiani.com Maps of the World 2013) ......................................... 42 Figure 4 Mentor Responses - What are the Benefits of Mentoring for Samoan Entrepreneurs? 69 Figure 5 Mentee Responses to the Pacific Business Mentoring Programme ............................... 70 Figure 6 The Mentoring Evaluation Framework: Inputs into the Mentoring Programme ........... 71 Figure 7 Mentor Responses - What Skills are Required by a Business Mentor? .......................... 72 Figure 8 Mentee Response: The Mentors’ had a Good Understanding of the Local Context ...... 76 Figure 9 The Frequency and Duration of Meetings ...................................................................... 82 Figure 10 Communication when Apart .......................................................................................... 83 Figure 11 The Mentoring Evaluation Framework: Outcomes from the Mentoring Programme ... 84 Figure 12 Changes Made to the Business due to Mentoring ......................................................... 86 Figure 13 Was the Mentor was a Good Sounding Board? ............................................................. 89 Figure 14 Did the Mentee Increased their Self-Confidence Due to Mentoring?............................ 91 Figure 15 Did the Mentee Gain Improved Business Skills Due to Mentoring? .............................. 92 Figure 16 Did the Mentee Gain New Contacts Due to Mentoring? ............................................... 92 Figure 17 The Mentoring Evaluation Framework: Success Factors ............................................... 93 Tables Table 1 Changes Made to the Business Due to Mentoring .......................................................... 87 Table 2 Recommendations to Improve the PBMP at an Operational Level ................................ 115 Case Studies Case Study 1 Le Alaimoana Hotel .................................................................................................. 79 Case Study 2 Misiluki Day Spa & Coffee Bean Cafes ..................................................................... 80 Case Study 3 Tisaan Graphic Design ............................................................................................. 81 Case Study 4 Talanoa Fales ............................................................................................................ 96 Case Study 5 Samoa Realty ......................................................................................................... 102 file:///C:/Users/gisel_000/Documents/1.%20GISELA/Development%20studies/Thesis/thesis%20full%20drafts/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380232799 file:///C:/Users/gisel_000/Documents/1.%20GISELA/Development%20studies/Thesis/thesis%20full%20drafts/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380232799 file:///C:/Users/gisel_000/Documents/1.%20GISELA/Development%20studies/Thesis/thesis%20full%20drafts/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380232800 file:///C:/Users/gisel_000/Documents/1.%20GISELA/Development%20studies/Thesis/thesis%20full%20drafts/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380232802 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file:///C:/Users/gisel_000/Documents/1.%20GISELA/Development%20studies/Thesis/thesis%20full%20drafts/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380232815 file:///C:/Users/gisel_000/Desktop/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380316732 file:///C:/Users/gisel_000/Desktop/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380316736 file:///C:/Users/gisel_000/Desktop/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380316737 file:///C:/Users/gisel_000/Desktop/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380316738 file:///C:/Users/gisel_000/Desktop/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380316739 file:///C:/Users/gisel_000/Desktop/G%20Purcell%20THESIS%2015%20Feb.docx%23_Toc380316740 vii LIST OF ABBREVIATIONS ADB Asian Development Bank BAS Business Advisory Service CESES Confederation of European Senior Expert Services EBRD European Bank for Restructuring and Development GDP Gross Domestic Product KPIs Key Performance Indicators LDC Least Developed Country MDGs Millennium Development Goals MFAT New Zealand Ministry of Foreign Affairs and Trade OECD Organisation for Economic Cooperation and Development PBMP Pacific Business Mentoring Programme PIPSO Pacific Island Private Sector Organisation PLP Pacific Leadership Programme PNG Papua New Guinea PSD Private Sector Development PUM Netherlands Senior Experts SAT$ Samoan Tala SES German Senior Export Service SBS Samoan Bureau of Statistics SDS Strategy for the Development of Samoa SHA Samoa Hotel Association TAM Turn Around Management Group USAID United States Agency for International Development UK DFID United Kingdom Department for International Development UNDP United Nations Development Programme UNECE United Nations Economic Commission for Europe WIBDI Women in Business Development Incorporated viii GLOSSARY OF SAMOAN TERMS Aiga Extended family Aumaga Council of untitled men Fa’a lavelave A significant social event such as a wedding or a funeral Fa’a Samoa The Samoan way of life Fono The council of matai found in each village Komiti Village committee Komiti Tumama Women’s committee Matai Family chief Nu’u Village Palagi European person / Pakeha Pule Status Tautua Service (e.g. children to parents or villagers to their church) 1 1. INTRODUCTION “We might live in Samoa but we are not third world thinkers. We are busy – we are not sitting under the coconut trees twiddling our thumbs.” Retailer, Upolu 1.1 INTRODUCTION The growth of businesses run by indigenous entrepreneurs is widely recognized as playing a key role in the development of Pacific Island countries (Hailey, 1987). Mentoring new entrepreneurs is a well-accepted means to support their growth and avoid costly errors (Cull, 2006). It thus seems to be a logical step to bring these two concepts together, utilizing mentoring to support entrepreneurs in developing countries. However, indigenous entrepreneurs have a unique set of challenges and must balance contemporary business principles with their cultural norms (Hailey, 1987). Mentors need to be aware that a failure to reach this balance will often mean the failure of the business (Saffu, 2003). The ‘Pacific Business Mentoring Programme’, established in 2010 and funded by the New Zealand Aid Programme, matches New Zealand volunteer mentors with Pacific Island business owners, to share their business acumen and experience. The programme focusses on creating wealth and employment, increasing business growth and efficiency, and building sustainability (Atkinson, 2012). However, the aspirations and challenges facing small business owners in Samoa may be quite different to those of New Zealand business owners. This thesis will examine the effectiveness of the Pacific Business Mentoring 2 Programme for entrepreneurs in Samoa, providing evidence to support the use of international mentoring is a means of support for entrepreneurs in a developing country. 1.2 SIGNIFICANCE AND RATIONALE While mentoring and indigenous entrepreneurship have both been studied extensively, my research was not able to identify any academic research which united these two fields. Cross-cultural mentoring is an area which has received only very limited academic study, despite that fact that increasing numbers of organisations are utilizing this as a means of support for entrepreneurs in developing countries. It cannot be assumed that running a business is the same in all countries, and mentors need to be aware of the differences between doing business in their own country and in the country they are assisting. This thesis aims to fill this gap in academic research through focusing on the Pacific Business Mentoring Programme (PBMP) in Samoa. It will explore how society and culture influence and impact on businesses in this Pacific Island country and whether mentoring is an appropriate means of support for entrepreneurs in Samoa. Much literature notes that mentoring is very difficult to measure objectively (Barrett, 2006; Megginson, 2000; Noe, 1988; Petridou, 2009; St Jean & Audet, 2013). The cited benefits of mentoring emphasize quite subjective developments of the entrepreneur’s character over more objective economic indicators. It is important that such benefits are not ignored simply because they are difficult to evaluate. For example, it may be difficult to measure the value to an entrepreneur of having a ‘neutral sounding board’, but it is, nonetheless, a regularly cited benefit of mentoring (Barrett, 2006; Kent, Dennis, & Tanton, 2003; Pompa, 2012; Sarri, 2011). Through an extensive literature review of both mentoring and indigenous entrepreneurship, a framework will be formulated which can be applied to assess the inputs and outputs of a cross-cultural mentoring programme. The PBMP has received very positive feedback in its own surveys (Business Mentors New Zealand, 2013). However these surveys focused primarily on economic outcomes and responses may have been influenced by the local cultural reluctance to voice any negative concerns. In this thesis feedback from both mentors and mentees will be evaluated in order to assess the value of mentoring beyond economic changes to the business. Given the increased use of mentoring by experts from developed countries to assist entrepreneurs in 3 developing countries, it is timely that this is evaluated from a broad understanding of the social and cultural challenges faced while running a business. 1.3 RESEARCH AIM AND RESEARCH QUESTIONS The aim of this research is to examine the effectiveness of donor-funded, international mentoring as a support service for indigenous entrepreneurs in Samoa. In conducting this research three initial questions need to be answered: 1. How can the effectiveness of international business mentoring be evaluated? 2. Do Samoan entrepreneurs perceive that their mentors have provided useful advice which they have been able to implement to improve their businesses? 3. Does advice provided by mentors help entrepreneurs to balance cultural expectations with economic demands? Together the results of these three questions will provide the background information required to answer the fourth and overarching research question: 4. Is donor-funded, international mentoring a suitable means of support for entrepreneurs in a developing country? 1.4 MOTIVATION OF THE RESEARCHER This field of research draws on a range of my own personal, academic and work experiences. My academic career began over twenty years ago with an honours degree in Political Studies and German Literature. This combination provided a useful background for the work I pursued at New Zealand Trade and Enterprise where I supported New Zealand businesses to develop their export markets. I first visited developing countries when I was employed as the international team leader at a tertiary institute and my mandate was to recruit international students to study in New Zealand. I spent many hours talking with 4 relatively wealthy parents in developing countries who were keen to help their children get a step ahead. However I could not help but be aware of the less-privileged people in these countries for whom even acquiring a local education was a dream. For over a decade I also ran my own franchised business, teaching languages to children in both New Zealand and Australia. During this time I received mentoring support and I also acted as a mentor to my franchisees. Due to the nature of this business, my franchisees were from a variety of countries and I experienced first-hand, how their cultural background influenced their motivations and expectations. Furthermore I have recently been involved with the Wakatu Incorporation, a group of businesses owned by Maori in New Zealand. The 3000 indigenous shareholders strive to run their company in a uniquely Maori way within the context of New Zealand’s free market economy. These varied work experiences culminated in studying for a Post Graduate Diploma in Development Studies which broadened and deepened my understanding of the challenges faced by those trying to implement development programmes. This thesis draws on my past experiences working with people from a variety of cultures, working with entrepreneurs and running my own business. My work experiences are coupled with an awareness that development programmes will be more sustainable if they are driven by the ‘recipients’ who are aware of their own priorities (Curry, 2003). A research topic which combined small business with development support felt like a natural extension of my personal experiences and interests. Samoa was selected partly for selfish reasons as it is a country I had visited as a tourist and felt at ease in. As country about to graduate from its “Least Developed Country”1 status, the private sector has been recognised as a core component of the economy (Samoa Bureau of Statistics & UNDP Pacific Centre, 2010; So'o, Va'a, & Lafotanoa, 2006), and is valued by their own government. Having been involved with the Pacific Business Mentoring Programme since its inception in 2010, Samoa provided the ideal research base for this investigation. I hope that the outcomes of the research will, in a small way, have a positive impact on the way in which this and other similar programmes are run, so that entrepreneurs can thrive 1 The Least Development Countries are the 48 poorest and weakest countries in the international community. The category of LDCs was officially established in 1971 by the UN General Assembly in order to attract special international support for them. They comprise about 12% of the world population but account for about 1% of global trade (UN-OHRLLS, 2014). 5 and develop while maintaining their rich and varied culture as the backbone of their society. 1.5 OUTLINE OF THE THESIS This thesis begins with an introduction to set the scene. This chapter outlines the rationale for this thesis topic and clarifies the aim and research questions. Indigenous entrepreneurship, entrepreneurial mentoring, and the business environment in Samoa are introduced. The researcher’s motivations for investigating this topic are also explained. Chapter Two provides a review of literature regarding mentoring and entrepreneurship. It discusses the features of a successful mentoring relationship and looks at cross-cultural communication in the workplace. From this literature review a framework is formulated to evaluate mentoring programmes, to help answer the first question: How can the effectiveness of international business mentoring be evaluated? A discussion of some examples of international mentoring is provided and the Pacific Business Mentoring Programme is introduced. Chapter Three reviews the literature about indigenous entrepreneurship and socially embedded economies. It investigates the challenges and opportunities for entrepreneurs in the Pacific Islands before concluding with a critical reflection of the current practice in development aid to focus on the private sector. Chapter Four provides an overview of business, culture and livelihoods in Samoa. It looks at the macro-economic context of Samoa and the impact of foreign aid and other business support services. The influence of fa’a Samoa (the Samoan way of life) on local businesses is described, followed by a discussion of business support services available to entrepreneurs in Samoa. Chapter Five discusses the methodological approach used to investigate this research topic. The positionality of the researcher is considered as are the ethical issues involved with this project. Further detail is provided regarding the data collection methods and the data analysis. The limitations of this research are also described. Chapter Six gives an overview of the findings from the fieldwork, both the interviews with the Samoan mentees and the survey of the New Zealand mentors. These findings are discussed relative to the framework described earlier in the thesis. This chapter answers 6 the second research question: Do Samoan entrepreneurs perceive that their mentors have provided useful advice which they have been able to implement to improve their businesses? Chapter Seven discusses the final feature of the cross-culture mentoring framework, namely whether mentoring helps Samoan entrepreneurs to balance their businesses with their local cultural norms. Given that this is an essential component of having a sustainable business, achieving a balance should be a high priority of the mentoring programme. This chapter answers the third research question: Does advice provided by mentors help entrepreneurs to balance cultural expectations with economic demands? Chapter Eight concludes this thesis with a discussion about the suitability of mentoring as a means to support entrepreneurs in a developing country. Recommendations to improve the effectiveness of the PBMP in Samoa are also made. This culminates in answering the fourth and final research question: Is donor-funded, international mentoring a suitable means of support for entrepreneurs in a developing country? 1.6 SUMMARY As support for developing countries is increasingly focused on the private sector, it is timely to evaluate the effectiveness of this approach. This thesis will evaluate one form of private sector support, namely New Zealand volunteer mentors advising entrepreneurs in Samoa through the Pacific Business Mentoring Programme (PBMP). Measuring the value of mentoring is fraught with difficulties as many outcomes involve the long term, personal growth of the entrepreneurs themselves. Mentoring is not only about improving economic indicators of a business, but it has the potential to challenge attitudes and create whole new ways of thinking about business. Mentoring has the potential to provide individualized guidance to an entrepreneur, helping them to avoid costly mistakes as they grow their business. However, given the lack of research into international mentoring, it is unknown how indigenous entrepreneurs can assimilate the mentoring advice with their own culture. International donor-funded mentoring brings two sets of values together – that of the experienced mentor with that of the entrepreneur in a developing country. This can create tension but “when cultures interact, new dynamics emerge” (Morrinson, 2008, p. 249). The goal of international mentoring should be to bring two cultures together, so that the entrepreneurs can create their own way of doing business specific to their local context. It 7 has been shown that the ability to balance contemporary business practice with cultural practices is vital to the success of a business (Cahn, 2008; Hailey, 1987; Saffu, 2003; Shadrake, 1996). This thesis will demonstrate that international mentoring is an effective support service for entrepreneurs in Samoa but it is not without some weaknesses. Recommendations to fine tune this programme will be made, so that mentoring can become a valuable tool to support entrepreneurs in developing countries and in Samoa in particular. 8 2. MENTORING AND ENTREPRENEURSHIP 2.1 INTRODUCTION The passing of knowledge from those who have it to those who need it is a principle as old as humankind itself. The term “mentor” was first used in Homer’s Odyssey. When Odysseus went on a ten year voyage, he appointed a guardian for his son to act as a teacher, adviser and friend. The guardian’s name was Mentor (Homère as cited in St Jean & Audet, 2012, p. 122). Informal mentoring in the workplace has occurred without being labeled as such for centuries. It is widely expected that experienced staff support and guide newcomers. Formalised mentoring in the corporate workplace became a widespread practice in the last century (Kram, 1985) and more recently, in the last fifty years or so, mentoring has been extended to support entrepreneurs establishing their own private businesses (Cull, 2006; Sullivan, 2000; Waters & Birrell, 2007). While mentoring in the workplace has been the subject of vast amounts of academic research in the last thirty years, entrepreneurial mentoring has only become a topic of academic interest since the late 1990s. In this literature review I will focus primarily on the mentoring of entrepreneurs, while drawing on the knowledge of corporate mentoring where relevant. In order to assess how mentoring can be used effectively for indigenous entrepreneurs in Samoa, I will briefly look at the various definitions of mentoring, the features required for a successful mentoring experience and the potential outcomes for 9 entrepreneurs. This provides the basis for a framework to review a mentoring programme based on inputs and outputs as presented in a range of academic literature. I will review the small body of literature which touches on cross-cultural mentoring, before looking at international mentoring programmes run in various countries. 2.2 MENTORING FOR ENTREPRENEURS While mentoring has been practised since ancient times, academic literature about mentoring did not appear until the early 1980s. Kram’s 1983 Academy of Management Journal article (1983), followed by her oft-cited text “Mentoring at Work” (Kram, 1985), were the first texts to analyse in depth the outcomes of mentoring in the workplace. This has since been followed up by a vast number of texts looking at the roles of mentors within corporate and public sector organisations (Carraher, Sullivan, & Crocitto, 2008; Clutterbuck, 2002; Clutterbuck & Ragins, 2002; Gilbert & Cartwright, 2008; Kram & Ragins, 2008; Noe, 1988; Ragins & Scandura, 1994). There has been a lot less written about the mentoring of entrepreneurs, where the mentor is external to the business, although since Deakins, Graham and Sullivan’s (1998) publication of “New Venture Support”, research of this field has increased exponentially (Bisk, 2002; Cull, 2006; Perren, 2003; St Jean, 2011; St Jean & Audet, 2012; Sullivan, 2000; Waters & Birrell, 2007). The general agreement amongst these authors is that mentoring entrepreneurs can provide them with personalized, flexible support tailored to their particular situation, which will increase their chances of long term success. “A mentor’s many years of experience can save a business from major errors and costly mistakes” (Cull, 2006, p. 9). 2.2.1 DEFINITIONS Kram (1983, as cited in Kram & Ragins, 2008, p. 5) initially defined mentoring as “a relationship between an older, more experienced mentor and a younger, less experienced protégé for the purpose of helping and developing the protégé’s career”. This definition has been expanded on by many, without departing radically from the early version. Bozeman and Feeney (2008, p. 468) have helpfully collated various definitions of mentoring in order to make comparison much easier. Their own definition of mentoring is “a process for the reciprocal, informal transmission of knowledge, social capital and psycho-social 10 support perceived by the recipient as relevant to work, career, or professional development” (p.469). In an entrepreneurial context the definition has been refined to “a support relationship between an experienced entrepreneur (the mentor), and a novice entrepreneur (the mentee), in order to foster the latter’s personal development” (St Jean & Audet, 2012, p. 122). It is noteworthy that the emphasis has shifted from career development to personal development, although it had earlier been argued that that there is also a place for professional development within entrepreneurial mentoring (Cull, 2006). A mentoring relationship may be formally organized by an external organization or an informal evolution of personal relationships. Historically, the latter has been far more common. 2.2.2 FEATURES REQUIRED FOR SUCCESSFUL MENTORING For a mentoring programme to be successful, certain skills and traits are required by both the mentors and the mentees. This is a two way relationship, and both sides need to participate fully in order to reach the successful outcomes discussed above. Deakins et. al. (1998) suggest that for maximum benefit, the mentors should be entrepreneurs themselves, but that they require careful selection, training and monitoring. Poorly trained mentors can lead to a lot of time being wasted, having a damaging effect on all involved – the mentors, mentees and the organisations (Kent et al., 2003). In my experience good listening and interpersonal skills are more important than academic qualifications to being a good mentor. Bisk (2002) hypothesized that the mentors did not have to be experts in the field of their mentees’ enterprise in order to be of assistance. On the other hand, in his qualitative study of the Canadian Youth Business Foundation, Cull (2006) found that it was important to have some knowledge of the mentee’s business, in order to have enough insight to develop a good rapport with them. Successful mentoring requires a good personal match between the mentor and mentee. Where they have differing values, aims and visions for the business the relationship is unlikely to be successful (Cull, 2006). This reiterates the findings of Morrison and Bergin- Seers, in their study of over 400 small business owners in Melbourne which noted that learning interventions are required to be “sensitive and attuned to the contextual factors” (2002, p. 391) of the enterprise, and information presented should be congruent with the core beliefs of the business owner. They suggest that a partnership approach be adopted, with support customized to the local context and environment. It is also pointed out that 11 mentors should adjust their approach to suit the “culture, communication models and learning style” (St-Jean, Audet, Couteret, & et des Administrations Gestion des Entreprises, n.d., p. 6) of their mentee. These factors are especially relevant for cross-cultural mentoring where the mentor and mentee have very different backgrounds. Of course, a successful relationship requires input from the mentee as well. A mentee who is open to feedback, articulate, willing to make changes, aware of their own weaknesses and having realistic expectations of how much their mentor can do, will generally have a more positive experience (St. Jean & Audet 2012). Mutual trust is vital to enhance both the quality and efficiency of the mentoring relationship (St-Jean et al., n.d., p. 7). Building a partnership-based relationship can take considerable time. Indeed it has been claimed that time is a critical factor in a successful mentoring relationship (Barrerra Associates, 2003 as cited in Cull, 2006; Kent, Dennis and Tanton, 2003), although just how long is required will vary in each case. Kram (1985) suggests that maximum benefit will be gained after two to five years. Frequent contact, especially in the early stages is important to the long-term success of the relationship (Waters, McCabe, Kiellerup, & Kiellerup, 2002). While face-to face mentoring is the ideal, with simple technology mentoring over larger distances is quite possible. Where both parties are comfortable with it, e-mentoring (email and Skype) can provide a low-cost, flexible approach to providing support to a new entrepreneur (Perren, 2003), although it is advised that this supplements, rather than replaces, face to face meetings (St-Jean & Audet, 2012). In a study of small business owners in New Zealand, (McGregor & Tweed, 2002) it was found that women expressed a stronger desire for a mentor than did their male counterparts. Women were more likely to seek advice from more experienced business owners when establishing their own business. As a result they found that 25.8% of female business owners had a mentor, compared with 19.9% of male business owners (p.432). It has also been found that on the whole, men are “generally less satisfied” (St-Jean et al., n.d., p. 4) than women with their mentoring relationships. 2.2.3 OUTCOMES OF SUCCESSFUL MENTORING That mentoring in the workplace is beneficial, is widely accepted: “mentoring can be a life- altering relationship that inspires mutual growth, learning and development.” (Kram & Ragins, 2008, p. 3). Deakins, Graham and Sullivan (1998) were among the first to research how a mentor could also assist a start-up entrepreneur to avoid common pitfalls. Using a 12 mix of quantitative analysis and qualitative interviews focusing on 45 start-up entrepreneurs in Scotland, they concluded that a mentor could have a positive effect on the formation, survival and growth of a new company. Start-up businesses often fail due to the “lack of experience and competency on the part of the new entrepreneurs” (St. Jean & Audet, 2012, p. 119). This is a gap which a skilled mentor can help to fill. Passing on knowledge from their own experience can save a new entrepreneur from making costly mistakes. This review of mentoring literature shows that by its very nature, mentoring is a versatile, personalized form of assistance which has been found to facilitate a transfer of one person’s experience to another’s learning, to smooth the development and expansion of an entrepreneur’s business (Bisk, 2002; St Jean & Audet, 2012; Sullivan, 2000). A mentor can act as a leader, coach, teacher, counsellor or buddy. Mentors provide a sounding board for the new entrepreneur, challenging their assumptions and widening their thinking (Kent et al., 2003). Sullivan (2000) suggested that the role of the mentor was to “enable the entrepreneur to reflect on action and perhaps to modify future actions as a result” (p. 163), that is, the mentor helps the entrepreneur to reflect and learn, rather than to proscribe solutions. Like Sullivan, Cull found that the most effective style of entrepreneurial mentoring was “less directive and more empowering” (p. 8), especially as the mentee’s business grows. The goal of the mentor should be to reduce dependence on their support and increase self-confidence of the entrepreneur (Cull, 2006). In Kram’s earlier works (1985, 1988), she suggests that a mentor leads to two sets of outcomes: one is related to career development (coaching, protection, challenge setting and integration into the local business networks) while the other is related to psychological development (building self-confidence, giving advice, providing friendship). Noe (1988) expresses these two functions as “job related outcomes” and “interpersonal outcomes”, while Ramsden and Bennett (2005) refer to these outcomes as hard (e.g. increased turnover) and soft (e.g. increased self-confidence). Clutterbuck (1991, as cited in Sullivan, 2000, p. 169) focuses more on the career development functions of a mentor, listing them as coach, coordinator, supporter, monitor and organizer. St-Jean (2011, p. 79) adds a further function of the mentor, namely that of being a role model, giving stories from their life as inspiration. Despite the more recent models, it is Kram’s two classifications (career development and psychological development) which pervade the literature. Waters and Birrell (2007) then went on to test whether these two theoretical functions applied equally to entrepreneurial mentoring as they did to the intra-organisational, 13 corporate context. Using a mix of qualitative and quantitative methods to research Small Business Incubators in Australia, they concluded that the psychological function of mentors was especially valuable for new entrepreneurs. St-Jean (2011) concluded that the functions of an entrepreneur mentor were distinct from those of a corporate mentor and that their relationship was quite different given that the mentor has no hierarchical position above the entrepreneur they are supporting. In reviewing the literature about mentoring it has become clear that there are many opinions regarding the requirements of a successful mentoring relationship and what the expected outcomes can be. Bringing some order to these views will aid understanding of the process. The next section will collate the most commonly recurring views in a concise framework for this purpose. 2.2.4 CREATING A FRAMEWORK This discussion demonstrates that evaluating the success of a mentoring programme is not straightforward. It is quite possible that an entrepreneur who is more likely to be successful, will seek a mentor, thus an element of self-selection comes into play before the programme even begins. Furthermore, accurately measuring changes to the financial health of a business is made difficult due to the reluctance to maintain accurate records typically found amongst indigenous entrepreneurs (Hailey 1987). Attribution is a further issue, as a business may improve following participation in a mentoring programme, but the improvements may have been caused by any number of factors, not the mentoring alone. Cull (2006) suggests that success is measured by an entrepreneur being able to grow, sustain and ultimately sell their business. Waters et al. (2002) measure objective factors (such as profitability) and subjective factors (such as how successful the entrepreneur believes their business is and how strong their own self-esteem is). St-Jean et al. (n.d., p. 13) focus primarily on the mentee’s satisfaction with the programme, to verify its success or otherwise. This diverse range of approaches to assess the worth of mentoring, are captured in Figure 1 on page 14 and Figure 2 on page 15 which summarise the key inputs and outputs required for a successful mentoring programme. Both the mentor and the mentee require certain attributes to create a productive working relationship which results in improved business operations as well as the personal development of the mentee. The framework summarized in these diagrams will form the structure used to review the PMBP in Samoa, 14 described in more detail in chapters 6 and 7. Ultimately the stories told will give a more complete picture of the success or otherwise of the mentoring relationship (Megginson, 2000, as cited in Kent, Dennis and Tanton, 2003). With the PBMP, there is the added complicating factor that the mentor is a visitor to the mentee’s country. Hence the following discussion regarding inter-cultural communication is relevant in evaluating the PBMP. Mentor (Sarri 2011, Pompa 2012) Mentee (St Jean 2012) Business Expertise (Barrett 2006) Receptive - Open to Change (St Jean 2012) Training and Support Received Actively Participate (St Jean 2012) (Hudson-Davies 2002, Sarri 2011) Empathy + Listening Committed to Action (Barrett 2006) (Clutterbuck 2002, Kent, Dennis & Tanton 2003, St. Jean & Audet n.d.) Adjust to Local Context (St. Jean & Audet n.d.) Experience in the Host Country Relationship (St Jean + Audet n.d.) Mutual Trust and Respect (Kram 1985, Ragins & Scandura 1994, Cull 2006, Pompa 2012, St Jean 2012) Frequency and Duration of Meetings (Deakins, Graeme & Sullivan 1998, Hudson-Davies 2002, St Jean & Audet 2009, Pompa 2012) Communication when Apart Clear Expectations (Hudson-Davies 2002, Barrett 2006, Pompa 2012) Goals and Outcomes (Kram 1985 and many others) Business Development Socio-Cultural Development Economic Outcomes Sounding Board (Kent, Dennis & Tanton 2003, (Deakins, Graeme & Sullivan 1998, Sullivan 2000, Barrett 2006) Barrett 2006, Sarri 2011, Pompa 2012) Develop New Systems Challenge Assumptions (Kent, Dennis and Tanton 2003, Barrett 2006) Increased Self-Confidence (St Jean& Audet 2013) Increased Motivation (St Jean & Audet 2013) Increased Skills + Knowledge (Pompa 2012, St. Jean & Audet 2013) Networking and Contacts (Kent, Dennis & Tanton 2003, Barrett 2006, St Jean& Audet n.d.) Success Satisfaction with the Programme (St Jean & Audet n.d.) Would Recommend Mentoring to Others Ability to Balance Economic with Cultural Demands (Saffu 2003) Figure 1 A Framework to Evaluate an International Mentoring Programme with Academic References 15 Outcomes Success Satisfaction with Programme Would Recommend to Others Balance Economic & Cultural Demands Inputs Business Development Outcomes Economic Outcomes Develop New Systems Socio-Cultural Outcomes Sounding Board Challenge Assumptions Increased Self-Confidence Increased Motivation Increased Skills & Knowledge Networking & Contacts Inputs Relationship Mutual Trust & Respect Frequency & Duration of Meetings Communication when Apart Clear Expectations Mentor Attributes Business Expertise Training & Support Received Empathy & Listening Experience in the Local Context Mentee Attributes Receptive – Open to Change Actively Participates Committed to Action Figure 2 A Framework to Evaluate an International Mentoring Programme: Summary 16 2.3 CROSS-CULTURAL COMMUNICATION IN THE WORK ENVIRONMENT A good understanding of the specific context of the new entrepreneur’s business is vital for a successful mentoring relationship (St Jean & Audet, 2012). Where the mentoring takes place across different countries quite distinct challenges will arise. The most obvious hurdle is that the mentor and mentee speak different languages. Equally important, but often less obvious, is the need to communicate in a style understood by all parties as well as understanding local challenges and personal priorities. The skill to impart knowledge across a cultural divide is of vital importance when the mentor is from a different country to the mentee. Cross-cultural communication is an area of abundant research. Hall and Hall (1990) acknowledge that the problems caused in cross cultural-interactions go much deeper than a language barrier, given that much of what is communicated is based on sub-conscious, non-verbal messages and it is these non-verbal messages which vary greatly between cultures. Understanding the type of information sought by people from a particular culture and their ways of classifying it and sharing it, is key to effective international communication. The propensity for some cultures to embrace entrepreneurial ideas while others shun it has been studied at length. Hofstede’s regularly cited work titled “Culture’s Consequences” (1980), examined the beliefs, values and work roles of 88,000 employees of IBM in 40 countries. He developed a four-pronged approach to assess a culture and its characteristics: uncertainty avoidance; power distribution; individualism/collectivism; masculinity/femininity. Hofstede concludes that organisations should not be managed separately from their environmental culture, but rather, they must be managed with reference to the cultural context in which they operate. This work has been criticised for assuming that cultural tendencies remain stable while many anthropologists would argue that cultures and their values are constantly changing (Clark, 2003), but nonetheless, it provides a useful starting point for examining different approaches to entrepreneurial ideas. Hofstede’s (1980) cultural categories have been applied to a study of international entrepreneurial differences by Mueller and Thomas (2001). In an extensive survey of 1800 university students across nineteen countries, they assess how culture conditions the potential for entrepreneurship. The propensity for entrepreneurial activity varies between 17 countries due to differences in cultural values and beliefs. Some cultures, namely those that foster individualism and have low uncertainty avoidance, were a lot more supportive of entrepreneurialism than more collective-oriented cultures. While mentoring was not specifically considered in this study, Mueller and Thomas (2001, p. 52) conclude that business education can play important roles in providing both technical tools and also helping “to reorient individuals toward self-reliance, independent action, creativity and flexible thinking”, even where the local culture did not foster these attributes. Conducting research on entrepreneurs in Ireland through a written questionnaire, Bisk (2002) found that the Irish culture itself was a barrier to entrepreneurship, but this could be overcome through the use of the government supported mentoring agency. Very few studies have investigated cross-cultural mentoring. Some studies have researched mentoring for expatriate employees, where the mentor is from the host country (Carraher et al., 2008; Gilbert & Cartwright, 2008; Pervik, Henningson, & Hultman, 2011) or mentoring for international students studying in the US (Sewon & Egan, 2011). In this programme, the student mentors were provided with training in cross-cultural interaction, designed to challenge their own cultural assumptions, which each participant took for granted. The authors suggest that further research on “the cultural dynamics in the mentoring practice” (p.102) is required. Indeed, differences in business culture, communication methods and learning styles can lead to the breakdown of the mentoring relationship (St-Jean et al., n.d., p. 7). Despite this mutual understanding being so important to the mentoring relationship, I am not aware of any academic studies where the mentor is the “visitor” to the mentees’ country. This reversal of roles appears to be an area devoid of any academic study. In practice however, there are several examples of international mentoring, where mentors from an industrialized country are sent to assist entrepreneurs in developing countries. These will be discussed briefly in the next section, based on their own websites and publications. 2.4 EXAMPLES OF INTERNATIONAL MENTORING PROGRAMMES Many countries view entrepreneurs as the lifeblood of their economy and have systems in place to support their growth and adaptation to evolving markets and changing technology. It has been recognized in many industrialised countries that one way in which they can 18 provide support, is through sharing their personal expertise in business development. As discussed already, these mentors must be sensitive to the various challenges facing entrepreneurs in different communities in order to tailor their advice appropriately. In developing countries or “emerging market economies” (United Nations Economic Commission for Europe, 2002, p. 1) some of the greatest issues include “the transition to the culture of entrepreneurship, the acquisition of business and management skills and technical awareness of the product and service quality demanded by market driven economies” (United Nations Economic Commission for Europe, 2002, p. 1). The United Nations Economic Commission for Europe organized the Expert Meeting on Best Practice in Business Advisory, Counselling and Information Services in Geneva, 2000, attended by 150 senior policy makers from 33 countries. At this meeting it was emphasized that governments in transition economies should orient their policies and programmes to foster entrepreneurship. Delegates concluded that business advisory, counselling and information services are among the most effective ways to assist entrepreneurs in becoming more competitive (United Nations Economic Commission for Europe, 2002). They agreed that business services need to be tailored to the different needs of diverse clients and they are most effective when they are brought geographically close to the entrepreneurs they are supporting. A mentoring arrangement would meet both of these requirements. Some examples of organisations providing this international business support to entrepreneurs in developing countries are the TAM/ BAS programmes funded by the European Bank for Restructuring and Development; PUM, the Dutch organization which links retired business people with businesses in many developing countries; and SES the German Senior Expert Service offering similar services. These organisations have a much longer experience of international mentoring, compared with the Pacific Business Mentoring Association and are thus worth considering briefly in order to learn from their experiences, although all information is taken from their own reporting and documentation, due to the lack of any external academic analysis. 2.4.1 TURN AROUND MANAGEMENT GROUP AND BUSINESS ADVISORY SERVICES Two services designed to support entrepreneurs in emerging market economies are the Turn Around Management Group (TAM) and the Business Advisory Services (BAS), both supported by the UNDP and EBRD (European Bank for Restructuring and Development). 19 The mission of TAM and BAS is to “promote economic transition through advice and mentoring at the enterprise level and to develop a sustainable infrastructure of business advisory services” (EBRD, 2008, p. 3). Both programmes work directly with individual enterprises, providing industry specific advice, in south-eastern Europe, the Caucasus and Central Asia. TAM contracts Senior Industrial Advisors who have a minimum of 15 years’ experience as a CEO in a free market economy to provide technical and commercial know-how in local SMEs (small and medium enterprises). Projects usually last around 18 months, during which time the TAM advisor will visit the company approximately 15 times for a total of about 60 days. The goal is usually to transform the local enterprise into an efficient well- run company often with a total restructuring. Their own research indicates that TAM projects have on average increased productivity by 40%, increased turnover by 22%, reduced staff by 13% and 84% of clients rate their service as satisfactory or better (EBRD, 2008 p.7). The BAS programme works with micro businesses and provides 50% grants for them to contract private sector consultants, usually for about four months. They have small local offices and also aim to up-skill the local consultancy staff base. They focus their support on rural areas and they have prioritized women in business. Their own research indicates that BAS has made a positive difference in 96% of their projects (EBRD, 2008 p.9). Both TAM and BAS carefully select the entrepreneurs who they will work with based on their ability to demonstrate potential for business growth. A more recent report (EBRD, 2011) indicates the new strategy will see these organisations work only with clients approved by the EBRD’s banking teams in areas that are consistent with the EBRD priorities. TAM/BAS appears to be a very top-down, Euro-centric approach. Nowhere in their own documents do they say they consider the priorities of the country or company they are assisting. No information is provided about the cultural-training offered to the senior advisors, possibly because no training is offered to them at all. Their approach is very clearly to change local enterprises to fit the ‘efficient Western model’ and there does not appear to be much, if any, leeway for local considerations. Indeed the EBRD has been described as the implementing the “fourth wave of neoliberalism” (Shields & Wallin, n.d., p. 9) because of its tendency to dogmatically apply its favoured economic models with little sensitivity to local conditions. 20 Through their selection criteria, it is likely that they will only work with businesses that align with the values of the EBRD, rather than a wider cross section of companies. Their high success rate is probably determined at the selection stage, before the mentoring has even begun. The information provided would indicate that regular face to face meetings (approximately three days per month) are the corner stone of this support programme, and in-line with or even more than that recommended by mentoring researchers (Waters et. al.2002; St Jean & Audet, 2012). While the Senior Industrial Advisors are likely to be experts in their field, no mention is made of their knowledge of the local context in which they are providing their services. As many researchers have identified, this is a crucial component of the success of a mentoring programme (Bisk, 2002; Cull, 2006; Morrison and Bergin-Seers, 2002; St. Jean, Audet & Couteret, n.d.), but it seems to be missing from the TAM/BAS programmes. Further objective research would be required to identify if a lack of contextual understanding is indeed an issue with the TAM/BAS programmes. 2.4.2 THE CONFEDERATION OF EUROPEAN SENIOR EXPERT SERVICES The Confederation of European Senior Expert Services (CESES) has 21 member organisations from the European Union who have provided voluntary short-term assistance in 158 developing countries. They aim to assist small and medium-size enterprises by providing expertise from retired professionals. The member organisations operate in a similar manner. I will focus on the Dutch organization, namely PUM Netherlands Senior Experts and SES, as an example. CESES and PUM both provide technical assistance to businesses in developing countries and they consider mentoring to be one component of this assistance. While their programmes thus include mentoring, that is not necessarily their main focus (CESES, 2011). Operating since 1978, the PUM Netherlands Senior Experts programme connects retired business people from the Netherlands with entrepreneurs in developing countries and emerging markets. The senior experts must have at least 30 years’ experience in a business environment and they volunteer their time to execute short-term consultancy projects. Through sharing their knowledge and experience, they aim to help the local business grow. In 35 years, they have grown to 3200 volunteers who advise 2000 entrepreneurs annually in Africa, Asia, Europe and Latin America. Their mission is to promote “self-sufficiency, entrepreneurship and the sustainable development of small and medium sized enterprises in developing countries and emerging markets” (PUM, n.d.). The senior experts usually visit 21 their partner entrepreneur for two weeks and then they continue to provide support via email and a follow up visit where appropriate. They provide individual mentoring services, in country-seminars, training for local tertiary providers, and small grants for training in the Netherlands. They also run a business link programme which aims to build trade between Dutch companies and the entrepreneurs in the developing country. As with the TAM/BAS programmes they have a thorough selection process focusing on the entrepreneurs with good growth potential but who do not have the means for pay for private consultancy. In 2011 an independent evaluation of PUM was commissioned (PUM Netherlands Senior Experts, 2011). The evaluation team visited six countries to look at 57 projects. They considered policy relevance, effectiveness, business links and cooperation with local organisations. Unsurprisingly, they found that the average PUM client operates in a “suboptimal institutional environment” (p. 18), which offered challenges to the usefulness of PUM services. Limited access to capital meant advice could not always be carried out. They acknowledge that measuring the results and long term effects of their impact is very difficult. Where a mission was unsuccessful, they are careful to not lay full blame with the PUM experts, rather, “recipients may lack the ambition to carry out the advice, or the company may not have access to the financial means to carry out the advice” (PUM Netherlands Senior Experts, 2011, p. 23). The report acknowledges that the PUM experts may have great knowledge and experience in their specific field, but they are not necessarily experienced in consulting, nor are they always aware of the specific aspects and limitations of the receiving country. Providing advice which is “realisable in the local context” (PUM Netherlands Senior Experts, 2011, p. 25) can be quite a challenge and very different to providing advice in the Netherlands. In his thesis looking at how demand-driven Dutch private-sector-development instruments are, Franken (2013) concludes that PUM must be meeting local priorities, as the local enterprises contribute to the cost of having a senior expert visit them. He does however acknowledge, that there is “no empirical evidence that a more demand-driven program leads to more impact” (Franken, 2013, p. 54). As measuring the impact of the PUM’s programme has been a very difficult exercise, management have taken on a new approach together with the Universities of Wageningen and Rotterdam. The planned Learning Impact Evaluation will combine questions of accountability (did it work?) and learning (why or why not?). The emphasis on learning is deemed to be more appropriate when working in such complex and often unpredictable environments of emergent market economies. This 22 research program will be the first of its kind to apply these principles to Private Sector Development Interventions (Meerkerk, 28 March 2013). Unlike the TAM/BAS programmes, the PUM Netherlands Senior Experts acknowledge that understanding the local context can cause challenges for their mentors. They note that not all business practices from the Netherlands are directly transferable to the countries they are working in. While they have not yet identified a solution to this issue, they are making steps to improve this, through the proposed Learning Impact Evaluation. Like the Pacific Business Mentoring Programme, which will be discussed in the following section, their experts visit the local market for two weeks, and then offer long-distance follow up support where appropriate. This is a lot shorter than the time frames recommended by academic researchers of mentoring programmes (see Kram, 1985 and Waters et. al., 2002), but it is a system which suits the Dutch volunteers. The PUM Netherlands Senior Experts appears to be a very self-reflective organization, looking for innovative ways to assess their impacts and to improve their practices. 2.4.3 THE PACIFIC BUSINESS MENTORING PROGRAMME The Pacific Business Mentoring Programme (PBMP) was established by Business Mentors New Zealand (BMNZ) in 2010 and funded by the New Zealand Aid Programme. The aim of this programme is to strengthen the economy of the countries concerned, by supporting their private sector. “The programme aims to assist small and medium sized businesses in the Pacific to manage and grow their businesses in a way that supports sustained increases in production and employment over time” (Schofield, 2010, p. 68). The overarching goals are wealth creation, economic development and employment generation (Atkinson, 2012, p. 4). The PBMP does this by sending experienced business people from New Zealand to ten Pacific Island countries: Cook Islands, Samoa, Tonga, Vanuatu, Papua New Guinea, Fiji Solomon Islands, Kiribati, Niue and Tuvalu. In the first two years of operation they assisted 320 small and medium sized businesses in a wide variety of sectors including tourism, agriculture, horticulture, marine industries, service industries and manufacturing. It is anticipated that the number of clients assisted will increase to 600 by 2013 (Atkinson, 2012, p.15). The PBMP is managed by BMNZ from its head office in Auckland. The budget in its first year of operation was NZ$953,000. By its third year in operation this figure had increased to $2,384,826. 23 The criteria for a business to participate seem a lot less stringent than those expected from the TAM/BAS or PUM programmes. The business must have a minimum of six months trading history, be owned by the person requesting mentoring, and be committed to participate in the mentoring programme for twelve months. There is no mention of “being most likely to achieve success” which is a requirement of other programmes. In Samoa businesses must be a member of the local Chamber of Commerce, who perform the function of spreading awareness of the mentoring programme and recruiting participants. (Pacific Business Mentoring Programme, n.d.). Unlike the TAM/BAS and PUM programmes, the New Zealand volunteer mentors first attend a Mentor Accreditation Programme before they travel to their host country. This accreditation programme is run by Business Mentors New Zealand and is not tailored to the Pacific Island Countries. The mentors are not paid for their time on this programme, but their expenses are reimbursed and they receive a small honorarium. The mentors stay in country for two weeks initially where they usually assist between five and eight client companies each. Support then continues after they return to New Zealand, utilizing Skype, email and phone contact. Six months later the mentors return to their respective countries to offer further face to face mentoring (Schofield, 2010). Between the mentors’ visits in- country training workshops are held, led by two trainers from New Zealand. These workshops last for between one and five days, made up of half day seminars focussing on a particular aspect of running a business such as financial record keeping or marketing. They are open to the mentees and their employees. Attendance is voluntary, and no formal assessment of their learning is provided. Attendees complete a survey immediately following the workshop which has indicated a very high level of satisfaction. A further aspect of the PBMP is a recently established pilot scheme in Cook Islands and Samoa to mentor Chief Executives of State Owned Enterprises. Reports to date, focusing on the economic impact of this programme, indicate that it has been very successful and funding has been extended for a further three years. The programme evaluation commissioned by MFAT in 2012 (Atkinson, 2012) found that the PBMP had reached all its targets with regards to growth in the number of clients and number of target countries. The key performance indicators of the PBMP are increases in the number of employees, in annual sales revenue, improved business plans and reports, growth in export sales and client satisfaction. These KPIs are measured by an online survey which clients complete every 6 months. The programme evaluation report notes some fundamental flaws with this survey (Atkinson, 2012, p.23) namely, there appears to be 24 confusion with regards to what currency the mentees use for their responses. Dramatic increases in exports have been reported in many cases, but “these should be treated with considerable caution before attributing them to PBMP” (Atkinson, 2012, p.24). Counting the number of employees is also not a straightforward concept, open to different interpretations. For example some did not include their husband or wife as an employee, even though they worked long hours in the business. The evaluation research found discrepancies in the baseline data provided by mentees, meaning that the reported changes were also giving a skewed picture of the impact of the mentoring. In several cases, the entrepreneur received assistance to complete the survey which may result in overly positive responses being reported as the local culture will encourage them not to offend the local coordinator who is assisting them. Thus, while the PBMP have attempted to measure quantitative changes to the businesses, there are very real issues with this approach. “Measuring quantifiable impact is more problematic [than measuring client satisfaction] and while over time is an essential indicator the programme does not as yet have a fully verifiable means of achieving such measurement” (Atkinson, 2012, p. 30). Given the issues with collecting accurate and verifiable data regarding the business mentoring, it is the individual stories and anecdotes from those involved in the programme which provide valuable qualitative information. 2.5 CONCLUSION This literature review indicates that mentoring is widely accepted as a practice which is beneficial to entrepreneurs. By its very nature it is a personalized service, which will vary from case to case. Where there is a good match between the mentor and mentee it has the potential to be a life-altering relationship, which can help an inexperienced entrepreneur expand their business, avoiding costly mistakes along the way. Mentoring can result in both improvements to the business and the personal growth of the mentee. However, measuring the full impact of mentoring is fraught with difficulties. Quantifiable measures such as increases in turnover, exports and employees are difficult to verify and may be caused by many factors other than the mentoring alone. Any quantitative data needs to be supported by the mentee’s stories of their experiences. There is very limited research on international mentoring, especially where the mentor is the visitor to the mentees’ country. The reported client satisfaction rates with the PBMP 25 are very high and would indicate that the programme is working well. There is however, the danger that mentoring can be used as just another form of subtle Western domination, if the focus is to change businesses to fit one particular mould at the expense of local values and priorities. While mentoring is used as a means to assist entrepreneurs in developing countries, the lack of rigorous academic research on the topic makes it difficult to evaluate its true impact. This chapter has answered the first research question: How can the effectiveness of international business mentoring be evaluated?” by creating a model based on academic literature (Figure 1 and Figure 2 on pages 14 and 15) which summaries the key components. This model will be used to assess the PBMP in chapters 6 and 7 but first it is necessary to understand the culture within which it is operating. Therefore the next chapter will provide an overview of the indigenous entrepreneurship and how it differs from the widely accepted Western capitalist model of business. 26 3. INDIGENOUS ENTREPRENEURSHIP 3.1 INTRODUCTION There is no universal standard of entrepreneurial practice, but rather it is “shaped by and profoundly effects, the culture within which it operates” (Schaper, 2007, p. 526). Entrepreneurship and indigenous values have at times been presented as incompatible (Ingram, 1990; Williksen-Bakker, 2002), but in fact many indigenous people carried out entrepreneurial practices long before Western colonization. They have since developed their own styles of entrepreneurship, blending traditional culture and values with modern economic practices (Dana & Anderson, 2007; Farrelly, 2009). Entrepreneurship can bring independence, pride and new opportunities to communities, but it will only be sustainable if done in a manner congruent with their social norms (Hailey, 1987). In some cases, the price of following modern, free-market capitalist practices can result in social ostracism and ultimately the failure of the business (Hailey, 1987; Saffu, 2003). Gegeo (1998) argued that many development projects continue to be based on Anglo-European models, ignoring and overriding indigenous knowledge. Recent shocks to many neoliberal economies, demonstrate that not all the answers lie with the practices of the developed West. It is worthwhile to consider whether it is possible to harmonize capitalism with traditional cultural practices in order to increase the stability and resilience of local communities. 27 In this chapter I will consider what makes indigenous entrepreneurial practices different to those of standard capitalist entrepreneurs. I will review the literature on socially embedded economies which create hybrid systems unique to their own cultures. I will then focus on indigenous entrepreneurship in the Pacific Islands, looking at the key challenges they face as well as their strengths and opportunities. I will conclude with a critical reflection of the current practice in development aid to focus on the private sector. While this has a lot of potential to support sustainable livelihoods, it can also become yet another Western imposition if local practices, values and priorities are not allowed for. 3.2 INDIGENOUS ENTREPRENEURSHIP: DEFINITIONS AND VALUES 3.2.1 DEFINITIONS The term indigenous refers to people whose ancestors were “living in an area prior to colonisation or within a nation-state prior to the formation of a nation-state” (Dana & Anderson, 2007, p. 4). Indigenous entrepreneurship is widely accepted as a positive way to assist with national economic development (Dana & Anderson, 2007; Hindle & Moroz, 2010; Lorrain & Laferté, 2006), however definitions of entrepreneurship and indigenous entrepreneurship vary widely. Hailey (1987, p.18) provides a brief overview of definitions of entrepreneurship from the 1800s. These definitions emphasize different aspects of the entrepreneur’s role, including being the provider of capital, the creator of profits, a risk taker and an innovator. Adam Smith described the entrepreneur as “a supplier of capital and a manager who intervenes between labourers and consumers” while, in the same century, Jean Say described the entrepreneur as someone who “brought together the factors of production in such a way that new wealth was created” and Mill, in 1848, focused on risk taking as the key distinguishing feature of an entrepreneur. In 1928 Schumpeter saw the entrepreneur as an innovator and a driver of change (as cited in Dana & Anderson, 2007, p. 3). Over a hundred years later, in the 1980s, Drucker, similarly to Schumpeter, highlighted the role of the entrepreneur as a “change agent seeking out and exploiting new opportunities” (as cited in Hailey, 1987, p. 18). Hailey himself described entrepreneurs as catalysts for change with “a creative force able to coordinate business resources profitably” (1987, p. 18). The most simple definition of an entrepreneur is someone who is “running a business” (Moore and de Bruin, as cited in Farrelly, 2009, p. 313) which is broad enough to allow for local variations. 28 There is not one universal method of being an entrepreneur; rather the form it takes will be shaped by the culture within which it operates (Dana & Anderson, 2007), and simultaneously entrepreneurs will influence their local culture (Brook & Luong, 1999). Most writing about entrepreneurship is taken from a Eurocentric point of view, emphasizing individuality and monetary success. Historically entrepreneurs have at times been perceived negatively, as greedy and exploitative. As entrepreneurship in other cultures is being more widely recognized, the term indigenous entrepreneurship has come to mean a style of operating, quite distinct from mainstream entrepreneurship. Hindle and Lansdowne (2002, p. 18) define indigenous entrepreneurship as “the creation, management and development of new ventures by indigenous people for the benefit of indigenous people”. On the other hand, Morris (2004 as cited in Peredo and Anderson, 2006) looked at societies in South Africa and Hawaii, arguing that the principles of entrepreneurship are basically the same across cultures. He does, however, concede that the values and goals motivating indigenous entrepreneurs will be different to those of non- indigenous entrepreneurs, noting that the creation of wealth was not the driving force in his two case studies. Peredo and Anderson (2006) consider indigenous entrepreneurship to differ conceptually from mainstream entrepreneurship, with intangible culturally-based outcomes being aspired to, as well as cash profits. They note that environmental awareness and collective organisation are the hallmarks of indigenous entrepreneurship. In his study of indigenous entrepreneurial people in Canada, Anderson (2004, as cited in Peredo and Anderson, 2006) observed that they had a much larger agenda of rebuilding their communities and reasserting control over their traditional territories. Hindle and Moroz (2010, p. 363) take this a step further, arguing that the cultural norms associated with indigenous entrepreneurs are so important that “much of the received wisdom of mainstream entrepreneurship may well be inapplicable in indigenous circumstances”. It is thus clear, that there are many different ways of operating as an entrepreneur. The perception of an opportunity and the measurement of success is strongly influenced by the local culture and will vary tremendously between different communities (Dana & Anderson, 2007). Western entrepreneurial concepts, values and motivations may be quite different from the driving forces in other cultures. Indigenous entrepreneurs need to balance two often conflicting principles – business and tradition. Hindle (2005) considers Whetton’s hybrid theory to explain how indigenous entrepreneurs foster coherence among these apparently incompatible elements. The traditional focus on community sharing, gifting and reciprocity must be balanced with 29 individual profiteering; the respect for customs must be balanced with innovation; working together with working in competition; living sustainably with maximising benefits from local resources. Ultimately all entrepreneurs must balance multiple values and carve their own unique style of entrepreneurship which meets their needs. Economic activities are interwoven with their social activities creating a diverse range of business structures and outcomes, which will be discussed further in the next sections. 3.2.2 SOCIALLY EMBEDDED ECONOMIES People in different cultures and times have very different systems of value. Various systems of exchange are created, quite different to the generally accepted Western economic models. Economic activities are shaped by their contextual social relations. In the 1950’s Karl Polanyi argued that reciprocity, redistribution and exchanges are “socially embedded modes of economic activity, that might be expressed or conducted through kinship, religious, political or other relations” (Scott & Marshall, 2009). Personal social networks impact on trading activity and informal exchanges between households. Both Pieterse (1994) and Jones (2008) argue that globalization has led to an increased complexity in society, with many cultures creating their own unique hybrid combination of economic and social systems. This is not something happening only in developing countries, but throughout the world. The value of social networks is a well-accepted concept in modern capitalist societies, with economic transactions often also involving a “welfare enhancing” aspect (Shorthose & Strange, 2004, p. 47). As early as the 1920s, Malinowski wrote about this in his study of trade and exchange systems, known as Kula, in Papua New Guinea and other islands in the Pacific Ocean (Malinowski, 1920). Kula was a complex system of gifting and counter-gifting, including both useful goods and other items which were highly prized but of no practical use. Lifelong relationships were always established between participants in Kula, linking people who were living on far flung islands and this was probably the main purpose of apparently non-economic exchanges. Curry spent many years studying societies in Papua New Guinea, looking especially at village trade stores (1999) and small-holder palm oil production (2003). While both appeared outwardly to be a capitalist construct, they were run in a way which reflected the local community’s values. The capital required to establish a trade-store could come from a mix of community members and the returns on this were determined more by kinship than 30 by the investment amount. Payment of labour for work with palm oil production was not usually related to the hours worked, but rather depended on other logics, primarily that of kinship. Giving and receiving labour is a component of the gift exchange system, so integral to social relationships (Curry & Koczberski, 2012). With kinship also being the primary determinant of trade-store patronage, these stores demonstrate an entangled blend of economic, social and cultural relations straddling both market and indigenous economies. Indeed, Curry observed that “market imperatives were often subordinated to the needs of the social and cultural” (1999, p. 296), with the trade stores becoming a means to facilitate gift exchange and a source of status, rather than to generate financial profits. While successful development has long been defined to include the creation of Western- style economic institutions, Gibson-Graham (2005) strived to create a pathway for post- development interventions with their “diverse economies” approach. Rather than seeing people as barriers to development, they follow Escobar’s (1997) argument that a bottom up approach, determined by the local community will be more effective. They emphasize the importance of non-capitalist practices within the household and informal economies. The most common form of labour is the unpaid work carried out in the home and community while capitalist transactions make up only a very small percentage of the “plethora of exchange transactions” (Gibson-Graham, 2005, p. 62). Many non-market transactions take place every day: goods and services are shared, exchanged or given away. These transactions are not measured formally but they fulfill cultural and social norms. Gibson-Graham (2005) look at three aspects of the economy which have both capitalist and non-capitalist components: transactions, labour and enterprise. All components combine to make up what they term a “community economy”. They describe this diverse economy as being “made up of a thin layer of capitalist economic activity underlaid by a thick meshwork of traditional practices and relationships of sharing, borrowing, volunteering and individual and collective work” (Gibson-Graham, 2005, p. 171). Their approach has however come under considerable criticism for failing to recognize “the extent to which indigenous non-market economies . . . are now subsidised . . . by surpluses generated in the capitalist economy” (Curry, 2005, p. 129). For example it is common practice, and a social expectation, that Pacific Islanders living abroad will send home remittances on a regular basis. A further criticism of Gibson-Graham’s work is that they seem to view all non-capitalist relations as something positive, yet it is important to note that they too can involve exploitative interactions. Non-market economies and capitalist practices are two systems, neither of which is perfect. Today’s indigenous entrepreneur can 31 intertwine the two, creating a way of operating based on their unique opportunities, resources and values. McKay (2009, p. 333) together with Gibson and Cahill worked with a community in Jagna in the Philippines to “create a different understanding of economy by building on the existing diversity of local economic practices”. They recognized that even though capitalist companies, economic institutions and salaried jobs were a part of this society, people’s lives “continued to be shaped by gifts, reciprocal exchanges and non-capitalist organisational forms” (McKay, 2009, p. 331). They chose not to simply impose a Western model of economics on this society but instead they took the “diverse economies” approach, looking at what assets and knowledge could be drawn upon. They aimed to create group enterprises which could draw on their kinship networks, traditional exchange relations and social practices. In a follow up report on this exercise in ‘applied economic anthropology’ they recognise that the diversity of practices in this community adds to its stability: “A local economy is likely to be more resilient to the devastating impacts of pricing fluctuations and boom-bust trade and investment cycles if it contains a diverse range of economic activities supporting well-being” (K. Gibson, Cahill, & McKay, 2010, p. 245). Today’s indigenous entrepreneurs can combine their culture with their business practices. These are not two mutually exclusive concepts, but rather they can be adapted to support each other. Foley’s research in Australian aboriginal communities concluded that “the indigenous entrepreneur can remain true to their indigenous beliefs in a modern urban environment and be successful in business (2004, p. 266). Hindle (2005) takes this idea further, suggesting that the empowerment created through entrepreneurial activities can repair past damages done to indigenous cultures. This discussion of socially-embedded economies has shown that indigenous practices are not necessarily destroyed on contact with capitalist practices. Rather, more complex arrangements evolve, embedding the economic within social and cultural constructs, more appropriately reflecting the diversity of local reality. Indigenous entrepreneurs can be very successful in the modern global economy, but they must do so in their own way; to impose a rigid Western system of entrepreneurship is simply another form of domination (Hindle & Moroz, 2010). There is a general agreement that entrepreneurial activity should not try to follow supposed ‘universal laws’, but should adapt to different cultures and situations (Cahn, 2008; Foley, 2004; Hindle & Moroz, 2010; Peredo & Anderson, 2006). Indigenous entrepreneurs can utilise their heritage, their knowledge and their community to create a successful venture. There does not need to be a contradiction between tradition and 32 innovation. Cultures are not static, but constantly evolving and history is full of examples of people seeking new ways of doing things, to improve their lives. The next section will focus on how Pacific Islanders are combining entrepreneurial practices with their local customs. 3.3 SMALL BUSINESS IN THE PACIFIC ISLANDS Indigenous entrepreneurs in the Pacific Islands have quite different strengths and challenges compared with many other indigenous entrepreneurs around the world. Many indigenous entrepreneurs elsewhere in the world are living in a society where they are in the minority, dominated by a colonizing culture, suffering racism on a daily basis and living disadvantaged lives. (This includes for example Australian Aborigines (Foley, 2004), Native Americans (Hindle & Lansdowne, 2002) and indigenous people in Canada and Peru (Dana & Anderson, 2007)). In Samoa and several other Pacific Island countries, this situation is quite different, with indigenous people making up the majority of their relatively homogenous population. They do, however, still face many challenges to their entrepreneurial pursuits. A general lack of cash-earning opportunities pervades the Pacific Islands, especially in rural areas. Agriculture, fisheries and tourism form the base of their economies and subsistence agriculture is a primary source of livelihood for many (Fairbairn, 2006). Entrepreneurial activities can add much needed diversity to this base as the need for cash is becoming increasingly important, primarily for education, medical support and to meet desires for material goods (Cahn, 2008). There are examples in the Pacific of indigenous societies who have successfully accepted new types of economic activities while still retaining their traditional cultural integrity (Cahn, 2008; Finney, 1987). Nevertheless, although the growth of small businesses in the Pacific is encouraged, they face unique challenges which need to be recognized by any organisations charged with providing business assistance. 3.3.1 PHYSICAL CHALLENGES TO PACIFIC ISLAND ENTREPRENEURSHIP A landmark study in the late 1980s was carried out by the East-West Center in Honolulu, Hawai’i to research the economic contribution of entrepreneurs in the Pacific region (Hailey, 1987). Some 200 entrepreneurs in each country were interviewed using standardized questionnaires and regional workshops were held, providing some of the 33 earliest insights into the challenges faced by indigenous business owners in the Pacific. The most significant challenge is geographic isolation and fragmentation which makes it more difficult to get a consistent supply of raw materials, increases freight costs and can make marketing more complex. Indeed Gibson (2007, as cited in J. Gibson, 2010, p. 7) has ranked Samoa as the 207th least economically accessible country out of 219 countries. This is calculated in terms of distance to other countries and weighted in terms of GDP. A small domestic market with little available cash, means entrepreneurs need to look further afield for potential customers. Under capitalisation, limited assets, low turnover and poor cashflow result in little opportunity for capital accumulation and reinvestment (Hailey, 1987, p. 35). Further studies have reiterated the significance of these issues (Briscoe, Godwin, & Sibbalkd, 1990; Cahn, 2006; Croulet, 1988; Saffu, 2003; Shadrake, 1996). Croulet (1988) added that the government was regularly cited as the biggest obstacle to success, often overlooking indigenous entrepreneurs altogether and implementing restrictive policies such has high import tariffs, export levies, and pricing regulations. Briscoe et al. (1990) completed this list with further challenges being a lack of information and data, coupled with a lack of technical know-how. Many recognized that these issues are compounded in more remote and rural areas (Cahn, 2006; Hailey, 1987) where it can be virtually impossible to receive any support or training. Warehouses, repair technicians and regular transport services simply do not exist. A lot of lateral thinking is required to make an economic enterprise successful in a rural area where locals have little cash to spend and getting your products closer to a market is very costly. Natural disasters in recent years have highlighted the environmental vulnerability faced by Pacific Island countries. The devastating tsunami in 2009, followed by the cyclone in 2012, caused unprecedented destruction of Samoa’s infrastructure and damaged its reputation as a safe tourist destina