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EXTRACT ONLY

Women’s Enterprise and Access to Finance What exactly is the problem?

A dissertation submitted in part-fulfillment of the requirements for the Degree of Master of Business Administration of the University of Warwick

Lorraine Morley September 2008 Word Count: 18,256


CONTENTS …………………………………………………………………………

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EXECUTIVE SUMMARY …………………………………………………………

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1.0

INTRODUCTION ……………………………………………………….

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2.0 2.1 2.2

LITERATURE REVIEW Early period research – a focus on the male as norm ……………………… An academic subject worthy of research – women’s enterprise finds a sense of identity ……………………………………………………………. Contemporary research – a move towards how not if gender affects enterprise …………………………………………………………………... Social construction of women’s enterprise ………………………………... Non-financial entrepreneurial capital ……………………………………… Perception is reality – perceived access to finance ………………………... METHODOLOGY Aims of the study ………………………………………………………….. A description of the methodology …………………………………………. The strategy behind a mixed-method investigation ……………………….. Positivistic – the quantitative element ……………………………………... Phenomenological – the qualitative element ………………………………. EMPIRICAL INVESTIGATION AND INITIAL RESULTS OF THE RESEARCH Summary quantitative results ……………………………………………… Summary results for opinion ranked questions ……………………………. Summary results for qualitative components of questionnaire ……………. Summary results from qualitative components of telephone interview …… FURTHER ANALYSIS OF THE EMPIRICAL AND PHENOMENOLOGICAL INVESTIGATIONS Access to finance …………………………………………………………... Non-financial capital ………………………………………………………. The gap between perception and reality …………………………………… Social Network Theory and the research sample ………………………….. Personal Construct Theory and the research sample ………………………. Results and interpretation of the PCT analysis ……………………………. DISCUSSION ON THE MERITS OF THE PROJECT The premise starting to emerge ……………………………………………. Views of women extracted from the narrative …………………………….. Evidence of self-serving bias? ……………………………………………... Scoping out a new theory ………………………………………………….. The implications for women-enterprise owners …………………………… RECOMMENDATIONS Women enterprise-owners ……………………… ………………………… Women’s networking groups ……………………………………………… CONCLUSIONS Women-only business networks …………………………………………… Mixed-gender networks ……………………………………………………. Positions of influence ………………………………………………………

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ACKNOWLEDGEMENTS ………………………………………………

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REFERENCES ……………………………………………………………

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2.3 2.3.1 2.3.2 2.3.3 3.0 3.1 3.2 3.3 3.3.1 3.3.2 4.0 4.1 4.2 4.3 4.4 5.0 5.1 5.2 5.3 5.4 5.5 5.5.1 6.0 6.1 6.2 6.3 6.4 6.5 7.0 7.1 7.2 8.0 8.1 8.2 8.3

APPENDIX

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A.1 A.2 A.3 A.4

Frequency distribution of quantitative results ……………………………... Measurements of variability and central tendency for opinion ranked questions …………………………………………………………………… Free-text box comments from e-questionnaire …………………………….. Analysis of interview questions using concepts of PCT …………………...

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“It’s a perception as much as anything else. If you go out expecting something to happen you are quite likely to meet it.” Woman enterprise-owner Marine engineering


EXECUTIVE SUMMARY

The question of whether women have more difficulty in accessing finance for their business in comparison to men has been a main theme in the research studies associated with women and enterprise since the mid 1980s. Initial conflicting results from the early research have settled, in more recent times, on the view that there is little, if any systematic discrimination towards women when they apply for finance. Investigation into the financial applications of the sample of women business owners used in this research backed up the prevailing notion that women’s applications for finance are accepted and treated in a way that is typical for small and medium sized firms as a whole. Having established this point, further research was undertaken on the same sample of women business-owners to gauge their perceptions of how they and other women were treated by their banks compared to men. This notion of perceived understandings versus the reality of research outcomes is a topic of developing interest in the research community at the present time. Better understanding of the role perception plays, may help explain why the anticipated increase in start-up rates of women’s businesses has not materialised. The research was undertaken with a small sample of twenty women enterpriseowners about whom factual information was gathered on their businesses, educational and professional backgrounds and business finance activity with their banks. A sub-sample of this group was given short telephone interviews to explore how the perceptions of their own relationship with their bank differed to how they perceived other women were treated. The narrative from these telephone interviews was analysed using a basic form of Kelly’s Personal Construct Methodology and a number of tentative patterns and themes started to emerge; women’s networks were seen as very supportive and friendly, at the expense, it appeared, of doing business or developing the kind of dense weak-tie connections that are helpful at start-up or growth cycles of a business. Networking was seen as a forum to air problems that women were experiencing but these problems were not necessarily contextualised or substantiated. Other women in the network might corroborate problems through a sense of being supportive rather than from the position of their own empirical experiences and so problems could take on an air of reality or fact from a base of little certainty. The strong-tie model of women-only networks served to allow for the easy transmission and perpetuation of these types of stories that in turn could become entrenched beliefs or ‘truths’. Women owners who operated larger businesses in the sample tended to avoid or minimise their exposure to women-only


networks, finding mixed-gender networking more positive and materially useful for the businesses. There was a belief from these women business-owners that mixedgender networking and training seminars “lifted the bar” in terms of the quality of input and value of the connections. This research constitutes a small sample of women business-owners and it is recommended that further empirical studies are undertaken on this subject to clarify the findings, but it suggests that women-only networks could be one of the sources where perceptions are created and perpetuated. Whilst this might be helpful where the perceptions created are positive and constructive towards women’s enterprise and start-up, there is research to suggest that women are ‘generally more pessimistic and risk averse than men [when it comes to starting businesses] and tend to believe myths’ (Allinson et al, report for SBS 2005). On this basis, due consideration should be give to ensuring that the women-only networks which are designed to provide and equip nascent and would-be women enterprise owners with skills and support are not the very same source of myths and beliefs that undermine their success.

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INTRODUCTION

Much focus has been placed on the development and growth of entrepreneurship within the UK and particularly entrepreneurship and enterprise opportunities identified and pursued by women. A wide range of public policy initiatives and different forms of support at both the national and regional level have been devised and implemented with the express objective of increasing female self-employment and women-owned businesses. This comes as a direct consequence of the recognition of the economic importance that future women business owners represent. The impressive attainment and sharp growth of the share of female self-employment within the US is often alluded to and used as the benchmark for the UK’s own domestic aspirations for female-owned business growth. Yet women-owned enterprises account for only 14% of UK businesses (BERR, 2006) and the female share of full-time self-employment at 17.5% has remained more or less constant for the last twenty years (Marlow and Carter, 2004: ONS, 2005). Nine out of ten women-owned businesses fall into the category of ‘micro-business’, employing fewer than ten people. Perhaps the most telling measurement overall,


however, is the TEA rate (Total early-stage Entrepreneurial Activity rate) which, at 3.9% of the total working age population of women, is half that of men (Carter, 2006). This infers at the present moment there has been no long term culture shift in the perception of self-employment or entrepreneurship as a desired option for women specifically and UK Plc more generally. Given that there is a broad church of business support systems available for both nascent and established enterprises, a notable proportion of which is targeted specifically at women, and that the oft cited notion of systematic discrimination against women’s ability to access start-up finance has been largely disproved (Birley, 1989; Coleman, 2000; Marlow & Carter, 2005), there clearly remains one or more barriers or impediments that are precluding the sustained and embedded development of a pattern of growth for female enterprises in the UK. This paper seeks to identify some of the obstacles, real or perceived which continue to shape the decision making process used by women in determining whether or not to start or grow a business and whether the reality/myth of difficulties for women in raising capital has truly been put to rest. The results of this research will add to the evolving knowledge and understanding of what encourages or discourages the development of women’s enterprise and will provide a better understanding of some of the nuances associated with the mechanisms within it. The research will take a multi-method approach combining three strands: 1) a review of the extant academic literature and studies surrounding women’s access to finance; 2) a fixed design survey questionnaire involving the collection of quantitative data from a random selection of women enterprise owners and; 3) a small series of semi-structured telephone interviews designed to build on and test the results from the survey and capturing qualitative data for further analysis. The following literature review will consider the key themes associated with female enterprise and its evolution. This will identify the continuing challenges which prevail in this sector in the UK and provide a framework for the research questions. Following the literature review is a description of the methodology used in the study and a framework for tackling the issues raised during the empirical investigation. Summarised results of the empirical investigation (the main body of the data is contained in the appendix), provide the starting point for further in-depth analysis performed as a result of the findings and which form a substantial part of the thesis. This analysis section considers what results are of interest in relation to the literature


and considers how the results might impact on the recommendations which will be made later. At the end of the paper are an overview of the project from an academic point of view and a discussion of any new knowledge in the light of this particular practical investigation. The final sections make recommendations which take into account the relative strength of the data and data collection methods before making some final conclusions, a critique of the findings together with some suggested areas for further research.


Women's entreprise and access to finance  

Extract from the research findings of an MBA dissertation. Further research on the perceptions of discrimination is being undertaken and a...

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