cross tabulation analysis of women and men entrepreneurs in the

1CROSS TABULATION ANALYSIS OF WOMEN AND MENENTREPRENEURS IN THE INFORMATION TECHNOLOGYSECTOREren Ozgen, Troy University, Dothan CampusABSTRACTThere has been limited research into gender differences in opportunity recognition,particularly in technology sectors, where women are underrepresented. Previous researchrevealed that social sources of information are important sources of information inentrepreneurial opportunity recognition. To date we do not know whether women and menentrepreneurs vary in their reliance on these sources of information in opportunityrecognition in technical fields. In this paper cross tabulation analysis was performed tofind out whether there are significant differences between men and women entrepreneurs intechnology domains regarding their perceptions of the role of these sources of informationin opportunity recognition. The results indicate that within gender more women than menentrepreneurs perceive the importance of social source of information in identifying newpossibilities that lead to new ventures. The implications and future research avenues werediscussed.OPPORTUNITY RECOGNIITION AND WOMEN ENTREPRENEURS INTECHNOLOGYOne of the most elusive topics in entrepreneurial research is to discover howopportunities are discovered and what the consequences are for firm formation (Shane andVenkataraman, 2000). Although considerable research has been done on opportunityrecognition (Hills, Lumpkin and Singh, 1997; Singh, 2000; Shane, 2000; Baron, 2003),research into gender differences in opportunity recognition is limited. We need to learnmore about how women recognize entrepreneurial opportunities and how they differ, ifthey do, from men in recognizing opportunity. A better understanding of how womenrecognized opportunities and what influence that recognition has on firm formation maymake it possible for more women to become successful entrepreneurs and therebycontribute to their economic well being and to the nation’s economic growth.The NWBC (2003) and Center for Women’s Business Research, CWBR (2003)report that despite the fact that women entrepreneurs are entering technology sectors at afaster rate than ever before, the largest share of independent women owned ventures is stillin the service sector with 53% of firms in services, 16% of firms in retail trade and 9% infinance, insurance and real estate. To date research on the differences between men andwomen business owners as to how they recognize business opportunities and form firms isinconclusive due to the lack of comparative studies that control for industry sector andother factors (Brush, Hisrich, 2000).1

2SOCIAL SOURCES OF INFORMATION IN OPPORTUNITY RECOGNITIONAn extensive body of research on opportunity recognition indicates that socialsources of information constitute an essential part of opportunity recognition (Aldrich,1999; Hills, Lumpkin and Singh, 1997). Previous studies found that social network ties(Archdivili, Cardozo, & Ray, 2002) such as informal network of acquaintances (Floyd andWooldridge, 1999), reliance on mentors (Ozgen and Baron, 2007), participation inprofessional forums (Ozgen and Baron, 2007) are important social sources of informationand play a role in opportunity recognition. This study will expand prior studies and furtherexamine whether there are significant differences between men and women entrepreneursin technology domains regarding their perceptions of the role of these sources ofinformation in opportunity recognition. From a conceptual standpoint, to be able to answerthe question “how do people discover opportunities?” it may be useful to consider genderdifferences regarding the role of various social factors in the recognition of opportunities. Itwas reasoned that by examining gender differences in opportunity recognition, we mightget a clearer understanding of one of the principal activities in company formation.Gender differences in informal network of acquaintances in the industryInformal network of acquaintances in the industry, such as customers, clients,manufacturers, suppliers, investors and employees of financial institutions, allowentrepreneurs to enlarge their knowledge of opportunities and to gain knowledge (Floydand Wooldridge, 1999). Prior research found the importance of informal network inidentifying new venture ideas and recognizing and screening possible venture opportunities(Hills, et. al, 1997; Singh, 2000). Social capital theory suggests that network ties providepotential or possibilities of access to resources and knowledge that is critical toentrepreneurial pursuits. Entrepreneurial activities may be sourced in the knowledge ofindustry or knowing someone who knows the industry (McMullan and Long, 1990).Prior empirical research suggested that women business owners have less executiveexperience and have fewer financial assets than their male counterparts when they start upnew ventures (Carter and Allan, 1997). Peacock (2001) reported that, according to theNFWBO survey women business owners (23%) have less managerial experience than menbusiness owners (50%). In the U.S., men hold three quarters of executive and managerialpositions in Information Technology (Hopkins, 2003). To compensate for this lack ofmanagerial and executive experience successful women business owners (60%) consultwith outside sources of information more than their male counterparts (44%) (Schatz,2001). Moreover, according to CWBR (2003), 60% of women business owners intechnology sector use social network ties in technology sector compared to 40% of womenbusiness owners in other sectors on business management and growth issues. Therefore,women who move into technology sectors may need to develop a business support networkthat helps them in the exploitation of opportunities. This suggests the following hypothesis:2

3Hypothesis #1: Women entrepreneurs in technology domains perceive the influenceof informal network of acquaintances in the industry more than men entrepreneursin their recognition of entrepreneurial opportunities.Gender differences in reliance on mentorsMentors refer to people who take an active role in helping their protégés and guidethem technically and professionally by providing advice, guidance, knowledge andcoaching (Boyd and Vozitis, 1994). Mentors can provide “multiple perspectives” in one’sentrepreneurial pursuits (Kuratko and Welsch, 2001: 180) and help their protégés inincreasing innovation and creativity (Ragins and Cotton, 1993). Researchers found thatmost successful entrepreneurs have or had a mentoring relationship (Cachon and Cotton,1997). Here in this paper we suggest mentors would include, among others, current or pastcustomers, current or past suppliers, employees of financial institutions, and others.Previous research suggests that the broader entrepreneurs’ informal networks, the morelikely they are to gather relevant information (e.g., Johansson, 2000).Prior researchers have shown that women entrepreneurs use more external businesssupport, such as advice, guidance and coaching, compared to men entrepreneurs (Mitchelland Weller, 2001). For instance, according to NFWBO (1998) study, 46% of womenentrepreneurs versus 37% of men entrepreneurs reported the role of having a mentor or rolemodel in their entrepreneurial pursuits. In a similar vein, previous studies identified somecritical factors, such as less business experience, may affect women’s tendency to pursueentrepreneurial activities (Chell, 2002; Mitchell and Weller, 2001). Thus, grounded in priorempirical research, we assume that women entrepreneurs may show more willingness thanmen to seek business guidance, advice and coaching from mentors and this may be tocompensate for their lack of access to knowledge and positions that put them in the heart ofthe action about new technologies and opportunities. This leads the following hypothesis:Hypothesis #2: Women entrepreneurs in technology domains perceive the influenceof exposure to mentors more than men entrepreneurs in their recognition ofentrepreneurial opportunities.Gender differences in participation in professional forumsExposure to information coming from various sources leads to creativity,innovation and new knowledge and is found significantly related to opportunity recognition(Julien and Vaghely, 2001). The frequency and intensity of exchanged information is atrigger in forming new ideas regarding with new venture possibilities (Fiet, 1996).Entrepreneurs also seek information about developments in their field through more formalchannels than their industry networks (e.g., Bhave, 1994). For the purposes of this study wewill refer participation of professional forums as communication coming from variousformal sources such as, technical publications, journals, workshops, seminars, conferencesand training programs.3

4According to NFWBO’s (1998) research, 85% of women give greater importance totraining in business related issues compared to 78% men. Therefore, women entrepreneursin technical fields may consider participation in professional forums as an importantelement in their entrepreneurial pursuits and recognition of opportunities more than men inorder to compensate for the weaknesses coming from their lack of technical or businesstraining. This suggests the next hypothesis:Hypothesis #3: Women entrepreneurs in technology domains perceive the influenceof participation in professional forums more than men entrepreneurs in theirrecognition of entrepreneurial opportunities.Figure 1 presents an overview of the conceptual framework.FIGURE 1A model of gender difference in entrepreneurial opportunity recognitionReliance on informalNetwork ties in theindustryGenderOpportunityRecognitionReliance onMentorsParticipation inprofessionalforumsMETHODSSampleA sample was chosen from the information technology industry. Potentialparticipants were identified from the One Source Corp Tech Profiles Database (OSCT,2002), which contains information on technology-based firms and from membership listsof various IT associations. The initial questionnaire was pilot tested on 29 founders of newventures in the information technology sector. The final sample constituted 201 individualswho founded information technology companies in the United States.4

5MEASURESOpportunity RecognitionThe five point three item “opportunity recognition” scale from Singh (2000).Measures were: “I see potential new venture ideas all around me.” “I have special alertnessor sensitivity toward new venture opportunities.” “Recognizing opportunities come verynatural to me”. (alpha=.8)Informal network of acquaintances in the industryFive point three item measures were adopted from Reynolds (1999). The measureswere contacts or discussions with potential or existing customers, investors, suppliers,distributors or manufacturers. (alpha= .77)MentorsThe present research scale developed the three five point items. The measures werehaving a mentor who provides advice, support, guidance, knowledge and coaching inopportunity recognition. Five point Likert scale measured the variable (alpha=.85)Participation in Professional ForumsThe present research scale developed the three five point items. The measureswere: getting information or feedback from instructional seminars, workshops, trainingprograms and technical publications. (alpha= .82).Control VariablesIndividuals’ age, education (Davidsson, 1991; Shepherd and DeTienne, 2001) andfirm location (Keeble and Walker, 1994; Armington and Acs, 2002) were included ascontrol variables.Cross TabulationRESULTSCross tabulation analysis was conducted to show the relationship between male andfemale entrepreneurs and how they differ in recognizing entrepreneurial opportunities.Performing cross tabulation with continuous data that has been categorized providevaluable information on how genders vary in entrepreneurial opportunity recognition in ITindustry.Although both men and women entrepreneurs agreed the importance of informalnetwork ties in the industry, within gender relatively more women (63.3%) than men5

6(52.9%) perceived the importance of informal network of acquaintances in the industry inentrepreneurial opportunity recognition. Results supported hypothesis # 1 indicating thatwomen entrepreneurs perceive the influence of informal network acquaintances in theindustry more than men entrepreneurs in their recognition of opportunities. CrossTabulation results were significant (p

7Yet despite these limitations the findings offer several practical and theoreticalcontributions to the opportunity recognition research.Practical ImplicationsThe results indicate that a great deal of women’s entrepreneurial opportunityrecognition in technology sectors may be spread through social messages in network tiesand participation in professional forums, (training programs, etc.) compared to menentrepreneurs. Thus, in the short and medium terms, it may be necessary to encouragewomen in technology to join various industry associations, attend industrial workshops,read technical publications and develop social network ties and find mentors. For instance,mentoring programs in which successful entrepreneurs work with potential womenentrepreneurs could help in recognizing potential entrepreneurial opportunities. Joining inprograms that facilitate peer interaction may also assist women in developing networkingand opportunity recognition skills. Programs that include the match up of mentors with theparticipants may provide on-going support to potential women entrepreneurs in networkingskills and assisting them in identifying and finding various resources that would help themto recognize opportunities.The findings may help to empower potential women entrepreneurs in their access toresources that lead them to the recognition of opportunities. Symposia, conferences andevents that offer potential women entrepreneurs an opportunity to meet with otherentrepreneurs in technology sectors may also be helpful. The findings support thedevelopment of enabling resources, which will allow women to gain access to knowledgeparticularly in recognizing opportunities that would help empower them in theirentrepreneurial pursuits.Theoretical ImplicationsThe primary contribution of this study lies in the knowledge of the differentialpatterns between men and women entrepreneurs regarding their perception of the role ofinformal network ties, exposure to mentors and participation in professional forums inopportunity recognition. From a conceptual standpoint, to be able to answer the question“how do people discover opportunities?” it may be useful to consider gender differencesregarding their perception of the role of various social and environmental factors in therecognition of opportunities. Future researchers may use the concepts presented here togenerate a robust theory of entrepreneurship.Future avenues of researchTechnology markets are complex in nature highly intensive and exist under rapidlychanging technological conditions. As the technical status of the environment gets morecomplex and harder, the entrepreneurs need more information. Therefore, understandingthe process by which new ventures emerge in technology domain is clearly one of the keychallenges for entrepreneurship researchers. To better teach opportunity recognition to7

8prospective women entrepreneurs in technical sectors, it is necessary to study this processfurther. In the future focusing on women with technical degrees and their propensity ofstarting new ventures in technical fields seems to be a study worthwhile. The NationalScience Foundation (NSF, 2002) reports that women granted science and engineering(S&E) degrees, excluding social sciences, account for 15% of all technical degrees in U.S.According to an NSF (2002) report, among the total self-employed people with technicaldegrees in the business sector, women are less likely than men to be employed in technicaldomains, (35.1% of men versus 2.9% of women self employed in engineering relatedfields) and 24.7% of men versus 12.6% of women self employed in computer/math sciencerelated sectors. Therefore, another further avenue of research may be a comparative studyof men and women with technical degrees and the differences between them inentrepreneurial opportunity recognition and starting new ventures in technology. Suchstudy is very timely and helpful in our understanding the challenges women face with instarting new ventures in technical fields.8

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