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Entrepreneurial Advantages and Disadvantages of Belonging

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The article analyzes the influence of religious network structures on entrepreneurial success. Members of the religious community of the Bohras in Tanga, Tanzania, are contrasted with entrepreneurs of other ethnic origins. It is shown that the religious network provides, through a loan scheme, the opportunities to start and run a business successfully. In this respect, the importance of the Islamic business ethic is underlined. Finally, the macro-economic effects of the network are outlined.
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GeoJournal 46: 129–134, 1998.
© 1998 Kluwer Academic Publishers. Printed in the Netherlands.
129
Entrepreneurial advantages and disadvantages of belonging
Henrik Egbert
Department of Law and Economics, University of Bayreuth, 95440 Bayreuth, Germany
E-mail: henrik.egbert@t-online.de
Received 14 July 1998; accepted in revised form 16 September 1998
Key words: Bohras, Dai, entrepreneurialnetwork, Tanga, Tanzania
Abstract
The article analyzes the influence of religious network structures on entrepreneurial success. Members of the religious
community of the Bohras in Tanga, Tanzania, are contrasted with entrepreneurs of other ethnic origins. It is shown that the
religious network provides, through a loan scheme, the opportunities to start and run a business successfully. In this respect,
the importance of the Islamic business ethic is underlined. Finally, the macro-economic effects of the network are outlined.
Introduction
The aim of the research was to analyze the positive and
negative effects of social networks on the economic suc-
cess of entrepreneurs and their enterprises, respectively. In
the process of economic development I consider the entre-
preneur as a central figure. The developed and developing
countries in Europe, North America and Asia have shown
that the entrepreneur is the agent of economic development.
He is ‘embedded’ (Granovetter, 1985, p. 481) in social con-
texts. He may partly instrumentalize his belonging to an
institution but, on the other hand, his belonging may also
turn to be a major constraint, both for himself and for his
enterprise.
This article focuses on the influence of the structures
of a religious network on entrepreneurial success. I will
try to answer two questions: (a) which underlying social
and economic structures make one group of entrepreneurs
more successful than others, and (b) which are the macro-
economic effects of the described network? The examined
group of entrepreneurs is the Bohras. They are a segment of
the Asian population in East Africa.
Research methods and sampling
The criteria of including entrepreneurs in the sample were:
they had to be of non-European origin, i.e. Africans’,
Asians’ and Arabs’. They had to be owners of an enter-
prise. Managers were only additionally interviewed. The
minimum size of an enterprise was five employees in 1997.
The enterprise had to be in the production or service sector.
Questionnaires, structured and open interviews were used.
Research was conducted during two stays in the Tanzanian
coastal city of Tanga in May 1997 and from August to
December 1997.
First, I will briefly outline the historical and religious
background of the Bohra community. Second, the Bohra
entrepreneurs in the town of Tanga will be discussed. Based
on interviews and the analysis of literature, the structures of
their network economy will be interpreted. Third, quantita-
tive analysis will be used to show that Bohra entrepreneurs
are economically more successful than other entrepreneurs
in the city. Fourth and last, the importance of the concerned
network structures for the macro-economic level will be
discussed.
Historical and religious background
The split of the Shi’a after the death of the Prophet Mo-
hammed was only the first of many schisms within the
Shi’a. Questions concerning the succession of the Imam
were the main reason. After the death of the sixth Imam
(765), the Isma’ilis (7er Shi’a) split from the more orthodox
Ithna’asharies (12er Shi’a). During the reign of the Fatimid
Caliphate, again a schismoccurredabouttheImam‘ssucces-
sion (1094). The two Isma’ili groups of the Nizari Isma’ili
and the Mustalian Isma’ili formed. After the destruction of
the Fatimid Caliphate, the latter group was established in
Yemen. Since 1167 the Mustalian from Yemen promoted
the conversion of the population in Northwest India, namely
in the Gujarat. The conversion was especially successful
among the Bohras, a traditionally Hindu trading community.
The head of this community is the Da’i-al-Mutluq.
1
He
represents the Imam in seclusion and is the highest reli-
gious authority on earth for the Bohras. Moreover, for the
Bohras he is also the highest authority in all social matters
(Abdulhussein, 1995b, p. 238).
However, the succession of the Da’i did not remain un-
questioned.Repeatedlyschisms occurredamong the Bohras.
1
From now on I will refer to him as Da’i.
130
With the growing importance of the Asian presence in the
community – especially in economic affairs – the residence
of the Da’i was transferred from Yemen to Ahmedabad in
1567. After the death of the 26th Da’i (1588) the community
split into the Da’udi Bohras (living in Gujarat) and the Sul-
manii Bohras (living in Yemen). From then on, both sects
followed different lines of Da’is (Amiji, 1975, pp. 28-33;
Daftary, 1990, pp. 257–61; Lokhandwalla, 1955; pp. 117–
24). In the following, I refer only to the Da’udi Bohras
because only followers of this group live in Tanga. The
Da’udi Bohras are the largest group among all Bohras and
their number world-wide is estimated between 0.5 million
(Daftary, 1990, p. 314) and 1 million (Abdulhussein, 1995a,
p. 225).
In history, the Bohra community suffered persecution.
The Bohras often had to practise their religion secretly. Ad-
ditionally, esoteric elements in their religion are the ground
for estrangement from other Muslim religious groups. Both
points are reasons for a kind of exclusiveness of the group
and a tightly knit network among its members. This does
not remain without influence on the economic development
of the community.
In the following, the terms ‘Bohras’ and ‘Bohra com-
munity’ are used for the Bohras in general, i.e. the world
community.When I refer to the part of the Bohra community
which lives in Tanga, I use the term ‘local community’.
Bohras in East Africa
Bohras were among the first Asian merchants who period-
ically made trading expeditions to East Africa. In order to
coordinate their trade activities more efficiently, they es-
tablished permanent settlements in the East African coastal
towns at the beginning of the 19th century. Famine in the
Gujarat probably contributed to a considerable emigration
process. The increasing importance of the Indian Ocean for
the world economy and the shift of political interests of Eu-
ropean states towards this region at the middle of the 19th
century had a stimulating effect on the Bohra settlements.
‘Bohra settlements received great impetus in the middle of
the nineteenth century as a result of the southward shift of
economic interest in the Indian Ocean trade area, first with
Omani Arabs and later by British, American and German
merchants. (Amiji, 1975, p. 35). The establishing of a
British consulate in Zanzibar (1841) and the shift of the res-
idence of the Sultan Seyyid Said from Muscat to Zanzibar in
1840promotedtheeconomicactivitiesof the Asiansthrough
improvedsecurity: as British subjects the Asians had protec-
tion by the colonial authorities as well as by the Sultan who
guaranteed religious freedom for Hindu and Shiite traders
and financiers. The Sultan needed the financial capital of
the Asians to extend and to consolidate his power in East
Africa. After the establishing of a local Bohra community
in Zanzibar as the entrepôt for East Africa, Bohras started
to settle in all coastal towns and among these was Tanga.
Amiji (1975, p. 39) writes: ‘Most of the Bohras in Tanga
came from Kathiawar. In 1875 Sir John Kirk noted twenty-
two Bohra families and six Hindus in Tanga. The number of
Bohras was much larger because each household consisted
of wife and family while the Hindu lived alone.
An economic advantage for the Asian communities was
that they settled in separate regions so that each region was
economically dominated by one community. Through this
separation of spheres, competition between the communities
was avoided and made the exploitation of local monopolies
possible.
When the Arabic influence was pushed back during the
German colonialism, the Germans were also dependent on
the Asian merchants as middlemen to the African popula-
tion. The Germans used the existing economic structures
dominated by the Asians to establish and extend their power
in German East Africa.‘Duringthe German era, 1884–1918,
Bohra businesses (...) acted as agents for leading German
firms and missionaries. (Amiji 1975, p. 39). After the end
of the First World War the Asian emigration from Gujarat
to East Africa stopped. Since the 1950s more and more
Bohras have left East Africa. Especially after completing
their studies in Great Britain, Canada and USA they set-
tle there. Migration takes also place in East Africa. Bohras
from Tanga, for instance, migrate to Arusha, Nairobi and
Mombassa. The number of the Da’udiBohras in East Africa
is stated to be 15000. Amiji refers to a census of the local
communities in 1967 (1975, p. 27). Daftary (1990, p. 314)
speaks about 20000 Bohras. The Tanga community consists
today of about 300 families or about 1350 people. This is
equivalent to 1/3 of the Asian population of the city or about
0.5% of the total population. After Dar-es-Salaam, Mom-
bassa and Nairobi, presently it is the fourth largest Bohra
community in East Africa.
Traders and Producers
In the economyofTanga, the businesses of thelocal commu-
nity play an importantrole. It is noticeableat first glance that
many shops are run by Bohras, since their clothing, the way
of hairdressing and other symbols indicate their belonging
to the community. In fact, trade is the most common en-
trepreneurial activity among them but some are additionally
active in the production sector. An etymological meaning of
the word ‘Bohra’ comes from an old Gujarati meaning, i.e.
to trade or trader (Daftary, 1990, p. 298). This explanation
is also given by the Bohras in Tanga. Principally, within the
Bohra community there exists a positive attitude toward en-
trepreneurship. Self-employment is regarded as a value and
as an aim to achieve. Bohras strive to own a business, often a
shop. Wage-employmentis regarded as dependenceon other
(non-Bohra) people. It is only accepted if the employer is a
family member, or if one‘s own business already exists and
a wage-employment brings additional income.
The present 52nd Da’i of the Bohra community,
Sayyidna Muhammad Burhanuddin, who is residing in
Mumbai, exercises intensiveinfluenceon theentrepreneurial
activities of the communities‘ members. He emphasizes an
Islamic business ethic whose essence is in rejecting inter-
ests and in supporting communal loan schemes. Because
of this rejection of interests, the Bohras refrain from tak-
ing bank loans. An alternative to loans provided by banks
131
are loans from the religious community itself. These loans
are interest-free (Abdulhussein, 1995b, p. 237). Those who
take them have to follow the strict social obligations of the
community.
The Institutionalized Loan Scheme
According to non-Bohra,the economic success of the Bohra
entrepreneurs is due to the possibility to receive interest-
free loans from their community. The decision whether an
applicant will receive a loan or not depends on two com-
munity committees. One committee deals with loans below
1 million Tanzanian Shillings (about 1500 USD in 1997),
the other with sums above 1 million Tanzanian Shillings.
The borrower has to meet certain conditions in order to re-
ceive the loan. He has to prove his trustworthiness, i.e. two
bailsmen have to sign the application form and to deposit a
cheque with the committee (every community member can
only be a bailsman for two other members). The borrower
must have an account at the committee in which he has de-
posited half of his previous yearly profits. Finally, he has to
announce the reason for what purpose he will use the loan.
The committees provide loans preferably for launching a
new business. For the enlargement of an already established
company, loans are rather difficult to obtain. It seems that in
the present economic crisis of the country this loan scheme
has reached its limits because the demand is high.
The possibility to receive loans provided that a bails-
man is available has advantages in trading. For instance,
Bohras can obtain credits for business transactions in cities
other than their own in case that a local community mem-
ber functions as a bailsman. For the acquisition of products
this bears advantage in competition with businessmen who
do not operate within a similar national (and international)
network.
What are the sources of the funds? The yearly profits
which are saved on accounts at the committee are the ba-
sis of the funding. Besides, there are voluntary payments to
the community, as well as religious payments (Amiji, 1975,
p. 46). Additionally, the zakat as a tax on the profit has to
be paid to the community. The zakat is 2.5% of the yearly
profit. The local representativeof the Da’i, the Amil, collects
the zakat from those families of the community which are
running an enterprise. In case the enterprise makes a loss,
the Amil checks the business accounts and the owner does
not have to pay the zakat. However, he is expected to give
voluntary contributions to the community. It could be sur-
mised that the Amil and the businessmen arrange lump sum
payments since it is highly problematic to figure out the real
profits. If community members refuse to pay the zakat,then
the local community exercises pressure on those unwilling
to pay (Amiji, 1975, p. 45). Partly, the collected money is
sent to the Da’i in Mumbai and is no more available for the
community.
The financial security system of the community covers
also the private sphere. Financial assistance is provided for
weddings; for the support of widows and orphans an extra
fund exists. The Amil has a central position in this system
because he has to decide on the necessity of a person or
a family. During research it was not possible to get more
information about the exact sources and usage of the funds.
Community members are unwilling to talk about this matter
because non-Bohras may misuse this information to spread
rumours about the community. To sum up, it can be said
that an extensive financial security system supports the local
community members in private and business affairs. This
system is based on deposits, tax payments and voluntary
contributions. The system provides security in situations of
individual hardships.
Inside vs. Outside the Community
Not everyBohra can take advantageof the describedsystem.
The most important precondition is to be a member of the
local community. There are Bohras, however, who do not
belong (anymore) to the local community. The described
system is based on social control. The advantages are re-
stricted to those Bohras who follow the Da’i ‘s rules and
instructions. These include, beside religious matters, pre-
scriptions concerning food, clothing and hair-style of men
and women. This far-reaching regulation of life is not ac-
cepted by all Bohras. If members do not follow the rules
strictly, a conflict with the community arises.
The Da’i‘s power is based on his religious authority and
the structure of the community. The latter is an hierarchical
autocracy with the Da’i at its top. In every major city with a
Bohra community the Amil, who is chosen and sent by the
Da’i, represents the Da’i‘s interests. The Amil is the highest
local religious authority in rank and is in close contact with
the Da’i in Mumbai (Abdulhussein, 1995a, p. 225; Daftary,
1990, pp. 298–99; Lokhandwalla, 1955, p. 127). The Da’i‘s
relativesperiodicallyvisit the localcommunities and on such
occasions they collect the zakat. The hierarchic structure
gives enormous power to the Da’i who can decide on the
treatment of every community member. His most powerful
instrument is the exclusion of community members. If the
Da’i excommunicates a member, then all other Bohras have
to stop social contacts with that person in order to avoid their
own exclusion. This rule counts also for family members.
The social boycott includes the refusal of religious perfor-
mances by the Amil. Through the refusal of a place at the
community‘s graveyard and through the refusal of religious
ceremonies at weddings and burials by the Amil, a harsh
psychologicalpressureis exercisedonthe socially ostracised
person (Lokhandwalla, 1955, p. 124–26). The excommuni-
cated person has the possibility to ask the Da’i for pardon
and to become a member of the community again.
A conflict with the community also arises if a Bohra
neglects his duties in business. In one recorded case, this
internal for the community mechanism of sanctioning was
instrumentalized by a non-Bohra. The case was such that a
Bohra had debts to pay to a Sunni businessman. Despite re-
peated requests to pay, the Bohra refused. Finally, the Sunni
explained the case to the Amil. The latter forced the Bohra
businessman to pay his debt.
Nevertheless, not always does the social boycott and
the fear of it achieve its aim. Despite the restrictions,
Bohras leave the community and live as outsiders with their
132
families. Daftary (1990, p. 313) refers to conflicts in the
community in India as tensions between traditionalists and
reformers. The reformers strive for a limitation of the Da’i‘s
power but not for a reform that aims at changing religious
aspects. Those Bohras of East Africa who have studied in
Europe or North America and who have lived there most
of their lives return with ways of thinking which bring them
into conflict with their communities in East Africa. Since the
structures of the community do not allow to react flexibly to
criticism, part of the well-educated are ostracised.
Data presentation
From a total of 78 questionnaires, 13 were answered by
Bohras. Their enterprises are represented in six branches.
The production of food and soft drinks (restaurants are ex-
cluded) is a major branch and 4 of the interviewed Bohras
work in this sector. Theyare representedalso in the branches
of chemicals, wood processing, printing and metal process-
ing. They are absent in the construction, mining, textile
and transport sectors. In order to compare the Bohras with
other entrepreneurs, three groups are being differentiated.
The first group includes the 13 Bohras. The second group
is formed by ‘other Asians’ (Hindu, Sikh, Catholic, Sunni).
This group includes 17 people. In the third group there are
46 entrepreneursof ‘African’ and ‘Arabic’ origin.
It is also true for the Bohras that the better the educa-
tion of the owner, the larger his enterprise is (regarding the
number of employees). A conspicuously high number of the
Bohras have graduated from European and North American
universities. While 4 of 13 Bohras have a university degree,
only 3 of 65 of the other entrepreneurs have similar degrees.
Economic success
The question whether the Bohras are more successful than
other entrepreneurscan be answered positivelyprovided that
the indicators ‘capacity utilisation’ and ‘change of invested
capital’ are considered.
In the period from 1992 to1997 the capacity utilisation
of enterprises owned by Bohras is higher than of enterprises
owned by other entrepreneurs. More than half of the Bohras
say that their enterprises have a capacity utilisation more
than 60% compared with a quarter of the ‘other Asians’ and
only one tenth of the African’/‘Arabic’ group reaches this
level.
A second indicator is the change of invested capital in
the period 1992 to 1997. None of the interviewed Bohras
said that his invested capital decreased but 11 out of 13 said
that it increased. From the other groups about 70% give the
same answer.
The Bohra announced that the source for the increase
of invested capital was own capital, especially reinvested
profits.
This raises the question why they use a comparatively
high percentage of their profits for reinvestment. Two rea-
sons could be given: The first reason is that investment into
Table 1. Capacity utilisation 1992–1997.
Owner n Capacity utilisation 1992–1996
<40% 40%–60% >60%
Bohra 13 3 3 7
Other Asians 17 8 7 2
Africans, Arabs 43 15 18 10
Total 73 26 28 19
Table 2. Change of invested capital 1992–1997.
Owner n Change of invested capital 1992–1997
Decreased Constant Increased
Bohra 13 0 2 11
Other Asians 17 0 5 12
Africans, Arabs 46 5 8 33
Total 76 5 14 57
interest-bound assets is forbidden by the Islamic business
ethic. This makes it necessary for the Bohras to look for
alternative investmentopportunities, one of them being rein-
vestmentinto one‘s own company. The second reason is that
half of the profits if not reinvested have to be saved in
the account at the committee. Once the profits are put in the
account, the entrepreneur has no free access to them because
the committeemay use themfor providing loans. This makes
it rather unattractive for a prospering businessman to put
these profits under the committee’s control.
Beside the higher reinvestment rate of profits, two more
aspects indicate that Bohras prefer investment forms which
limit the community‘s access to their capital, at the same
time being in accordance with the Islamic business ethic.
The one is the comparatively high level of education. This
implies a high investment in human capital, which is ex-
cluded from taxation but contributes, in the long run, again
to the community‘s prosperity: a well-educatedentrepreneur
will probably be a successful entrepreneur and will support
the community with comparatively high payments. The sec-
ond one is the high percentage of Bohra entrepreneurs who
own a second and even a third enterprise. 7 of 13 Bohras
own a second company in comparison to only 7 of 18 ‘other
Asians’ and only 9 of 46 ‘African’/‘Arabic’ entrepreneurs.
Starting capital and crisis situations
To be a successful entrepreneur means to be able to over-
come difficult economic situations during the life period of
a company. One of these situations is the foundation of an
enterprise. The possibility to have initial capital is crucial. It
can be said that in fact the Bohra entrepreneurs receiveloans
from their community for financing the founding period. An
interest-free loan scheme has existed since the 1970s. All
enterprises which were founded or taken over by the present
owner after 1970 were examined. 37 entrepreneurs financed
133
their starting capital partly through loans and 7 Bohras were
among them. While none of the 30 other entrepreneurs took
a loan from their religious communities, 2 out of 7 Bohras
did. This number seems to be rather low. In fact, Bohra
enterprises have been existing for a long time (in one case
107 years). These enterprises need loans for expanding the
company rather than initial capital. In open interviews two
more Bohras said that they took community loans for the
expansion of their businesses.
Furthermore, it can be proved that the Bohra entrepre-
neurs receive community help in times of enterprise crises.
In the period 1990–1995 more help was requested than in
the years before. Nine out of 78 entrepreneurs said that they
receivedhelp fromoutside the companyduring this period.3
of the 9 entrepreneurs were Bohras. While 2 of 3 took loans
from their community, noneof the other 6 entrepreneursdid.
It can be summarised that, firstly, enterprises owned
by a Bohra are more successful than those which belong
to other entrepreneurs and, secondly, that Bohra entrepre-
neurs receive financial support from their community, while
non-Bohras do not have this opportunity.
The excluded Bohras
In Tanga there are Bohras who have been excluded from the
community, or who have decided of their own free will to
leave the community. Eleven out of 13 Bohras reply that
they attend the religious services regularly, that is daily or, at
least, weekly. The other two people say that they attend ser-
vices very rarely. On the question how often the interviewee
participates in social activities organised by the religious
community, 9 people reply with ‘often’ and 4 with ‘rarely’.
These 4 include the 2 persons who do not attend services.
While 9 entrepreneurs are in close contact with the commu-
nity, 2 are more estranged and 2 others are excluded from
the community.
In the following, I focus on those two entrepreneurs
who are excluded from the community. Both have university
diplomas from European or North American universities. In
fact, both belong to a comparativelysmall groupof entrepre-
neurs in the city who obtained such degrees. However, other
Bohras have also similar degrees from Americanuniversities
and they are not in a conflict with the local community. In
contrast, their families strongly support the community. A
good education alone cannot explain why Bohras leave their
communities.
What strikesthe observeris that the enterprisesof both of
the excluded Bohras are among the three largest Bohra en-
terprises. An interpretationcould be that with the increase of
the size of the enterprise the dependence on the community
shrinks. Education abroad has consequences: not only that
European or American values are adopted by the people and
make a conflict with the community more probable, but also
that the better education makes a successful establishment
more probable. With the prospering of the company, the
dependence on financial support by the community dimin-
ishes. Additionally, a stay abroad allows the establishing of
business contacts outside the Bohra community. Thus, the
independence of those Bohras studying abroad is obtained
in several ways.
These Bohras who were excluded and partly excom-
municated from the local community criticize neither the
payment in general, nor the amount of money paid to the
community, or to the Da’i, respectively. What is criticized
is the lack of control, the undemocratic decision-making in
the community and the uncontrolled usage of money by the
Da’i.
The importance of the network for the economy
The religious network of the Bohra community has several
positive effects on the development of entrepreneurship in
Tanzania. Micro-economic advantages are based on exclu-
siveness, which is maintained by an internal hierarchy. Eco-
nomic disadvantages are observable on the macro level. The
macro-economic advantages and disadvantages will now be
summarised.
The first advantage is the possibility to receive financial
support in the founding phase of a business. Loans are pro-
vided with extremely favourable conditions. Through the
loan scheme already established entrepreneurs support the
founding of new enterprises. The establishing of new en-
terprises creates employment opportunities dominantly for
African workers. Thus, the macro-economic importance is
the creation of jobs.
A second advantagelies in the financial support for com-
munity members in situations of crises. Especially in times
of economic recession loans from banks bear a high risk due
to high interests. Such loans often bring the enterprise at
the threshold of bankruptcy. Interest-free community loans
can stabilize enterprises in a recession period and preserve
working places.
Thethird advantageis based on anIslamic businessethic.
It supports investments in production and human capital,
while investments in financial assets are not promoted. That
is why profits are channelled into the first two forms of in-
vestment. For the Tanzanian economy both are essential for
the future development. The country suffers deficit of well-
educated entrepreneurs as well as a lack of investmentin the
production sector.
The first disadvantage for the Tanzanian economy is that
the market principle in respect of selecting unprofitable en-
terprises is displaced. Unprofitable (Bohra) companies can
remain in the market while enterpriseswhose owners are not
embedded in similar networks will have to close down. This
applies mostly to African enterprises.
A second disadvantage is based on the exclusiveness of
the community. It is possible to become a member only
through birth or marriage. The economic advantages, thus,
are restricted to a small minority of the population in the
country. Due to its small size, the overall positive economic
effects remain limited. Because of the (ethnic and religious)
exclusiveness of the Bohra community, entrepreneurs of
African origin do not consider the community a successful
economic model which could be applied to their own ethnic
groups.
134
The third disadvantage is the formation of oligopolistic
market structures. This refers rather to the Bohra traders
than to the producers. Barriers for market entry are created
for entrepreneurs who cannot compete with the Bohra. This
makes it more difficult for entrepreneurs to establish in the
market and limits the gains of the market to a small group.
The fourth disadvantage is the capital export through
transfers. A reinvestment of profits on a local or national
scale – for social or business projects – would contribute to
building the regional and national economy. The hierarchic
structure of the community, however, does not allow a local
investment of the profits, this capital is transferred to the
Da’i in Mumbai, instead. This capital export is a loss for
the Tanzanian economy.
Acknowledgements
The research was financed by the Deutsche Forschungsge-
meinschaft (DFG) through a scholarship for the graduate
seminar ‘Intercultural Relations in Africa’, Bayreuth. For
helpful comments on the paper I thank Prof. Dr D. Fricke,
Prof Dr F. Ibrahim, Dr R. Loimeier, G. Fischer and R. Orlik.
I am also grateful to the discussants of the paper at the sem-
inar ‘Citizenship and Issues of Autochthony in Postcolonial
Africa Changing Modalities of Exclusion and Inclusion’,
8–10 June 1998, Leiden, The Netherlands.
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... There are many entrepreneurial communities in the subcontinent region, which are known for their economic affluence, religious orientation, a high degree of social cohesion and philanthropic character (Dobbin, 1996;Egbert, 1998;Menning, 1997;Papanek, 1972). Memon, Delhiwala, Chinioti, Bohri and Ismaili communities are some of the prominent examples. ...
... This tendency "to include a range of socio-economic classes are extremely significant aspects of the operation of these traditional social groupings" (Papanek, 1972, p. 30). Bohra entrepreneurs also create employment opportunities for African workers by creating new business enterprises (Egbert, 1998). Similarly, in Lower Galilee (Israel) the workers who have a family relationship with the Arab entrepreneurs often accept jobs at lower salaries, which helps the business owners to optimize their cash flows (Sofer and Schnell, 2005). ...
... Similarly, in Lower Galilee (Israel) the workers who have a family relationship with the Arab entrepreneurs often accept jobs at lower salaries, which helps the business owners to optimize their cash flows (Sofer and Schnell, 2005). Egbert (1998), who has written about the Bohra community residing in Tanzania, narrates that Bohra entrepreneurs have access to interest-free loans with extremely favorable terms. These loans are provided from the pool of funds created through the contributions from well off members of the community and are managed by the top religious authority in the Bohra community. ...
Article
Purpose: There are many entrepreneurial communities in the Asian subcontinent which are known for their economic resilience and religious orientation but have received limited attention in extant literature. These communities include, Memon, Delhiwala, Chinioti, Ismaili, and Bohri, which have been persistent in keeping their members economically stable since many centuries, while also retaining their religio-sociocultural identity. This paper attempts to add to the body of literature by documenting the possible factors which contribute toward advancing socioeconomic justice for the members of respective communities. Research Method: This study uses Eisenhardth research strategy within a social constructivist paradigm to process data from in-depth interviews, memos, and documentary sources to explore the internal dynamics of three most prominent of these communities (Memon, Delhiwala and Chinioti) in Pakistan. Findings: The findings suggest that the secret to their resilience is perhaps rooted in their religio-sociocultural communal norms which may not just ensure effective wealth redistribution among the deserving segments of the society, but may also enable its deserving members to achieve self-reliance through community-supported-entrepreneurial-activity. This study proposes that a culture of community-based-family-entrepreneurship coupled with the spirit of cooperation, sacrifice and reciprocity may be an effective strategy to counter socioeconomic injustice. Implications: The religious entrepreneurial communities may be seen as an alternative to free market or state driven methods to impart socioeconomic justice where needed. The voluntary inclination of entrepreneurs in such communities to facilitate those in need may perhaps reduce or even eliminate the need to involve state intervention to redistribute wealth through taxation, which may also eliminate the cost of state bureaucracy which are employed for the collection and redistribution of taxes. Originality/Value: The findings add to the body of literature which could help similar communities to improve their socioeconomic stability in a just manner for all its members. Policy makers can also take notice of the religio-sociocultural norms as a possible cause for socioeconomic justice within the respective communities to formulate policies conducive of sustaining such norms where necessary.
... It is noteworthy, first, that patterns of successful religious communities are not limited to Pakistan (Papanek, 1972) or Islamic countries. The pattern has been found around the world (e.g., Anderson et al., 2000;Egbert, 2009;Egbert et al. 2011;Glazer and Moniyan, 1963) and for a considerably diverse group of religious communities (e.g., Dana, 2007;Cheung and Yeochi king, 2004;Egbert, 1998;Greene, 1997), and it remains a core topic in entrepreneurship research (Brammer et al., 2007;Dana, 2009). Second, there is nothing surprising about rules-of-conduct in a community reciprocated by communal support through network and capital for the adherents of such rules that serve the profitability interests of its members. ...
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Certain religious entrepreneurial minded communities are highly successful. It is tempting to assume that the underlying social mechanism of business success can be used as a blueprint for the development of larger social entities. Recently, Javaid, Shamsi and Hyder (2020) have argued that inefficiencies of markets and bureaucracies may be avoided if religious entrepreneurial communities are considered an alternative for members' business investment, capital-and expertise-support to businesses, and the redistribution of wealth in favor of economically vulnerable community members. Consequently, the title of their paper is "Religious entrepreneurial communities as a solution for socioeconomic injustice". I address this problematic position by an extended comment and point out inefficiencies induced by such an approach. I apply the concepts of networks and clubs to tackle problems of religious entrepreneurial communities as subgroups of larger social entities. Individual beliefs, individual preferences, and norms of cooperative behavior can occur among members of any community, with or without common religious beliefs. Consequently, a shift from the areligious, market-oriented form of economic organization towards specific sets of religious beliefs will not, by itself, endanger business success. These issues require considerable attention before a transfer of behavioral pattern prevalent in small communities can be applied to larger groups. I emphasize the danger of generalizations from small case study results of specific entrepreneurial communities to larger social entities, such as societies. Viewpoint
... The few available concepts on entrepreneurial belonging are predominantly masculine biased (Egbert 1998;Ahl 2006;Ahl and Marlow 2012;Patterson et al. 2012;Díaz-García and Welter 2013). And the resistance and/or lack of intent of women to align with these normative frames are being studied with increasing interest in research and practice. ...
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Scientific discourses about entrepreneurialism have long been dominated by neo-liberal thinking that categorizes it as gender-neutral. The last two decades however have seen entrepreneurship research develop a more nuanced understanding of gender. Taking the recent findings of entrepreneurial belonging (EB) as dynamic and relational as a starting point, this article aims to better understand how women entrepreneurs are affected by the challenges and chances of defining and negotiating the genderedness of EB. The concept of liminality is used as a critical perspective to gain insights on how women entrepreneurs accomplish entrepreneurial belonging in what is considered a predominantly masculine field like STEM (science, technology, engineering, mathematics). Insights into explorative interviews question the need for a linear or static “fixed” approach of (un)doing gender to foster belonging. More precisely, the data reveal that liminal gender states (LGSs) of EB are linked to the situational perception of dissonance between the subjective ideas of womanhood and a disciplinary as well as entrepreneurial masculine normative frame. And indeed, the data indicate that women STEMpreneurs are continuously triggered by the genderedness of their EB as being a state “betwixt and between” normative frames. One the one hand, they feel challenged by the dissonance of LGSs. On the other hand, the interviews also reveal that this challenge turns into an opportunity in situations where LGSs are strategically used to build upon new entrepreneurial routines and roles that foster a state of uniqueness.
... Alternatively, society organized in the form of multiple self-sustainable communities possessing a culture of simplicity and self-reliance, where production is more of a house hold phenomenon, achieving full-engagement of the able bodied men and women may not be a fantasy. This claim can be substantiated by historical evidence from the communities prevalent across the Muslim and non-Muslim world (Egbert, 1998;Levin, 1974;Polanyi, 1944). Schumacher (1973) argues that "people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade" (p. ...
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The purpose of the paper is to create a walkthrough description of system of production and consumption (SPC) grounded in the metaphysical foundations of Islam. The paper uses Schumacher's framework of describing an economic system in compliance with the metaphysical position of an ideology. The said framework is used to create a brief sketch of the SPC compliant to the metaphysical position of Islam. The findings suggests that the Islamic SPC is organized around the goal of maximizing well-being of all stakeholders as advocated by the teachings of Islam, while the wealth created is used as a means for that purpose. Hence the family and community driven guild systems may come closer to the model sketched in this paper. The sketch presented in this paper is limited to the features highlighted in Schumacher's work. A similar comparison can be drawn about other features of the system not discussed in this paper. The paper will guide the Muslim-entrepreneurs to take Islamic-economic-system from theoretical abstraction to its implementable blueprint and toward developing a more holistic alternative to modern capitalist system of production, consumption, and finance. In Malay: Tujuan kajian ini adalah untuk mencipta penerangan tentang sistem pengeluaran dan penggunaan (SPC) berdasarkan asas metafizik Islam. Makalah ini menggunakan rangka Schumacher untuk menerangkan sistem ekonomi dengan mematuhi kedudukan meta-fizikal ideologi. Rangka kerja tersebut digunakan untuk membuat lakaran ringkas SPC yang mematuhi kedudukan meta-fizikal Islam. Hasil kajian ini menunjukkan bahawa SPC secara Islam dianjurkan di sekitar matlamat untuk memaksimumkan kesejahteraan semua pihak berkepentingan sebagaimana yang dianjurkan oleh ajaran Islam, manakala kekayaan yang diciptakan digunakan sebagai saranan untuk tujuan itu. Oleh itu, sistem persatuan yang dipandu oleh keluarga dan komuniti boleh mendekati model yang dilukis dalam kajian ini. Lakaran yang dibentangkan dalam makalah ini adalah terhad kepada ciri-ciri yang diketengahkan dalam karya Schumacher. Perbandingan yang sama boleh digambarkan tentang ciri-ciri lain sistem yang tidak dibincangkan dalam kajian ini. Makalah ini akan membimbing para usahawan Muslim untuk mengambil sistem ekonomi Islam dari abstraksi teori kepada pelan tindakan yang boleh dilaksanakan dan ke arah membangunkan alternatif yang lebih holistik kepada sistem pengeluaran, penggunaan, dan kewangan kapitalis moden. Kata kunci : ekonomi Islam, sistem pengeluaran, sistem penggunaan, kesejahteraan pekerja, kemampanan alam sekitar.
... In this line of research both positive and negative effects of social networks have been identified. Ethnicity and membership in distinctive religious groups can have positive as well as negative influence on business activities (Egbert, 1998). The same applies to the influence of the entrepreneur's family on business success (Nafziger, 1969;Egbert, 2009). ...
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Employing public resources for promoting entrepreneurships demands careful selection of candidates who are most promising to set up a successful entrepreneurial career. This study addresses the relation between an individuals’ entrepreneurial potential, identified through personality traits, and aspects of human and social capital, based on prior entrepreneurial exposure. A psychometric test, called F-DUPN, measures the strengths of personality traits considered relevant for successful entrepreneurial activity. To test our hypotheses, we collected data of 166 individuals. All of them are university students or graduates and have indicated a specific interest in entrepreneurial activity. A major result is that participants experienced in self-employment, with self employed parents and with self employed friends show a higher entrepreneurial potential than participants who do not have these experiences or relations. Furthermore, we find in line with other studies that differences in entrepreneurial potential become less pronounced with increasing age. An interpretation is that personality traits significant for entrepreneurial activity are not stable over time and can also be acquired at a later stage in life.
... In this line of research both positive and negative effects of social networks have been identified. Ethnicity and membership in distinctive religious groups can have positive as well as negative influence on business activities (Egbert 1998). ...
Article
Full-text available
Employing public resources for promoting entrepreneurships demands careful selection of candidates who are most promising to set up a successful entrepreneurial career. This study addresses the relation between an individuals’ entrepreneurial potential, identified through personality traits, and aspects of human and social capital, based on prior individual experiences in the domain of self‐employment. A psychometric test, called F‐DUPN, measures the strengths of personality traits considered relevant for successful entrepreneurial activity. To test our hypotheses we collected data of 166 individuals. All of them are university students or graduates and have indicated a specific interest in entrepreneurial activity. A major result is that participants experienced in self‐employment, with self‐employed parents and with self‐employed friends show a higher entrepreneurial potential than participants who do not have these experiences or relations. Furthermore, we find in line with other studies that differences in entrepreneurial potential become less pronounced with increasing age. An interpretation is that personality traits significant for entrepreneurial activity are not stable over time and can also be acquired at a later stage in life.
... In this line of research both positive and negative effects of social networks have been identified. Ethnicity and membership in distinctive religious groups can have positive as well as negative influence on business activities (Egbert 1998). ...
Article
Full-text available
Employing public resources for promoting entrepreneurships demands careful selection of candidates who are most promising to set up a successful entrepreneurial career. This study addresses the relation between an individuals’ entrepreneurial potential, identified through personality traits, and aspects of human and social capital, based on prior individual experiences in the domain of self-employment. A psychometric test, called F-DUPN, measures the strengths of personality traits considered relevant for successful entrepreneurial activity. To test our hypotheses we collected data of 166 individuals. All of them are university students or graduates and have indicated a specific interest in entrepreneurial activity. A major result is that participants experienced in self-employment, with self employed parents and with self employed friends show a higher entrepreneurial potential than participants who do not have these experiences or relations. Furthermore, we find in line with other studies that differences in entrepreneurial potential become less pronounced with increasing age. An interpretation is that personality traits significant for entrepreneurial activity are not stable over time and can also be acquired at a later stage in life.
... Apart from that, members can also be exposed to negative effects. Business networks that are based on common religious background of its members [52] are an illustration. While the SN itself is beneficial for some members it is not necessarily beneficial for all members. ...
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The sociological literature on social networks emphasizes by and large positive network effects. Negative effects of such networks are discussed rather rarely. This paper tackles negative effects by applying economic theory, particularly neoclassical theory, new institutional theory and the results from experimental economics to the concept of social networks. In the paper it is assumed that social networks are exclusive and since exclusiveness affects the allocation of resources, negative external effects may occur. The argument of the paper is that it is not only advantages for network members that need to be investigated but also the disadvantages for non-network members. The results have two implications. The first one is for economic policy, which often fosters social networking while ignoring their negative externalities. The second one is for network research that can benefit from a more rigorous application of economic theories.
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This bibliographic study identifies over 600 secondary sources published up to and including 2003 that have been omitted in previous bibliographies in Ismaili studies, namely, Nagib Tajdin’s A Bibliography of Ismailism (Delmar, 1985) and Farhad Daftary’s Ismaili Literature: A Bibliography of Sources and Studies (London, 2004). It encompasses all aspects of Ismaili thought and history, including the Fatimid and Alamut periods, as well as studies on modern Ismaili communities. The study consists of: an introduction that describes the research methods utilized, the omissions arranged in author-alphabetical order, and a subject index.
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Изданието има за цел да представи теоретичните основи и главните изследователски направления на новата институционална икономика (НИИ). Приведени са примери за тяхното приложение в обяснението на обществено-икономически феномени и процеси. Специално внимание е отделено на актуалното състояние на институционалното знание в световната научна литература от последните години, като същевременно са изведени връзки с българската икономическа действителност и стопанско развитие. Отпечатва се подкрепата на Центъра за икономически теории и стопански политики към СУ "Св. Климент Охридски" (www.economy.uni-sofia.bg).
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lords, craftsmen, artisans and professionals. They belong to the Musta'lian Isma~ili sect of Islam and were converted from several Hindu castes, some eight hundred years ago. The name Bohra (also Bohora) denotes a "trader, merchant" (from the Gujarati vohorvu, "to trade") and records the occupation of the first converts to Islam 1). Ancestors of the present Bohras came to East Africa in the nineteenth century from Gujarat particularly from the district of Cutch and Kathiawar, though some Yemeni Bohras from Southern Arabia have also settled here. Out of an estimated half a million Bohras scattered all over the world, the majority being in India, East Africa has about 15,0002). Although a small minority, the Bohras have succeeded in preserving their identity, and religious and cultural traditions. Like other minorities in East Africa they are organized into an exclusive endogamous group, locally known as a 'community'. So far very little has been written about this interesting entrepreneurial and religious group. The present study is a survey of the origins and migration of the Bohras to East Africa and their religious beliefs and organization. It is based on the author's lengthly experience of living with the Bohras
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The concept of embeddedness has general applicability in the study of economic life and can alter theoretical and empirical approaches to the study of economic behaviors. Argues that in modern industrial societies, most economic action is embedded in structures of social relations. The author challenges the traditional economic theories that have both under- and oversocialized views of the conception of economic action and decisions that merge in their conception of economic actors atomized (separated) from their social context. Social relations are assumed to play on frictional and disruptive, not central, roles in market processes. There is, hence, a place and need for sociology in the study of economic life. Productive analysis of human action requires avoiding the atomization in the extremes of the over- and undersocialized concepts. Economic actors are neither atoms outside a social context nor slavish adherents to social scripts. The markets and hierarchies problem of Oliver Williamson (with a focus on the question of trust and malfeasance) is used to illustrate the use of embeddedness in explicating the proximate causes of patterns of macro-level interest. Answers to the problem of how economic life is not riddled with mistrust and malfeasance are linked to over- and undersocialized conceptions of human nature. The embeddedness argument, on the contrary, stresses the role of concrete personal relations and networks (or structures) in generating trust and discouraging malfeasance in economic life. It finds a middle way between the oversocialized (generalized morality) and undersocialized (impersonal institutional arrangements) approaches. The embeddedness approach opens the way for analysis of the influence of social structures on market behavior, specifically showing how business relations are intertwined with social and personal relations and networks. The approach can easily explain what looks otherwise like irrational behavior. (TNM)