Abstract
Keywords
Introduction
An emerging stream of entrepreneurship research suggests that entrepreneurial business failure is a widespread phenomenon (Amankwah-Amoah et al., 2018; Byrne and Shepherd, 2015; Dias and Teixeira, 2017). This interest has been delimited to performance differences among surviving firms, not considering that many new ventures fail (or voluntarily exit) during their first years of existence (Shepherd and Wiklund, 2007). The perspective of ‘migrants family businesses’, ‘mixed embeddedness’ (Ram et al., 2017b), ethnic values (Jones and Ram, 2015; Pellegrini and Ciappei, 2015; Rath and Swagerman, 2016), family values and familiness (Anggadwita et al., 2017; Arregle et al., 2015) has been explored by previous studies to determine the influence of cultural beliefs on entrepreneurial process (Webb et al., 2009). Further, Jaskiewicz et al. (2015) explored the idea of entrepreneurial legacy to explain how families’ ability to embed founders’ entrepreneurial values and spirits on to future generations help enhance the success of family businesses. Through the family legacies, families nurture transgenerational entrepreneurship which describes the processes of how family businesses are passed down from one generation to the next (Jaskiewicz et al., 2015).
Research on migrants’ businesses and the difficulties facing migrants such as language, discrimination, hostile political environments influencing migrants’ experiences has been on the increase in recent years (see Carter et al., 2015; Crawley and Hagen-Zanker, 2019; Hack-Polay and Igwe, 2019; Mawson and Kasim, 2019; Ojo et al., 2013; Ram et al., 2017a). Despite high interest in this field, an important understudied issue is how migrant family businesses operate and why some critically underperform or fail. The difficulties faced by migrants are often exacerbated by additional challenges such as weak intercultural interactions with host countries (Nwankwo et al., 2010), immobility issues (Zhou, 2004) and inability to break into mainstream markets (Rusinovic, 2008).
Bates and Robb (2014) found that while establishing businesses in minority neighbourhoods can be attractive for immigrants because of reduced discrimination and the low capital requirements, however, there are significant risks, for example, exploitation, lack of growth ambitions, family interference and so on. Hence, minority entrepreneurship is a contextualized phenomenon (given the cultural, social, family, political and legal issues that interact to influence migrants’ experiences). Drawing on the business failure literature, institutional theory (De Castro et al., 2014; Webb et al., 2009; Williams and Vorley, 2015) and family embeddedness (Kloosterman, 2010), this study examined processes through which Sub-Saharan African migrant family businesses (SSAMBs) operate and what influences business performances. Furthermore, to enhance our understanding of migrants’ family business dynamics in cultural markets, this study integrates both theories to examine the challenges that migrant family businesses face, the perspectives and outcomes. The reason we combine two theories instead of one is that institution and market contexts lead to mixed embeddedness within ethnic populations (Jones et al., 2014; Ram et al., 2017b). There evidences that migration decision-making is a dynamic process, one which is influenced and shaped by a complex interaction between macro, meso and micro level factors including historical and geographical ties between origin and destination countries (Crawley and Hagen-Zanker, 2019). Moreover, institutional thickness is generated by the embeddedness of businesses in social interactions, social relationships and professional connections (Dahles et al., 2010).
The aim of the article is to identify the factors that migrant business owners believed were critical for their business underperformance or failure. In this article, we consider as SSA migrants, first generation of immigrants from SSA, who have run a business in the United Kingdom, regardless of immigration status. Given that the institutional environment is crucially important for entrepreneurship (Williams and Vorley, 2015), we examine the reasons for failure among entrepreneurs who migrated from SSA and how the business failure is different from what we already know, and how the institutional environment influences migrants’ businesses. We focus on the United Kingdom because of the high rate of failure reported about migrants’ businesses. In their study, Jones et al. (2014) reveal that ethnic minority small businesses specifically trade for a shorter time than other small businesses (i.e. less than 3 years) compared to well over 4 years for other races. We examine previous related studies and employ a qualitative research method by interviewing 20 SSAMB owners that provide participants with opportunity to narrate their experiences. This approach enables us to contribute to theory. First, by integrating institutional theory, we establish a foundation to examine migrant family business environment. Despite the importance of migrants’ businesses, we have much less understanding of the unique dynamics inherent in the markets, institutions and the implications (Webb et al., 2015). Second, as an important factor in the family business research, we explore family embeddedness and ‘cultural boundedness’ of SSAMBs’ entrepreneurial practices and outcomes. Hence, the analysis focuses on both the entrepreneur experience and the business challenges. The next section reviews the literature.
Literature review
By reviewing migrant’s business literature, we identified the micro, meso and macro factors that affect SSAMB owners (the ‘rules of the game’ which determine entrepreneurial behaviours). These have been explored in the context of business failure, effect of family embeddedness or family involvement, culture, formal and informal institutional rules.
Business failure
By entrepreneurial business failure (Lane et al., 2019) we are referring to a situation where a firm ‘ceases operations, loses its corporate identity, and/or loses the capacity to govern itself’ and business failure is likened to the idea of entrepreneurial exit, which is defined as the process of ‘shutting down, discontinuing or quitting a business’ (Amankwah-Amoah et al., 2018: 650). Business failure occurs over several distinct phases, usually contiguous to a significant event that is considered the tipping point of ‘failure’ (Dias and Teixeira, 2017: 4). Dias and Teixeira (2017) emphasize that the process includes the analysis of the conditions and series of events that lead to business failure, including post-failure situation (focusing on the consequences of going through such a stressful situation).
The incorporation of these assumptions into an over-archiving narrative of success risks obscuring and underplaying the psychological, social and financial consequences of different types of failure in entrepreneurship (Lane et al., 2019). Engaging with failure seriously, whereby it is ‘an outcome in itself as well as part of a journey to eventual success, is necessary to build authentic images and deeper understanding of entrepreneurship as experienced by those who pursue it’ (Lane et al., 2019: 97). To better understand the consequences of business failure, researchers draw on many theories from the field of psychology to determine what each individual goes through when they experience a business failure (Dias and Teixeira, 2017). These may or not avail experiential learning.
From an entrepreneurial learning perspective, knowledge and narratives derived from past experiences in entrepreneurial contexts serve as learning schemes or guide to influence entrepreneurs’ strategic choices in subsequent entrepreneurial engagements (Amankwah-Amoah et al., 2018: 651). As these authors further pointed out, ‘experience from closing down a business is associated with a more positive attitude towards failure…experience from closing down a business due to reasons of poor performance is a highly valuable source of learning’ (p. 651). Shepherd and Wiklund (2007) maintain that it is probably common that those who operate mediocre businesses choose to close them should a lucrative employment option present itself. They state that the failure of distinguishing between failure and exit can be attributed to a lack of a clear definition of failure.
Migrant business failure
The relationship between migration, labour markets and migrant family businesses has always been the dominant topic in migration debates (Škuflić and Vučković, 2018; Tata and Prasad, 2015). Migrants make up a major part of labour in Western economies. Nearly 11% of the population in France, 13% in Germany and the United States and 20% in Canada are migrants (Edo et al., 2018). In the last two decades, a variety of factors (e.g. declining economies, political and ethnic conflicts, etc.) have caused people from developing world to migrate to Western countries. In attempting to settle in host countries, some migrants are coerced into setting up their own business because they have fewer opportunities in the labour market due to institutional, socio-economic factors and lack of understanding of the new local context (see Fairlie and Robb, 2008: 3).
More so, the current economic climate has generally been unfavourable to small businesses let alone those from ethnic minorities (Ojo et al., 2013). From inclusive entrepreneurship perspective, starting a business is not easy for migrants (Hack-Polay and Igwe, 2019). Given the prevalence of reported cases of SSAMB failures (see Ojo et al., 2013) and the wider concerns about the dearth of scholarly research on the drivers and consequences of entrepreneurial business failure (Mantere et al., 2013), these contexts could be explained from sociocultural perspectives and outcomes (Wang and Altinay, 2012).
Policy within the field of diversity and enterprise is characterized by tensions and unresolved questions including the presence of perceived or actual discrimination, the number of ethnic minority and women-led businesses and potential market failure (Carter et al., 2015). Among the challenges that face migrants who seek for paid employment or self-employment are language, discrimination, hostile political environment. There is considerable interest among European politicians and policymakers in the factors influencing the destination preferences of refugees and other migrants (Crawley and Hagen-Zanker, 2019).
Despite the high entrepreneurial spirit of migrants, minority businesses are credited with a phenomenal failure rate supported with evidence from the United Kingdom and the United States. Shepherd and Wiklund (2007) emphasize that sometimes for economic reasons the business is unable to continue its operations. This provides a clear distinction vis-à-vis exit, which is a wider phenomenon not necessarily associated with poor performance. Focusing on the behavioural characteristics of the entrepreneur and the failed venture, researchers have studied how characteristics associated with the entrepreneurs’ background and vision, social networks, personality, cognition, identity and pre-entry knowledge have affected the entrepreneurs’ subsequent strategic choices (Amankwah-Amoah et al., 2018: 651). It has been suggested that perceptions of migration policies may be more significant than their content as the implications are often not known or misunderstood (Crawley and Hagen-Zanker, 2019).
Family embeddedness
Family businesses are characterized by significant levels of family involvement, often including inputs from family members (Webb et al., 2015). Researchers have been encouraged to analyse the activities of entrepreneurs within the context of family embeddedness perspective and incorporating family dimensions for more holistic insights (Azmat and Fujimoto, 2016; Kansikas et al., 2012). The concept of ‘familiness’ has been used to show how families in family businesses become a strategic resource for sustained performance (Kansikas et al., 2012). In this study, we develop arguments to suggest how family embeddedness (i.e. family members vs. non-family ties) (Carr and Hmieleski, 2015; Kansikas et al., 2012; Webb et al., 2015) interacts with culture to influence SSAMBs. In some families, due to binding social ties, the family comes first and the business second, and that can be a challenge (Miller et al., 2019).
Additionally, family businesses often have the intention to pass the business on to the next generation and such succession issues place a great deal of stress on family firms (Miller et al., 2019). Kloosterman (2010) developed a framework for analysing migrant entrepreneurship from a ‘mixed embeddedness’ perspective in which they assert that the wider societal context had to be invoked as certain groups of immigrants were pushed towards self-employment due to specific obstacles (i.e. discrimination) on the labour market. Through cultural embeddedness, migrants, in many cases lacking in financial capital, are nevertheless capable of starting a business by relying on their social capital (Kloosterman, 2010). Arguably, there are groups for whom the notion of embeddedness or integration is particularly problematic: for example, Black minority groups (Nwankwo et al., 2010; Ojo et al., 2013).
Families can be sources of embeddedness that can carry over to the business context. The family embeddedness theory (Uzzi, 1997) asserts that family and business are strongly intertwined, and family considerations can play a significant role in influencing business decisions (Webb et al., 2015). Among the theories that have been suggested over the years to explain the phenomenon of migrant entrepreneurship is the theory of mixed embeddedness (Azmat and Fujimoto, 2016). Azmat and Fujimoto (2016) explained that mixed embeddedness theory focuses on the embeddedness of entrepreneurs in the socio-economic and political-institutional environment of the country of settlement, and how these forces shape the opportunities of the entrepreneurs. They emphasize that mixed embeddedness draws attention to the range of formal and informal institutional contexts in which migrant entrepreneurs are embedded. The theory thus refers to the interdependence between the socio-economic characteristics of ethnic groups and their embeddedness in social networks, as well as the socio-economic and politico-institutional environment of the host country (Azmat and Fujimoto, 2016).
Webb et al. (2015) emphasize that embeddedness refers to the notion that economic activities are not necessarily decided upon by rational actors; instead, economic activities are shaped by the context in which these actors are embedded, facilitating or constraining the actors’ behaviours and potentially leading them to pursue behaviours that are not wholly rational. Furthermore, Webb et al. (2015) acknowledge that embeddedness can lead to potential efficiencies by enabling individuals to make faster decisions and, from a relational standpoint, lead to trust, greater knowledge sharing and joint problem-solving. However, inefficiencies can surface for individuals who become over-embedded. Finally, there is compelling evidence about the role played by social networks of family, friends, acquaintances and agents which shape the political and economic context within which migration decisions are made (Crawley and Hagen-Zanker, 2019).
Institutional theory
Research in institutional entrepreneurship has since evolved in two concurrent but separate streams, one driven by institutional theory, the other by institutional economics (Pacheco et al., 2010). Hence, the institutional theory provides a useful framework for understanding the firm’s behaviour considering multiple coexisting logics within the field (Reay et al., 2015). With institutional theory, we propose that migrant entrepreneurship is influenced by institutional boundaries (i.e. norms, values and beliefs of large groups in society) and formal institutional boundaries (i.e. laws and regulations) (De Castro et al., 2014; Webb et al., 2009; Williams and Vorley, 2015) and that institutional voids serve to perpetuate failure of SSAMBs. Institutional environment is defined as the ‘rules of the game’, which determine entrepreneurial behaviours (De Castro et al., 2014; Webb et al., 2013; Williams and Vorley, 2015). According to Murithi et al. (2019), such institutional environments comprise three pillars. The first is the regulatory pillar (formal institutions) involving formalized rules, laws and associated sanctions promoting certain behaviours and restricting others. The second is informal institutions (normative pillar) refer to norms, values and beliefs that define socially acceptable behaviour (Webb et al., 2013). Third, have cultural-cognitive pillar concerning how certain behaviours become taken for granted based on shared understandings (Murithi et al., 2019)?
As Pacheco et al. (2010) argue, institutions as socially constructed rule systems or norms that produce routine-like behaviour. Williams and Vorley (2015) posit that although entrepreneurship is often portrayed as an individual endeavour, it is important to recognize that it affects and is affected by the institutional environment, which governs and directs economic activity. The ease of starting up, licencing and registration laws and access to finance, and informal institutions such as perceptions of opportunity and prevailing culture impose direct and indirect effects on entrepreneurs’ behaviours.
We argue that developing economic environment may pose many challenges for migrant businesses. On one hand, patriarchal societies still prevail in many societies, thus migrants may not get the support they need from their host communities. Evidently, many migrant businesses are characterized by rich cultural fabrics that bring together individuals within communities although they may not share any family relationship (Webb et al., 2015). Our study, however, focuses on how characteristics of the institutional and cultural environments influence SSAMBs to underperform or fail. Critics argue that while institutionalism has succeeded in becoming the dominant theory to study macro-organizational phenomena, there is a danger that the theory has been stretched far beyond its core purpose – to understand how organizational structures and processes acquire meaning and continuity beyond their technical goals (Suddaby, 2010). Suddaby (2010) maintains that what is missing in current efforts within the institutional theory is to understand why and how organizations attend to their institutional environments.
Methodology
This study follows the recommendations by Miller et al. (2019) and Gedajlovic et al. (2013) by mapping out the research questions (Table 1). According to Gedajlovic et al. (2013), qualitative research on entrepreneurship should focus on exploring the complexities and nuances associated with enterprise perspective, as well as the large number of possibilities for future research. Further, entrepreneurship researchers need to be exceptionally clear when distinguishing between the various constructs (Gedajlovic et al., 2013). A qualitative approach is preferred because research into institutional environments require a rich contextual analysis ‘from the perspective of those living it’ (Colman and Rouzies, 2019: 2229). These relate to the dimensions of SSAMBs; aggravating stressors or coping resources; type and severity of challenges (Miller et al., 2019); and role family and culture play within the migrant businesses. Moreover, unlike quantitative method, qualitative approach is exploratory and adopts an interpretive design that enables the participant’s perspectives (Charmaz, 2014) and provides business owners with a voice to narrate their experiences. In addition, the qualitative enables case study (Khavul et al., 2009). This approach enabled 20 semi-structured interviews with business owners of SSA migrant families who were recent comers. The aim of the qualitative approach is to identify the factors that migrant business owners believed were critical for their business underperformance or failure. Twenty interviews were considered adequate as the interviews reached saturation. Data saturation can be problematic in qualitative studies (Ritchie et al., 2013; Saunders et al., 2018).
Research questions.
Purposeful sampling is widely used in qualitative research for the identification and selection of information-rich cases related to the phenomenon of interest (Palinkas et al., 2015). The procedure for the selection and arrangement of the interviews took the following stages. First, the list of potential respondents for the interviews was generated from migrant associations in different locations in the United Kingdom. This process enabled us to create email and phone numbers of 42 potential interviewees. Second, the 42 potential participants were contacted by email and phone calls. They were informed of the aim of the research and asked if they migrated to the United Kingdom in the last 5 years and had operated a business that failed. Key participant selection criteria were set as having been in Britain for at least 5 years and operated a business that failed or eased at least 1 year before the interviews.
Third, we contacted the 28 people (purposeful sampling) and solicited that they take part in an interview for the study. Only 20 out of 28 accepted the proposal. Thereafter, the time and place for the meetings were agreed with the interviewees. The sample included 14 men and 6 women aged 30–57 years. We explained that participation was voluntary and that participants could withdraw from the research at any time. They were assured anonymity; hence, nicknames were used in reporting the findings. The lead researcher travelled to the respondents’ preferred locations to conduct the interviews. The interviews lasted between 90 and 120 min and were recorded and transcribed verbatim. The interview started with simple introductory questions centred on the following lines: Who was involved in the running of the business? What range of products did you have in the business? How would you explain the failure of your business? Could you describe the factors that contributed to your business underperforming or failure? These were followed by more complex questions aimed at understanding the effects of relationships or networks, familiness, cultural issues, institutional voids and markets as presented in Table 1.
Consistent with previous studies (García and Welter, 2011; Guest et al., 2012), the research involved three main stages. First, interviews were conducted in English and were transcribed by the lead researcher. Second, the transcriptions were analysed using ‘thematic analysis’ (Guest et al., 2012) to identify dominant and interesting contexts of discussion. Third, the interviews were coded using the qualitative data analysis software NVivo, which helped to identify and explore concepts and categories, trying to find the best fit or most plausible explanation for the relationship under study (García and Welter, 2011). In the first step of data analysis, the data are coded into general themes by assigning a word or phrase to each category. In the second step, axial coding, data are put back together in new ways by making connections between themes. The analysis was carried out case-by-case to identify similarities and differences in business owners’ experiences.
For reasons of confidentiality and anonymity, participants were asked to provide a nickname that they recognize when the researcher sends them a draft of the research findings for participant validation. A first draft of the findings was presented to 10 of the respondents to confirm the accuracy of views and quotes. The validation was intended to confirm the transcripts, to preserve research ethics and to empower the interviewees by allowing them to verify their statements (Mero-Jaffe, 2011).
Findings
Migrant businesses operate in a unique social, cultural and economic environment. In this study, four distinctive themes emerged from the data. These themes include (i) overdependency on ethnic products and small markets; (ii) cultural boundedness; (iii) family embeddedness; (iv) eroding collectivism and lack intra-group support. These themes are defined within the context of institutions (Webb et al., 2009), institutional voids (Kloosterman, 2010), family embeddedness (Mair et al., 2012) and social capital.
Overdependency on ethnic products and small markets
A critical area of investigation that the research explored was the nature of the participants’ failed business. About a third of the businesses were one-man or one-woman operated businesses with occasional support from family members or friends, while about two-thirds of the businesses employed one to three employees (all the employees were part-time workers from the same ethnic origin as the owners of the businesses). All the participants asserted that they exclusively focused on culture-specific products or markets. Cilia, the hairdressing salon owner, explained that she did only Black women’s haircare, which meant that most of the customers were from the Black African community. The lack of diversity atrophied the business. Despite awareness among the participants that the Black African market is small and crowded, there was a reluctance to try out products appealing to other ethnicities because of perceived issues of race and unchartered business territories. Greg contended: Most people buy from or engage with businesses within their own ethnicities. So, if you don’t fit or don’t have the connection, it’s hard to get customers or get contracted for anything.
Another key finding of the research relates to planning issues among SSAMBs. Most participants did not have elaborate business plans at the start-up and expansion stages. There was evidence that strategic planning was perceived as less critical than immersing themselves in the opportunities. Such a perspective epitomizes cultural issues whereby some entrepreneurs go into business because it is perceived as a ‘normal’ activity in their ethnic group as opposed to first assessing personal capabilities and real business opportunities. Often, SSA migrant enterprise emerges rapidly on the assumption that the business will succeed. Greg’s story of strategic awareness illustrates this standpoint. Greg established a delivery business with friends who called themselves ‘brothers’. They enjoyed a good start until Martin, a business partner, decided that they should sell more alcohol and drinks on credit to compatriots’ nightclubs, perceiving it as a cultural and moral duty to help his ‘brothers’ from the same country with the hope of increasing sales. Martin explained: We sold huge amounts of goods on credit. That was almost all our capital invested. As debtors weren’t paying, we were unable to pay our suppliers and had no money to change suppliers. Many African migrants think that to run a shop you need Masters degrees. But for a business start-up, you need basic understanding, that you can acquire via short training programmes locally. I went on a practical start-up training in my local community college when my first small business ceased because I realised that I lacked in basic areas.
Cultural boundedness of SSAMBs
The subject of cultural boundedness has often constituted an impediment to competitiveness of ethnic minority businesses. This is to the extent that such constraints have been cited as one of the leading causes of business failure among SSAMBs in the diaspora. This view was observed in seven interviews from this study, where cultural dynamics were consistently mentioned. The impediments ranged from (i) co-ethnic relationships – that is, essentially participants wanted to do business like ‘back home’ with compatriots; (ii) paternalism, which ‘prevented’ participants from taking up legal action against relatives who were usually partners in the family enterprise; and (iii) religious inclinations irrespective of whether it was the Muslim or Christian faith. As an illustration of the latter, two respondents explained how their business activities were interrupted: The Friday prayers in the Mosque are extremely important. So, we would close shops at peak of market hour to attend the mosque. (Ibrahim) You can’t miss baptisms and ceremonial events for our community members. That’s disrespectful. On such days, we close the restaurants and the bars. (Baba)
Family embeddedness
The migrant entrepreneurs were focused on understanding the role of the ‘family embeddedness’ in supporting or interfering with SSAMBs. This approach is important given that the literature of ethnic businesses is divided on familiness as strategic resources and as interference. There is evidence that family plays a vital role in small business growth (Powell and Eddleston, 2016) by offering access to resources and information. Other scholars provide insight into how familiness is a strategic resource in a family business, thereby tapping into a critical antecedent to sustained performance. On the other hand, some studies reveal how it interferes with the business (Zhu et al., 2017). Almost all the participants raised the business start-up capital from personal savings, families, friends and relatives. Ode contends: You have to provide opportunities for your family first. You can’t see close relatives suffering to find a job and shut your eyes on their circumstances. Family comes first. Even if they don’t have the skills you need now, you can train them gradually. I closed the businesses because I couldn’t cope with combining household work, childcare and family responsibilities with the business.
Eroding collectivism and lack of intra-group support
A key theme from some interviews was the lack of support within the SSA business community especially in the London region as pointed out by the participants. There was a perception that those involved in business display strong reluctance to collaborate with newcomers and novices. The intra-group solidarity, which was perceived as a significant success factor in other competing communities, Asian migrants (see Modood, 1992), is neither visible nor contemplated among SSA business people. Adam believes that: Between African entrepreneurs, there’s no solidarity. Everyone does their own thing and don’t care about other members or groups. If we help each other to settle in this country and set-up businesses, that’ll work. Presently those who do well won’t talk to those who are starting. If this changes, we’ll do better. Small African migrant businesses are sometimes involved in unhealthy competition with one another. There’s little exchange and collaboration. It’s a shame because I think new migrants should help each other and compete only with outsiders. I look up to successful African migrants for ideas and inspiration. This isn’t just my immediate family but the wider community of African migrants. Some are doing well; it’s important to approach them for support even if some don’t always welcome you.
SSAMBs are faced with cultural competition rather than cultural solidarity. The desire to do better compared to other juxtaposing groups led most participants to suggest that intercultural learning is an avenue to explore. Within migrants from Africa, there is a lack of cultural solidarity and intercultural learning as witnessed among Asian migrants (see Modood, 1992). Obah, a participant with experience of two failed businesses, believed that Africans ought to learn from Indian and Chinese businesses and emulate them. Obah opined: In every corner, you find a successful Indian shop; many Chinese small businesses are enduring…. African migrant entrepreneurs must learn from ethnic communities that are more established and are running successful small enterprises. My business partners and I felt that we were at a crucial time when we had to take proactive steps to get customers to notice our presence. We took a lot of constructive suggestions from our customer which helped us diversify. (Cameron) Surprisingly I saw the name of my business in the ‘thank you’ section of the schools’ newsletters and headteachers praising my business’s involvement in school life. I can assure you that it was great for sales.
Discussion
The findings show that the challenges SSAMBs faced were multifaceted. The findings unravel structural and socio-economic challenges some of which shared similarities and differences with previous migrant studies in the research context (see Fairlie and Robb, 2008; Wang and Altinay, 2012). These challenges point to the interconnections between ethnicity and enterprise development. Whereas several studies (Fairlie and Robb, 2008; Peredo and Chrisman, 2006; Wang and Altinay, 2012) provide evidence of intercultural solidarity and cooperation among Asian migrants, the findings from our current study reveal the lack of intercultural cohesion, strong ethnic identity and competition among SSAMBs that entrenches their further marginalization from the mainstream. The strong ethnic and cultural boundedness leaves many business owners trapped in underperformance. First, our findings expose the extent and consequences of the institutional voids on migrant’s business decisions. For example, hostile immigration laws have bearing on business development and growth among SSA migrant communities (Ojo et al., 2013).
Second, consistent with the literature, SSAMBs felt that the struggle for ethnic identity and survival rest on them starting a business, sometimes without the prior business knowledge and skills. However, these businesses barely survive for few years due to the small size of the markets they operate in, overburdening and interference by the extended families back in the migrant’s home as migrants cater for their families.
Our research unveiled SSA migrant entrepreneur voices that have been under-represented and under-reported in the literature. This study has integrated institutional context with cultural boundedness perspectives to explain why SSAMBs are trapped in the cultural particularism. This is a major contribution given that the institutional environment is crucially important for understanding entrepreneurship (Williams and Vorley, 2015). We explained how the institutional environment (i.e. formal institutional voids and the challenges facing informal institutions) has left SSAMBs with no choice but to shut down.
Our findings revealed a limited role afforded to non-family and non-ethnic employees or business partners in the SSAMBs. The majority of these businesses had no workers from outside the owner’s family or ethnic groups. Arguably, this could be a key parameter and determinants of business growth and sustainability. This finding is consistent with UK government statistics showing that ‘ethnic businesses are more likely to employ family members’ (HM Treasury, 2008).
There is significant empirical evidence substantiating the negative relationship between individuals’ perceived prototypicality of within their group and their attitudes towards other relevant groups (Bertholda et al., 2019). What Kwon et al. (2013) regard as community social capital is missing among SSAMBs. This seemed to have influenced business success for two reasons. First, there was limited information, ideas and challenges to the entrepreneurs’ perspective, further reducing the exposure of the business outside of the ethnic and migrant enclave. Second, while family members may make significant operational contributions to the businesses, their input in strategic decision-making could also be limited in comparison with non-family members or non-ethnic members.
Another important element in the failure of the migrants’ businesses is culture, which appeared to have had a profound bearing on ethnic SSAMB failure. As previous studies (see Carter et al., 2015; Wang and Altinay, 2012) have shown, culture makes an important contribution to the discourse of entrepreneurial orientation and its relationship to ethnic minority business growth. However, some participants acknowledged that broadening perspectives and working with other ethnic communities could allow intercultural learning and develop solidarity within the SSA migrant communities; these could complement the restricted sphere of the family that SSAMBs traditionally utilized.
The cultural boundedness of the African small enterprise is also evidenced in its approach to business strategy, products and markets. We noticed that some of the SSA migrants are secretive. As noted by Miller et al. (2019), family firms are notoriously secretive. The fact that they are not publicly traded is considered by many of them an important asset that preserves the sources of their competitive advantages and their profitability (Miller et al., 2019). Generally, our findings reveal that despite awareness among migrants that the Black African market is small and crowded, there was a reluctance to try out products appealing to other ethnicities because of perceived issues of race, discrimination and unchartered business territories.
Theoretical and practical implications
The outcome of data analysis combined with institutional theory and embeddedness enabled us to develop a conceptual model of the propositions specifying the relationships between institutional contexts, family embeddedness and migrant family business performance outcomes. The elements of the conceptual model explain factors influencing the performances of SSAMBs. Ethnic minorities seek possibilities for self-employment as a way of securing income and getting out of the unemployment trap (Ojo et al., 2013). The model proposes that institutional voids and cultural boundedness result in the enactment of ethnic identity and family embeddedness, which drives migrant businesses into cultural markets leading to business underperformance or failure (Figure 1).

Institutional environments and family embeddedness influencing migrant family business outcomes.
The conceptual approach recognizes the influence of the institutional and cultural environment factors on entrepreneurship (Webb et al., 2013) that led to family embeddedness and ethnic identity. Cultural markets, business failures and imperfections arise from marginalization and inequality, thus placing constraints on migrant entrepreneurs (Hansen and Schaumburg-Müller, 2010). To overcome the unfavourable conditions, migrant entrepreneurs leverage their families, ethnic networks and social capital to overcome the conditions they faced. An environment of weak institutions encourages entrepreneurs to engage in networking and creation of social capital, as well as the development of competitive resources to face other firms after the start-up phase (Peng et al., 2009). Arguably, this may not hold for SSAMBs and other minority groups who face resource constraints in terms of access to financial and human resources (Hansen and Schaumburg-Müller, 2010).
As explained earlier, institutional voids and cultural boundedness result in the enactment of ethnic enclaves and family embeddedness, leading to unfavourable business outcomes. A significant perspective uncovered during the study is the potentially damaging impact of the business environment, unfavourable immigration laws, discrimination concerning access to loan facilities on SSAMB failure, which compound already strong inherent socio-psychological well-being of SSA entrepreneurs, especially the newly arrived migrants. These have implications for government and non-governmental organizations concerned with migrant integration and welfare. A significant contribution of our study is that it provides a critical evaluation of sociocultural and economic foundations of migrant family business failure to advance research in this field, especially a comparative study of migrant groups in different contexts. The key practical implication of the study centres on its utility for both policymakers and would-be migrant entrepreneurs who could learn from the voice of the participants and the perspectives they offer. For example, the need for solidarity and mentorship among SSAMBs is a critical one. This indicates that survival is linked to active learning and emulation within the SSA migrant community. The voices of the participants signpost policymakers as to where the most critical support needs for SSAMBs lie.
Conclusion, limitations and future research
One of the dominant explanations in family business research is the resource-based view of family firms, suggesting that family firms occupy a unique bundle of resources created by the interaction of business and family. This ‘familiness’ enables the creation of both competitive advantages and disadvantages. As with SSAMBs, family involvement could be associated with a disadvantage due to the interference of family members, extended relatives and financial demands from family members in the migrant’s home countries. Our study into migrant family businesses is more of an empirical nature that allows meaning and sense-making of the complexities behind integration, exclusion, business success or failure, cultural acceptance or rejection within family business research.
Our study has some limitations. First, our sample did not include successful businesses; it is, thus, hard to know if the entrepreneurs who failed did anything different from those who succeeded. Second, our sample did not include failures among entrepreneurs from SSA descendants who grew up in the United Kingdom. However, a thorough literature review has eliminated the second problem and helped us focus on areas that have distinguished our study from prior work. Finally, as with many qualitative studies, the narrative approach we adopted may be prone to hindsight bias. As Gartner (2007: 619) argues, ‘the narrative approach recognises that a story is never the whole story since any story is embedded in a context’.
Moreover, the sample makes generalization difficult despite the benefits of the rich data obtained. Future research could consider a much larger sample and take a more quantitative approach with multiple regression and factor analysis to validate some of the key findings of this research. In so doing, a comparative analysis of various ethnic groups could add more to our understanding of the business experiences of specific groups and enable tailored policy and educational actions. Additionally, the entrepreneurs interviewed operated in various sectors though the dominant ones were the hospitality and retail sectors. Sector could therefore be set as a specific factor of analysis to show potential differences.
