Academic journal article Journal of Small Business Management

Entrepreneurship in the Street Food Sector of Vietnam-Assessment of Psychological Success and Failure Factors

Academic journal article Journal of Small Business Management

Entrepreneurship in the Street Food Sector of Vietnam-Assessment of Psychological Success and Failure Factors

Article excerpt

We tested the hypothesis that process characteristics of action strategies were related to entrepreneurial success in microbusinesses in the urban informal sector of Vietnam. The process characteristics were divided into four strategies: critical point planning, complete planning, opportunistic, and reactive. Success was defined as a combination of economic and subjective measures. A survey was done in Hue and Hanoi (Vietnam) among 102 street food vendors. With 62 vendors of this sample, we held in-depth interviews, which were used to test our hypotheses. The results showed that seventy percent of the business owners did not plan much. Opportunistic and planning strategies were most highly related to success, and a reactive strategy was related to failure. The latter replicates other studies in other developing countries.

Introduction

Micro and small-scale businesses have a major influence on the economy of a country, be it for the mere reason that they create jobs and provide an income for the population (Parker 1996). In Vietnam, practice in conducting small businesses determines to a large extent how well average families live (what goes on in the village or city market). An important part of the urban informal microbusinesses is the street food sector. Not much is known of the entrepreneurial activities of Vietnamese microbusiness owners in the street food sector. Most of the businesses in this sector are not for malized and are, therefore, outside regulations and outside protection by the government. Nearly all the participants in this important microeconomic sector are women (O'Harrow 1995). The Vietnamese economy depends heavily on these microbusinesses. To improve the socioeconomic position of women that work in the urban informal sector, it is important to know how they do their work and what makes them successful. This is important not only for the whole sector, but also for the individuals who operate in it. We studied individuals in Vietnam who were founders and owners of businesses and who did the daily management.

We hypothesize with Frese and De Kruif (2000) that the actions and action strategies of business owners lead to success (or failure). They suggest the following process characteristics of strategies (conform also Frese, Van Gelderen, and Ombach 2000; Van Gelderen, Frese, and Thurik 2000): complete planning strategy, critical point strategy, opportunistic strategy, and a reactive strategy. The strategies can be differentiated according to the amount of preplanning that owners do before they act on achieving a goal and the amount of proactivity, that is, how much they think and actively deal with potential opportunities. Someone who uses preplanning plans ahead and actively structures the situation. This strategy implies a comprehensive representation of the work process, a long time frame to plan ahead in, a large inventory of signals, clear knowledge and anticipation of error situations, and a proactive orientation. This may take the form of a fairly comprehensive plan, or the form of a critical point strategy. The latter starts out with the most difficult and most important point and plans for this one, but does not preplan all other issues. Only after solving the first critical point, further steps are taken--it can be conceptualized as main-issue-planning. Both types of preplanning have clear goals and people who use this strategy are able to concentrate on the main tasks. An opportunistic strategy is characterized by a high degree of scanning for environmental opportunities. This strategy has the advantage of being able to actively recognize and make use of opportunities. However, the disadvantage of this strategy is the instability. Planning helps to stabilize one's goal pursuit. For opportunistic planners, it happens all too often that new opportunities are taken without continuing on with current plans and endeavors. Thus, continuous learning about one sector, improving one's services and products for example is in constant jeopardy with this strategy. …

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