Differentiating engagement of opportunity identification: a grounded theory study of Chinese immigrant entreprenuers

Abstract

The aim of this study was to develop a substantive grounded theory describing how Chinese immigrant entrepreneurs who own and operate small retail businesses in the Eastern Cape province of South Africa identify opportunities in the business environment. The substantive grounded theory was developed using the prescripts of grounded theory proposed by Strauss and Corbin (1990). In this respect, a substantive grounded theory called differentiating engagement of opportunity identification was developed from a sample of 41 qualitative interviews conducted with Chinese immigrant entrepreneurs. The study found that Chinese immigrant entrepreneurs identified various opportunities (startup, sales, operational, relational) in the business environment through their dynamic interactions and relationships with different stakeholders. These stakeholders mainly included family members, local employees and customers. The Chinese immigrant entrepreneurs displayed two interactional processes in their interactions with stakeholders, namely engaging in and disengaging from interactions. These interactional processes enabled the Chinese immigrant entrepreneurs to identify opportunities and operate their small businesses in the business environment. Assumptions held about the interactions and relationships with stakeholders in the host community were central to the interactional processes displayed by the Chinese immigrant entrepreneurs. As they operated their small businesses, the Chinese immigrant entrepreneurs would engage in interactions with customers who were perceived as favourable (approachable). From these interactions with favourable (approachable) customers, the Chinese immigrant entrepreneurs were able to identify opportunities (gaining customer insight of opportunity), whereas they would disengage from interactions with customers perceived as unfavourable (unapproachable). In this respect, they would delegate their local employees (actions of delegation in business) with the responsibility of interacting with unfavourable and hostile customers. Additionally, the Chinese immigrant entrepreneurs would engage in interactions with local employees to gain insight into local indigenous products and identify opportunities in the host community. In order to identify other opportunities (operational, relational), the Chinese immigrant entrepreneurs would disengage from interactions with local employees and engage in interactions with other stakeholders such as family members. The varying differentiated interactions and relationships established by the Chinese immigrant entrepreneurs with different stakeholders created a relational context which enabled the identification of opportunities in the host environment. Thus, the findings of the present study and the substantive grounded theory developed (differentiating engagement of opportunity identification) are discussed from the perspective of social capital, social exchange theory and Chinese cultural values. Finally, the theory developed in the present study contributes to the understanding of the processes of how social capital and relationships contribute to the process of identifying opportunities and operating a small business by immigrant entrepreneurs within a host environment