Business behaviours and the ethnic entrepreneurs: an intra-cultural
study
Discussant: Vassili JOANNIDES
This paper questions whether ethnicity affects tax and accounting decisions made by SME
entrepreneurs. The author builds her argument on Hofstede’s cultural framework from which she
borrows two dimensions: individualism/collectivism and short term/long term time horizon.
This framework is applied to 59 interviews conducted with 36 business people from 4 signficiant
ethnic groups in New Zealand (Pasifika, Maori, Asians and White Europeans). The author then
identifies three situations in which ethnicity could influence tax behaviour: tax payment, need for
accounting assistance, and perception of cash jobs and economy). The author concludes that
collectivism/individualism as well as short term/long term orientation affects tax and accounting
behaviour. Lastly, she concludes that policy makers should take account of this in identifying
levers of ethnic compliance with tax policies.
In general, I think this paper is very young and is an early draft. It contains promising ideas but
needs major rethinking and restructuring to do justice to its potential. I think this paper, once
reworked, can contribute to three bodies of knowledge. Firstly, it can contribute to the
understanding of SME tax behaviour in general and can inform us on the role of accounting in
this. Secondly, this paper can contribute to the entrepreneurship literature if the author manages
to draw some working ethnic profiles of entrepreneurs. Thirdly, the study could also contribute
to the literature attempting to operationalise ethnicity. Accordingly, the following paras reflect my
reaction to this paper pursuant to this. I am stressing what I think is ambiguous or problematic in
the attempt to do justice to the initial intent and possible contributions.
My very first concern, even before engaging in discussing contents and research design relates to
writing style, which is too mechanical. In its present form, this paper reads like a quantitative
study we could find in The Accounting Review. I think the author would benefit from making her
piece more literary in order to really hook the reader, especially if targeted journals are AAAJ,
CPA, QRAM or the JAOC.
My issues with this draft version are threefold. Firstly, I am unclear about objective and
positioning. Secondly, I think theoretical and methodological choices should be more strongly
justified. Thirdly, the findings section does not do justice at all to data richness.
Objective and positioning:
The research question this paper seeks to answer is implicitly clear but explicitly is not. It is
implicitly insofar as it is articulated as a working research question. Explicitly it is not inasmuch as
the theoretical interest and timeliness of such a question are not stated at all. The author engages
in the paper from an empirical starting point. I think this is a major trap for research. Saying that
OECD reports or research papers have shown the importance of SME’s in tax matters or GDP
generating is commonplace. This means the theoretical issue at play is absent from the
motivation for this paper. I accordingly suggest that the author should reflect on this and address
from the beginning of her paper.
The research question, as is, does not enable me to grasp the major in this paper: tax and
accounting decisions, ethnicity or SME entrepreneurship? I dare to believe that for an accounting
audience the major should tax and accounting choices. Thence, the author should probably point
to what is known and what needs knowing in this regard.
This ambiguity is perpetuated and aggravated by the literature review, which is problematic to me
for three reasons. Firstly, it reads too mechanically: the procession of “such-and-such said” does
not help the reader understand the problem. Rather than providing such a procession of research
conclusions, I reckon the author should show the major streams of thoughts in the literature and
how they position themselves vis-à-vis each other. This would enable the reader to understand
how the author herself positions her research. This would help the author state more clearly the
type of theoretical contribution to knowledge she expects. In other words, it is for now crucial to
clarify paper major and the knowledge debate you are addressing. Your literature review for now
does not inform on this. Evident for this is your final claim pp.9-10 which in my opinion should
have been announced at the beginning of your literature review; this is the key to understanding
this literature review. I am not keen on demonstration following a “then, then, then” format. I
think announcing where you are coming from at the beginning and then justifying it is more
engaging and convincing.
This difficulty is perpetuated by the structure of this literature review. I do not understand the
procession of authors quoted and the order of sub-sections. I think the three sub-sections are
quite redundant as they all address the same things almost form the same viewpoint. You could
then merge them into one and then show more accurately what is known and needs knowing on
the three facets of your paper: ethnicity accounting research, tax behaviour research,
entrepreneurship in accounting research. Your paper is at the crossing of these three bodies of
literature. This deserves to be made explicit. See the below figure: your paper and your
contribution can be found in you addressing the blue triangle. Thence, I think you should
explicitly show the core theoretical issues at play in each circle, then identify issues when they are
crossed two by two and ultimately arrive at your research question and contribution in the blue
triangle.
Theory and methodology choices:
The author makes strong theory and methodology choices that can be bitterly critiqued.
Therefore, I suggest reinforcing justification for such choices. Just saying that you are using
Hofstede because it has become the dominant approach in management studies is not acceptable
from an academic viewpoint. We are not meant to replicate prior studies and abide by everything
written before we conduct our own research. Saying that this model is convenient is not
acceptable either. Accordingly, you should justify why it is particularly appropriate in your very
case. I personally think Hofstede’s model impairs your work in lieu of upholding it. Your claim
page 12 that there is no alternative framework totally neglects cultural research published by
AOS, AAAJ and CPA for almost 20 years. What about Cultural Political Economy (anything
written by Alawattage or Wickramasinghe), Geertz’ approach (anything written by Hopper or
Hasri), Mary Douglas’ framework, or cultural anthropology (e.g. Greer’s writings on Aborigines).
This claim should be profoundly revised.
This model reduces culture to values. These are then reduced to five dimensions. These two
aspects of the model have been bitterly critiqued, as you allusively mention. Why then are
reducing these values to two? I see no justification for this choice, which makes is unpersuasive
for now. Look at Jean Ding & Stolowy (2005) when they decide to focus only on two dimensions
of the model and justify their approach. Also, Hofstede’s model is problematic as it applies to
cultural groups predetermined items through strong etic categories. Yet, cultural research is
aimed at identifying what is specific to a cultural group through emic categories (see Bhimani,
1999; Efferin & Hopper, 2007, Alawattage & Wickramasinghe, 2008). This is particularly vivid in
research dealing with ethnicity. For now you are killing the richness of ethnicity as a working
concept for culture. You equate the two and reduce them to two dimensions form Hofstede…
Moreover, your definition of ethnicity does not do justice to what makes it differ from race
(objective/subjective; etic/emic, etc.) You should either cut ethnicity and take responsibility for
culture. Or you should totally revisit your concept of ethnicity, borrowing from Efferin &
Hopper (2007) for instance.
I then have a problem with your claims as to where each of the four ethnicities you scrutinise fit
in Hofstede’s model. Here, you are again killing the notion of ethnicity by assuming through
quasi stereotypes that they are this or that. Prove it. As you conducted 59 interviews, you should
be able to prove your claim from field observations. The reader must be convinced that it is the
case.
Methodology choices are also problematic to me too. I think the first para in section 4 is useless
and exposes you to critiques. You claim a relativist ontology and subjective epistemology. But
anything you wrote beforehand, justifying Hofstede and an etic approach contradicts this claim
(see Harris, 1976; 1990; Headland, Harris & pike, 1990; Petterson & Pike, 2002; Pike; 1967, 1990;
Goodenough, 1956). Accordingly, you should cut.
I think the justification for your sample is too empirical: “it is like this is New Zealand”. Prove it.
In order to avoid such a critique, you should provide the reader with a working theoretical or
methodological reason for selecting your informants and forming groups. Theoretical
justification should be delineated very easily from a working literature review stressing concepts
and issues at play. Methodological justification could be found in the fact that you want an
expressive case (see Berry, 2005; Joannidès, 2012) or a case evidently representative of the
analytical categories you are developing.
Next, I am a wee concerned about your sampling: 4 ethnic groups that are predetermined. Why
these ones, as you claim New Zealand and Auckland in particular counts over 200 ethnicities?
Moreover, your decision to conflate all Pasifikas together and all Asian together contradicts the
notion of ethnicity and a critique on cross-cultural study you albeit mentioned earlier. I am
unsure if Indones, Japanese, Mainland Chinese, Macao Chinese and Malaysian can be considered
the same. They have very little in common. Therefore I think the notion of ethnicity is highly
problematic here when it comes to operationalisation. Please tell us more as to the contents of
these ethnic groups (people’s origins and how you made the group). Also I am unsure how and
why you decided to form three topical groups: tax payment, accounting assistance, and cash
economy. This again relates to a lack of clarity in the knowledge debate addressed (see literature
review section). Next problem lies in the fact that you have a third layer of analytical categories
with business experts, entrepreneurs and tax practitioners. This means that your 36 people fall
into 3 x 3 x 4 categories. In other words, for each analytical categories you probably do not have
a sufficient amount of informants to reach theoretical saturation. Moreover, what it is the value
of a European tax specialist speaking of Pasifika entrepreneurs? What does he or she know about
their ethnicity? This constitutes an additional etic layer that cannot do justice to your paper.
Rather, I suggest you should either build on cultural anthropology for each of the four groups,
provided they are internally homogenous. You should then try to discuss how their ethnic
background (not according to Hofstede’s values but anthropological specificities) should
influence their perception of entrepreneurship and tax payment. Or, you should rather adopt a
grounded theory approach (see Efferin & Hopper, 2007 or Hopper, Wickramasinghe &
Rathnasiri, 2005) and let people tell you what makes them behave like they do. In either case, you
would have a much stronger methodology, richer empirical section and contribution to
knowledge.
Findings and discussion
The findings section is very superficial and not persuasive at all. You seem to assume that having
one quote from each ethnic group would inform you on how cultural background influences
their behaviour. This lack of persuasiveness is aggravated by the fact that your quotes only
indirectly refer to ethnicity, culture or values and never explicitly shows how these are the
explanation for people’s behaviour. Thence, I think you should rather produce quotes in which
informants explicate their cultural background, be it based on Hofstede categories or not. Then,
you should provide the reader with other excerpts on tax and accounting behaviour. Either you
then have other quotes establishing a clear link between these two empirical dimensions. Or you
do not and have to rely on cultural anthropology of the considered group to interpret this
missing link. And then you have working and convincing findings.
My other issue with this section lies in the fact that you seem to make speak of about ethnic
groups indifferently people from within and people from without. In one case you can have some
idealised or insightful views. In the other you can have prejudices and preconceived views from
your informants. In other words, this points to an epistemological and methodological choice
that has as yet not been made: etic or emic insights into ethnicity and what this should reveal.
You should be clearer with the contribution you expect each type of informant to have to your
story or line of argument.
Discussion is absent form your paper: I see no confrontation with the literature you mobilised in
the literature review. I cannot see how your findings are positioning themselves vis-à-vis prior
research and subsequently I cannot have an idea of your contributions. Whence, section 6 is less
than convincing, as nothing in the paper comprehensively supports your claims.
There is still quite a bit of work but I think this paper has great potential once all these questions
have found an answer. Good luck.