How culture influences the way entrepreneurs deal with uncertainty in inter-organizational relationships: The case of returnee versus local entrepreneurs in China

Entrepreneurship is widely associated with uncertainty that stems from inter-organizational relationships. The concept of uncertainty, however, has mostly been analyzed as a uni-variate variable that addresses perceived environmental uncertainty. In this conceptual paper we analyze the concept of uncertainty stemming from inter-organizational relationships in the entrepreneurial context as a multivariate concept, utilizing Milliken's framework, which examines uncertainty by differentiating between state, effect and response uncertainty. Cultural influences are critical in determining how entrepreneurs perceive, analyze and deal with uncertainty in inter-organizational situations. By using illustrative cases of returnee versus local entrepreneurs in China, we propose that entrepreneurs influenced by Western cultures tend to treat state uncertainty as a focal change event, whereas entrepreneurs from Eastern cultures are more likely to consider the contextual factors; entrepreneurs influenced by Western cultures tend to limit effect uncertainty in the professional work setting by looking at cause-effect in an analytical way, whereas entrepreneurs from Eastern cultures are more likely to look at effect uncertainty beyond work; and entrepreneurs influenced by Western cultures tend to respond to perceived uncertainty by analytical-strategic thinking, whereas entrepreneurs from Eastern cultures are more likely to connect multiple factors holistically and to react to uncertainty by engaging the wider community. We argue that in a globalizing world it is pertinent for entrepreneurs who operate in the international environment to have a better understanding of the various facets of uncertainty and how these are related to culture when dealing with inter-organizational relationships.