Discourse on Entrepreneurial Orientation in Hidalgo State, Mexico

Abstract

Entrepreneurial orientation influences the development of organizations and the need to undertake it implies assuming certain risks for entrepreneurs who must respond to the constant dynamism of the business world in search of new opportunities for success. The objective was to find the conditions for and against the entrepreneurial orientation that exists in the State of Hidalgo, through the opinion of 300 experts in entrepreneurship. A measuring instrument was used and adapted in 2019 by the National Network of MSMEs (micro, small and medium enterprises) of the Consortium of Mexican Universities (CUMEX), based on the Global Entrepreneurship Monitor and the information was collected through an online questionnaire. The main results show the need to strengthen entrepreneurial orientation, improving aspects regarding financing, government programs, the opening of the internal market and regulations, and social and cultural issues; likewise, an important finding is that the generalized perception of this phenomenon is more positive than if each dimension is analyzed in a particular way, along with the factors that compose it. This study can contribute to the generation of a better entrepreneurial culture that encourages the creation of new businesses.

1. Introduction

The creation, growth, viability and general performance of companies are strongly associated with the level of sustainable economic and social development of their countries [1,2]. In this context, the concept of entrepreneurship naturally arises where individuals and organizations contribute to the environment, creating value and wealth [3]. The topic of entrepreneurship has attracted the attention of academics, entrepreneurs, and governments around the world [4]. The entrepreneur is considered an engine for the development of a society, a strategic element for economic growth and an enhancer of activities, which is conditioned by various institutions and promoted for human development [5].

For more than 10 years in Mexico, there have been policies to support entrepreneurship, which reflect, as a result, one of the highest business birth rates, based on the report issued by the Global Entrepreneurship Monitor (GEM), where the Total early-stage Entrepreneurial Activity (TEA) stands at 19.9% among the countries of the Organization for Economic Cooperation and Development (OECD) in the Latin American region, and its business activity is growing rapidly [6]. Likewise, micro-, small- and medium-sized enterprises represent 99.8% of the country’s companies and contribute 72.3% of employment, significantly higher than the OECD average, which constitutes 99% of MSMEs and 60% of employment in Latin America and the Caribbean [7].

It is clear that the above data reflect that Entrepreneurial Orientation has positive effects on increasing profits, resulting in innovation, making it an essential element. The concept refers to the combination of entrepreneurial initiative and competitive aggressiveness that allow for a new behavior [8]. This construct makes a huge difference to the economy and the development of an organization, entrepreneurs seek to identify new opportunities, respond to changes in the environment and take the appropriate measures to achieve success [9].

Entrepreneurial Orientation refers to the existence of entrepreneurial behavior in companies, which implies that they are proactive in analyzing the environment in which they operate, aiming for innovative responses to the challenges they face [10]. The entrepreneurial orientation helps to understand how and why some companies can regularly renew themselves over time through new growth paths. Entrepreneurial-oriented companies are willing to engage in risky projects [11]; therefore, they are expected to be more innovative in turbulent environments and have better outcomes [12,13,14].

In Mexico, as in other Latin American countries, educational institutions, the government, and the business sector, among other actors, have established strategies to promote entrepreneurship in order to achieve a greater number of job opportunities for the workforce and, with this, a higher level of economic welfare in the population [15]. However, it is also known that 75% of ventures fail. The main causes of this are as follows: weak finances, lack of objectives, poor planning, lack of strategies to captivate the market, lack of skills, etc. [16,17]. In addition, the COVID-19 pandemic has affected everyone [18], and specifically entrepreneurs in Mexico, since 93.2% of companies in the country suffered some impacts, such as a decrease in income, reduction in sales, dismissal of personnel, and temporary closures [19].

In the State of Hidalgo, Mexico, there are no studies focused on Entrepreneurial Orientation, particularly concerning the opinion of experts; these include those people who have managed to start and maintain a successful business, academics specializing in entrepreneurship, and public officials who work for the local government who can share their experiences on the support they have and the main problems they face. Likewise, not enough attention has been paid to knowing the dimensions that constitute Entrepreneurial Orientation and analyzing each of them individually [6].

Identifying the main barriers and challenges faced by Mexican entrepreneurs is of utmost importance; this ensures that they, the institutions and the government can join and focus their efforts to ensure that the greatest number of ventures achieve success and, consequently, have a positive impact on the country’s economy [20]. Therefore, the present investigation aims to investigate the conditions for and against the entrepreneurial orientation that exists in the State of Hidalgo. Looking at the opinion of entrepreneurship experts, areas of opportunity can be recognized to continue to stimulate the increase in business creation, support innovative small and medium-sized enterprises (SMEs) and emerging companies, increase their productivity as well as profitability, and facilitate the growth of smaller companies [7,21].

The first studies published in the literature on Entrepreneurial Orientation considered that entrepreneurial companies generally tended to take greater risks than other companies, specifically when there were adverse environmental conditions [22]. The evolution of this construct has seen a great boom since the 1990s, continuing its growth and greater effervescence in administrative sciences since 2000, however, its growth has led to new questions in a surprising contemporary environment. As a consequence of economic crises and various institutional and generational movements, trends in the area of entrepreneurship have been highly variable, especially in the last 30 years [23]. This current invites us to investigate the entrepreneurial process and the dimensions that make it up in regional environments. As entrepreneurship is a relatively young area, this research will allow us to obtain a perspective endorsed by experts on the behavior of Entrepreneurial Orientation in the State of Hidalgo, which will allow us to identify which are the strongest and which are the weakest elements [24].

The term Entrepreneurial Orientation was born as part of the studies in the development of Management Theory and Organizational Strategy [25,26,27], with multiple approaches and definitions throughout the literature, from which, in our opinion, an integrated definition can be formed: “It is an organizational phenomenon that reflects the capacity and style of the general manager of the organization, impregnating in this orientation a series of fundamental elements such as: (a) Decision-making with a considered risk, (b) an investment in innovation processes, (c) a clear orientation towards proactive activities that provide new opportunities, (d) a notably aggressive competition in the market and (e) autonomy in decisions when launching a product or service” [28].

Various investigations have been developed to connect the Entrepreneurial Orientation with different disciplines [29], which vary according to the interest of each area of knowledge and the specific problems related to what happens when entrepreneurs act, why they act and how they act. This means that the economic, geographical, managerial, psychological and sociological aspects of entrepreneurship and its impact on society have been partially analyzed [30]. Although the literature admits that Entrepreneurial Orientation leads to higher performance, few empirical works provide sufficient evidence in this regard; only weak evidence was found in previous years regarding the positive relationship between Entrepreneurial Orientation and performance of newly created companies [31].

The Entrepreneurial Orientation research field in Latin America, and especially the Mexican context, is an area of opportunity for academics who seek, through their findings, to recommend elements that constitute an entrepreneurial strategy to entrepreneurs, depending on the turn of their industry and the context in which they perform [23,24]. It is important to evaluate the conditions that constitute the entrepreneurial ecosystem of a region, from the perspective of experts in areas related to the dimensions that make up the entrepreneurial framework [32]. That is why this research aims to collect the opinion of businessmen, academics from educational institutions, public officials, and other actors, related to the dimensions that constitute the Entrepreneurial Orientation instrument, to identify the strengths and weaknesses, successes and limitations that reveal key points, and recommendations that can be taken into account to strengthen the business economic scenario in the State of Hidalgo.

2. Materials and Methods

The objective of this research is to learn the conditions for and against the Entrepreneurial Orientation that exists in the State of Hidalgo, through the opinion of experts on entrepreneurship. This is based on the following research hypothesis: H₀: the perception of the experts is equal in dimensions to the global perception of the experts, as well as its corresponding null hypothesis: H₁: the perception of the experts by dimensions is different from the global perception of the experts. The sample under study was composed of 300 experts from the State of Hidalgo, who were selected for convenience, due to proximity, access facilities and their experience, reputation, and area of influence; these experts included academics from universities, business owners, new entrepreneurs, and representatives of government agencies, among others. The information was collected from March 2020 to July 2021, through online surveys and direct interviews through digital platforms, since direct access to offices was restricted by COVID-19. The instrument used was adapted in 2019 by the National Network of micro, small and medium enterprises of the Consortium of Mexican Universities (CUMEX), based on the survey used by the Global Entrepreneurship Monitor (National Survey of Experts), which consists of nine dimensions: FN = Financing, GP = Government Policies, GO = Government Programs, ET = Education and Training, TD = Transfer of Research and Development, CI = Commercial Infrastructure, OM = Opening of the Internal Market, AI = Access to Physical Infrastructure, and SC = Social and Cultural Norms. The validity of the applied instrument is supported by its application in other states of Mexico, with a Cronbach’s Alpha reliability coefficient of 0.79.

3. Results

How the results obtained were analyzed corresponds, first, to the application of a non-parametric Wilcoxon Test of the dimensions, thus identifying the variables that were most representative in the perception of the experts, which favor or disfavor entrepreneurship in the state of Hidalgo. Subsequently, the dimensions were analyzed in detail, observing the most relevant variables of the study. The scale used was qualitative, and is denoted as follows: (1) totally false, (2) false, (3) neither true nor false (neutral), (4) true, and (5) totally true.

Table 1. Dimensions means.

Dimension	Mean
Financing (FN)	3.64
Government policies (GP)	3.26
Government programs (GO)	2.82
Education and formation (ET)	2.91
Research and Development Transfer (TD)	3.43
Commercial infrastructure (CI)	3.22
Opening of the domestic market (OM)	2.85
Access to physical infrastructure (AI)	3.37
Social and cultural norms (SC)	3.38
Global mean	3.21

Source: own elaboration.

shows that the general trend was towards scale three, even for the global perception of the study, which would indicate a neutral position, while the most representative dimension was that of Financing, which was close to scale four in the instrument applied. This indicates certainty that financing is easily accessible and available to new and growing companies.

In descriptive terms, the above information allows for an overview of the study; however, it is convenient to carry out a detailed analysis to corroborate this scenario, so a Wilcoxon Test was carried out. This type of analysis is performed to determine if there are differences between a population mean and a target reference value. In this case, the hypotheses to be tested are formulated:

H₀. The perception of the experts by dimensions is equal to the global perception of the experts.

H₁. The perception of the experts by dimensions is different from the global perception of the experts.

If the result shows that the level of statistical significance is greater than 0.05, this means that the H₀ is accepted, and there would be no changes between the perceptions of the experts and the global perception according to the dimension. On the other hand, if the statistical significance is less than 0.05, H₀ is rejected, indicating a difference between the perceptions of the experts and the global perception by dimensions.

Table 2. Wilcoxon Test Statistics.

	FN	GP	GO	ET	TD	CI	OM	AI	SC
Z	−2.398	−0.650	−2.545	−1.479	−1.354	−0.411	−2.655	−1.004	−2.3298
Asymp. Sig. (2-tailed)	0.014	0.512	0.010	0.137	0.170	0.669	0.006	0.311	0.017

Source: own elaboration.

shows the results obtained by this test.

The results indicate four dimensions with a significance less than 0.05: financing, government programs, opening of the internal market, and social and cultural norms. That is, these variables show a difference relating to the global perception of Entrepreneurship in the State of Hidalgo. The remaining dimensions have a significance greater than 0.05, which indicates that the null hypothesis is accepted and there is no difference between the perceptions of the experts and global perception according to the dimensions.

It is important to recall that the mean of the global perception of the experts showed a trend towards a neutral position; therefore, when contrasted with the four variables indicated above, the results can be interpreted as follows:

Financing—Global. By dimension, financing had a positive perception, as it was considered easily accessible and available for new and growing companies; however, in global terms, there was a perception of uncertainty (scale 3) that this is the case.

Analyzing the financing dimension in greater detail,

Table 3. Perceptions of Financing Global.

Variables	Mean
Availability	3.80
Risk capital	4.30
Informal private investment	3.70
Subsidies	3.60
Media financial	3.65
Own capital	3.00

Source: own elaboration.

shows that it is made up of six variables.

The risk capital variable refers to the fact that the experts considered it true that, in the State of Hidalgo, there is enough supply to finance the companies that are created, and that do not have a history that allows for confidence in their results or certainty of returns for the money that is loaned to them. There is neutrality or uncertainty in the rest of the variables regarding the availability of financing, as well as informal private investment, public subsidies, private financing, and, above all, the variable: “own capital”.

Government programs—Global. The Wilcoxon Test indicated that there was a difference between both perceptions, since, in global terms, it was exceeded for a neutral perspective, but, by dimensions, government programs showed a greater tendency to have a negative perception of their effectiveness, access, and the information provided to entrepreneurs.

Table 4. Perception of Government Programs.

Variables	Mean
Effectiveness	2.50
Easy access	2.40
Competent professionals	2.75
Number of existing programs	3.10
Incubators	3.10
Information on government programs	2.35

Source: own elaboration.

corroborates what was described in the previous paragraph, and the results regarding the significance level of the Wilcoxon Test: all the variables do not scale four. Uncertainty is noted regarding the variables number of programs and incubators; that is, there is no certainty on the part of the experts to affirm that the number of these factors will adequately promote the creation and growth of new companies. There is also uncertainty regarding the effectiveness of the incubators for the same case.

The variable that shows an evident false perception refers to easy access; experts consider that not every entrepreneur who needs help from a government program to create or grow a company can find one that suits their needs.

Opening of the domestic market—Global. The opening of the domestic market dimension also showed a difference relating to the global perception of the experts; it contains five analysis variables, as can be seen in

Table 5. Perceptions of opening of the domestic market—Global.

Variables	Mean
Effective antitrust legislation	2.50
Entry costs can hardly be identified for companies to new markets	2.60
Entry of companies to new markets without being blocked	2.80
Changes in the new markets for goods and services	2.10

Source: own elaboration.

.

All the variables show that experts tend to believe that the idea that the internal market is easily accessible to entrepreneurs in the State of Hidalgo is false; they consider antitrust legislation to be ineffective and that entry costs cannot easily be identified by new and growing companies.

Social and cultural norms—Global. The last dimension of analysis corresponds to social and cultural norms, and contains five variables. It is important to note that, in terms of the means, the difference is minimal and, with the Wilcoxon test, statistically more precise data were obtained.

In this case, it can be observed in

Table 6. Perceptions of social and cultural norms.

Variables	Mean
The individual is responsible for managing his own life	3.50
The standards stimulate creativity and innovation	3.25
The standards encourage business risk-taking	2.75
The standards emphasize self-reliance, autonomy, and personal initiative	3.10
The standards support and value individual success that was achieved through personal effort	3.50

Source: own elaboration.

that these two variables have the highest average level, but with a tendency towards uncertainty, since experts cannot ensure that social and cultural norms foster people with an individual vision regarding their responsibility for their own lives, and that success is supported and valued through their efforts.

The same was true for the creation and innovation of people who start a business and their self-sufficiency and own initiative.

There was agreement in the variable regarding business risk, since experts consider that it to be false that social and cultural norms stimulate business risk-taking.

4. Discussion

Like other findings in different Latin American countries, the four most important dimensions that should be strengthened to promote the development of entrepreneurship in the State of Hidalgo are: financing, government programs, opening of the internal market, and social norms and culture [33,34,35]. Regarding financing, entrepreneurs must have their own capital to create and develop companies because, despite the existence of various sources of financing, experts do not consider these to be enough, and believe that there is neither adequate promotion nor dissemination. These results coincide with other studies in which Mexican companies fail in more than 60% of the cases, since they only have financing to cover their monthly operations [33,36,37].

In relation to government financing programs, they are not easily accessible to those interested; however, there are already some support measures for Micro, Small, and Medium Enterprises (MSMEs) to facilitate access to credit, including the creation of new programs and improvements in existing ones, credit amounts, access requirements, the extension of payment terms, and special lines of credit such as guarantee funds; these are all carried out through the National Program for Microentrepreneur Financing and the Welfare Bank from the National Savings Bank and Financial Services, in order to improve the financial inclusion of the beneficiaries of social programs [38].

Referring to the dimension of the opening of the internal market, the experts agree that market access for new and growing companies continues to be difficult in terms of competition, legislation and costs; these obstacles have been present for a long time, of some years, in companies in Mexico and Latin America [39,40,41]. In this sense, initiatives have been proposed using the technical support approach to face the effects of COVID-19, and boost local commerce through the solidarity market, e-sectoral business roundtables, and alliances with the private sector to promote online trading and free training through digital platforms [38].

Finally, social and cultural norms are a determining factor in the development of entrepreneurship and people. However, experts mainly indicate that these regulations do not stimulate business risk-taking in individuals, which coincides with the classic discourse and the insistence that, in this country, it is necessary to cultivate a business culture that fosters decision-making without fear of risk [42,43].

5. Conclusions

The entrepreneurship experts that were consulted have a global opinion in favor of the entrepreneurial orientation that exists in the State of Hidalgo, which reflects the efforts by universities, government institutions, and other financial organizations that support the development of ideas to carry out business projects.

The four most relevant dimensions analyzed in this study reflect, in greater detail, the differences in the general perception of experts; therefore, analyzing each factor in each dimension allowed us to know the reality of each component.

In the financing area, it is evident that the problem lies in the lack of a financial background for growing companies, and this perhaps means a lack of physical property, no commitment guarantees, and low formalization, among other aspects, which can lead to less access to financial credit.

In the case of the dimension of government programs, the factors that draw attention are information on the programs and easy access, which were evaluated by the experts as below average. This indicates that the strategies used by the government to publicize support for entrepreneurs and the requirements that need to be fulfilled to access them are not entirely good.

The dimension of opening to the internal market shows differences in the general perception of the experts, since access to the market for new companies is not easy. This denotes the need for a business observatory of entrepreneurs that can act as a monitor that supervises and allows for the collaborative participation of all those involved in the process.

The last significant dimension, which deals with the perception of social and cultural norms, shows that entrepreneurs are fearful of risk because they do not feel that they have legal support on their side, which reflects that, in Mexico, there is a weak financial education.

The limitations of the present study contrast with the generalized opinion of the experts in entrepreneurship who participated in the research, and with the specific analysis of the significant dimensions of the applied measurement instrument, indicating that there is a general perception of the entrepreneurial orientation conditions in favor in the State of Hidalgo. However, looking at each dimension shows that the reality reveals important differences. All of this is possibly because each expert gave their opinion based on their own experiences or what they observed in some successful projects, while, unfortunately, others have seen how many students or professionals fall by the wayside and fail to develop their business ideas due to some specific circumstance regarding their practice.

We consider that there is a need to extend this research with future studies, in which the perception and experiences of recently graduated students and professionals in the entrepreneurial world can be made clear. We also wish to compare these results with similar research findings in other states in Mexico.

To ensure that organizations respond to the constant dynamism of the business world, entrepreneurs must foster an entrepreneurial culture in their workers, who could potentially undertake new projects, generate innovative ideas and improve the organizational climate. Entrepreneurial Orientation plays a very important role because it is a process of change and must respond to the challenges of the competitive environment, seeking new opportunities to create a new idea or business; for small businesses that are trying to survive, entrepreneurial orientation helps them to effectively and efficiently organize resources and create strategies to fulfill their objectives.