Cross-cultural study of entrepreneurs has surprising findings

Bat Batjargal, an Oxford-trained political scientist and lecturer in social sciences at Harvard, talks a mile a minute – and can do so in five languages. He sprinkles every conversation about his work (on social network theory) with a constant phrase: “Fascinating stuff.”

In two talks last week – on the social networks of entrepreneurs – Batjargal used another frequent phrase: “Surprise, surprise.”

Preliminary findings in his large-scale, cross-cultural study of 377 entrepreneurs in China and Russia suggest that gender affects the revenues, growth, and profits of new ventures in surprising ways.

Men who are entrepreneurs have a lot in common with their female counterparts: They are young, energetic, and focused to the point of being obnoxious, said Batjargal. But they have very different social networks, and use them in different ways.

Women have larger social networks for advice and resources. But men, surprisingly, have larger “emotional” networks – the complex of associations that provide warmth, praise, and encouragement. And men apparently profit more from these emotional attachments than women do.

“This is probably the most surprising, counterintuitive finding of this research,” said Batjargal. “Men can be very emotional, and they use these emotional ties better than women do.”

For the record, he defined “entrepreneurs” as risk-taking business adventurers who manage small startup firms that are eight years old or younger. Entrepreneurs are distinct from men and women working at larger, older, hierarchical corporations.

Women entrepreneurs are better at establishing networks of friends, family, and associates, and their networks are wider and bigger than those set up by male entrepreneurs. But the bigger the network, the less the revenues and profits for women, said Batjargal, who lectured on Jan. 31 at Harvard’s Davis Center for Russian and Eurasian Studies, where he is a center associate.

He titled his comparative study – done with business strategy expert Michael Hitt of Texas A&M and psychologist Anne Tsui of Arizona State – “Emotional Men versus Rational Women: Gender, Networks, and Entrepreneurship in China and Russia.”

When the final study appears in print, it will cast a wider net than the Davis talk. Included will be data on 700 male and female entrepreneurs from four countries – China, Russia, France, and the United States.

So far, the same conclusions seem to apply across cultures, he said: Male entrepreneurs have larger emotional support networks, and have an apparently greater facility for using emotional ties for utilitarian ends – in this case, making more money.

The Davis Center presentation “was both innovative and confirming of gender roles,” wrote Rachel M. McCleary in an e-mail. She’s director of the Religion, Political Economy and Society Project at Harvard’s Weatherhead Center for International Affairs.

She praised Batjargal’s data – gathered in phone interviews in two languages – as “impressive and detailed.”

Marshall I. Goldman, senior scholar at the Davis Center and a well-known Sovietologist since the 1950s, was also impressed with the scope of Batjargal’s intercultural figures on gender and business. “What’s fresh and new is that he using these data nobody’s had before,” he said.

But he cautioned that Batjargal only interviewed entrepreneurs in three large cities (Moscow, Beijing, and Shanghai) – not unlike trying to describe a U.S. phenomenon by just talking to people in Manhattan.

Network theory, a staple of business scholarship, has long acknowledged “emotional support networks.” (Other, separate, networks provide funding resources, or counsel on strategy, structure, and technology.)

But observers seem to agree that Batjargal, who has studied intercultural business networks for a decade, has tapped a rich new vein of inquiry because he moves so easily within and across so many cultures. He was born in Mongolia, and has since studied, taught, and done research in China, England, Germany, Japan, Russia, the Philippines, and the United States. He divides his time between Boston, Moscow, Tokyo, and Beijing, where he is on the faculty at Peking University.

In his cross-culture gender study, women entrepreneurs develop large networks, but these associations hurt profitability. “They are not only useless, but even toxic and harmful,” said Batjargal. The bigger the networks are for female entrepreneurs, the more they seem to drag down revenue growth. Women have big networks, he said, but they include “lots of the wrong people, and people who have no useful resources.”

Batjargal, a self-described “survey guy” who loves numbers and tabulation, hopes that his study will point women entrepreneurs in a different direction. The research is not meant to perpetuate old stereotypes about gender and business – “Our aim is more noble,” he said. “We want to give tailored advice to women. That means finding those conditions and nuances in which women might outperform men.”

Batjargal speculated that “women network for the sake of relationships, and men for utility.”

McCleary seemed to agree. “Women overcompensate for the cultural stereotypes” in an effort to out-male their male competitors, she wrote. “Women seek to be perceived as rational so they can expect and demand positive male response in the workplace…. This altering of behavior does not help women in the long run.”

McCleary concluded that “women need to learn how to network like men.”

That might be hard, admitted Batjargal. As pervasive as the idea of the “old boys’ network” is, he said, how men actually network is not widely studied or understood.

In the meantime – at least in the high-risk, high-speed work of entrepreneurial business – women should simply have fewer (and better) members in their emotional, resource, and advice networks. “Don’t network,” Batjargal advised, “just for the sake of it.”

He also suggested avoiding all-women business associations. “Women are making themselves more cut off and clustered,” said Batjargal. “They’re perpetuating a woman’s world.”

Batjargal, who employs a blend of statistics, psychology, and sociology in his research, plans to continue using network theory as a means of exploring how people do business.

He has already completed a study of how networking impacts software entrepreneurs in China and Russia, and summarized it Feb. 1 at the Harvard School of Business. (One finding: Profits come fast and early to entrepreneurs whose networks are dense and “homogeneous” – full of people like them. But within a few years, profits go up only if networks become dispersed and “heterogeneous” – more diverse.)

Batjargal is also designing a multicountry study of how business networks are affected by physical variables, like height, weight, body mass index, grooming, and self-reported good looks. And by cultural variables like time perception and emotional intelligence.

Of his coming research projects he said, “Fascinating stuff.”