UNCERTAINTY AVOIDANCE AND ITS INFLUENCE ON ENTREPRENEURSHIP AMONG LITHUANIANS

Abstract: Abstract The purpose of this thesis is to examine whether uncertainty avoidance or risk intolerance has influence on entrepreneurship among Lithuanians. This paper aims to looks into the cultural dimensions according to a Dutch researcher, Geert Hofstede who rated Lithuania an index score of 65, and a study by a Lithuanian professor Huettinger (2008) who rated Lithuania a score of 59, whereby 100 means an extremely risk intolerant score and 1 being extremely risk tolerant score. These two researchers of cultural dimensions concluded that Lithuania is a nation whose tolerance to risk is moderate. Thus, a nation of risk intolerant individuals may not be welcoming to risky activities such as starting new ventures. The research question in this paper is to find out if risk intolerance among Lithuanians affect their engagement in business formation and entrepreneurship. Furthermore, this thesis compares uncertainty index scores of Lithuania to Sweden and Belgium, and uses anecdotes of current entrepreneurship activities taking place in Lithuania to reinforce results from this study. Questionnaire method was used and 102 Lithuanians responded out of 500 questionnaires sent. The conclusion from this survey is that uncertainty avoidance has no impact on the level of business formation among Lithuanians. Although respondents were risk conscious when responding to questions testing their risk tolerance, it did not impact their willingness to form a business. From previous studies, Lithuanians proved to be of a cautious nature by following a given set of society structured rules and regulation but the level of entrepreneurship witnessed in modern times in Lithuania goes against the norm. In a low Uncertainty Avoidance culture such as Sweden, a manager is not expected to know everything and can learn on the job, new entrepreneur is not expected to know all rules and regulations in their startup company, or an investor can put money in a new idea without knowing all the details of the new business (Hofstede, 2001). While Lithuanians involved in this study were asked similar questions to determine how risk intolerant they are as well as how willing they are to start a company, it came out that regardless of risk intolerance, Lithuanians are still willing to engage in risky, entrepreneurial activities. This survey found out Lithuanians can accommodate risk but still need guidance through some form of rules to maintain order and reinforce trust.