the modern weberian thesis: a short review of the literature

The modern Weberian thesis:a short review of the literature

Joel A. Ryman and Craig A. TurnerDepartment of Management and Marketing,

College of Business and Technology,East Tennessee State University, Johnson City, Tennessee, USA

Abstract

Purpose – The purpose of this paper is to provide an overview of conceptions and misconceptionsrelating to Weberian thought after 100 years of synthesis.

Design/methodology/approach – Extensions of the theories espoused are discussed and a briefreview of several relevant empirical research projects is highlighted. Weberian theory is taken as thebasis for the discussion of the paper. Its fundamental assertions are discussed and current discussionselucidated. Modern (post-1980) research directions and findings are summarized for helping thescholar understand the current state of Weberian research and the potential for future paths.

Findings – There are numerous areas for future theoretical and empirical exploration discussed.Such areas as the effects of the Protestant work ethic on social networks across multi-cultural(of which religion and religiousity play a role) boundaries and the dynamics of cultural change within,and between cultural dimensions will provide ever-changing opportunities for at least another century.Inter and intra-national diversity and its dynamics will also provide munificence in this field of study.

Originality/value – This paper provides scholars a brief review of the status of Weberian researchand should evoke new thought related to this theoretical base as well. With the renewal of interest inentrepreneurship and its effects on communities, this area should be a fertile field for researchers,practitioners, and the public in general.

Keywords Economic theory, Religion, Work ethic

Paper type Literature review

Review of theoretical baseMax Weber’s work, The Protestant Ethic and the Spirit of Capitalism has been aninfluential part of the sociology literature for just over 100 years where it remainsboth a powerful and controversial thesis (Swatos and Kaelber, 2005; Howard, 2005).While Weber is considered by most to be a sociologist, his prolific works in economics,specifically addressing questions related to the impact of religious values and cultureon the advent and evolution of economic systems, places him at the confluence of theeconomics and sociology; a field that Weber described as “social economics”(Swedberg, 1999).

The central purpose of this paper is to provide a summary of Weber’s works thatrelate to his social economics of religion. Weber’s work in this area began withhis most famous essay of all, The Protestant Ethic and the Spirit of Capitalism(Die protestantische Ethik und der ’Geist’ des Kapitalismus) which was published in twoarticles (1904-1905), and translated into English in 1930. This seminal piece wasfocused on the question of understanding the origins of modern society and theemergence of capitalism in Western society. Approximately, five years afterthe Protestant ethic, Weber began an ambitious study of other non-Christianreligions with the intent of explaining why Western-style capitalism did not emerge in

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other parts of the world. This massive endeavor, which was entitled The EconomicEthics of the World Religions (Die Wirtschaftsethik der Weltreligionen), was neverfinished. However, in 1920 and 1921 three volumes of these essays were publishedin the Collected Essays in the Sociology of Religion (Gesammelte Aufsatze zurReligionssoziologie, Vols. I-III) and were entitled Ancient Judaism (Das antike Judentum,translated in 1952), The Religion of India (Hinduismus und Buddhismus, translated in1958) and The Religion of China (Konfuzianismus und Taoismus, translated in 1951).This massive work, which builds upon both the methodology and thesis of TheProtestant Ethic and the Spirit of Capitalism, examines the major non-Christianreligions to explain why other civilizations were unable to internally generate this“spirit” of capitalism. His basic answer, to be explored more fully in the followingsections of this paper, was that one of the consequences of the Protestant reformationin Europe was the emergence of capitalism through the rise of a culture or “spirit” ofcapitalism.

While his work has been controversial (Swatos and Kaelber, 2005) and oftenmisunderstood (Howard, 2005), over the past 100 years it has been foundational to thegeneralized fields of sociology and economics. More recently, Weber’s work hasbecome foundational to the emerging field of ethnic entrepreneurship (Waldinger et al.,1990; Light and Gold, 2000). While Weber did not seem to have an explicit theoryof entrepreneurship, his conceptualization of capitalism relied upon the “spirit” of theentrepreneur (Swedberg, 2005). Weber’s conceptualization of the entrepreneur does notemphasize Schumpeter’s creative element, however, his conceptualization of capitalismclearly depends on the entrepreneur to bring a “dynamism” to capitalism to counter thenegative effects of bureaucracy by being the “moving spirit” and “directing mind” ofthe enterprise. Weber also distinguished between “new entrepreneurs” who pursuedmoney-making as a calling and the old style entrepreneurs who were satisfied withstatus quo (Swedberg, 2005).

In addition, Weber’s work also recognized the existence of religious and ethnicsubgroups within society whose variant cultures and religious beliefs were reflected intheir distinctive economic behaviors. As such, Weber’s work has become instrumentalto understanding the influence of culture and religion on the entrepreneurial activitiesof various ethnic and religious groups.

The purpose of this paper is to summarize Weber’s thesis as it relates to religion,culture and capitalism and to provide a review of the modern empirical literature(post-1950s) related to Weber’s core thesis.

Protestantism and the spirit of capitalism

The inner-worldly asceticism of Protestantism first produced a capitalistic state, althoughunintentionally, for it opened the way to a career in business, especially for the most devoutand the ethically rigorous people. Above all, Protestantism interpreted success in business asthe fruit of a rational mode of life (Weber, 1922, p. 220)

In the opening section of The Protestant Ethic and the Spirit of Capitalism, Weber(2002) observes that in denominationally mixed regions, “. . . business leaders andowners of capital, as well as the skilled higher strata of the labor force . . . tend to bepredominantly Protestant” (Weber, 2002, p. 1). While Weber spent little timedocumenting the seemingly high correlation between religious denomination and

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economic success, this observation led Weber to seek out the underlying reasons forthe apparent causal role of Protestantism in the creation of modern capitalism.

Weber identified the catalyst of modern capitalism to be a kind of culture or “spirit”of capitalism, which emerged in Western society in the sixteenth and seventeenthcenturies as a kind of entrepreneurial approach to work and the making of profit.Weber (1904a, b, pp. 47-8) vaguely defines “the spirit of capitalism” as those ideals andhabits that are supportive of entrepreneurial economic activity and individual financialgain. In order to become the driving force of change in Western society, this “spirit ofcapitalism” had to overcome significant barriers:

The spirit of capitalism, in the sense in which we are using the term, had to fight its way tosupremacy against a whole world of hostile forces. The most important opponent with whichthe spirit of capitalism has had to struggle, was that type of attitude and reaction to newsituations which we may designate as traditionalism (1904, p. 60).

Weber notes that the inertia of traditionalism, reflected in attitudes towards work,savings and profit which were antithetical to capitalism, could not have been overcomeby a few “heroic” entrepreneurs, but instead had to become a way of life common tosociety as a whole. The impetus for this societal-wide, paradigm-shifting attitude wasthe Protestant Reformation. In particular, Weber focused on the more ascetic sects ofProtestant Christianity (Calvinists, Baptists and Methodists) as the origin of the“spirit” of capitalism.

Asceticism was the social/religious means through which this “spirit” of capitalismdeveloped. Asceticism can be defined as personal abstention and restraint, carried outin a systematic manner (Swedberg, 2005). The religious values of personal restraintand abstention played the key role in forming and spreading capitalism becauseit encouraged people work harder, save what they earned and reinvest the profit.Weber believed that the root of this “spirit” of capitalism lay in the Calvinist angst overthe inherent uncertainty of whether or not he/she was part of the “elect,” predestined toreceive salvation from God. This uncertainty prompted them to embrace a “calling”and to pursue this calling to the “glory of God”:

The world exists to serve the glorification of God and for that purpose alone. The electedChristian is in the world only to increase this glory of god by fulfilling His commandments tothe best of his ability. But God requires social achievement of the Christian because He willsthat social life shall be organized according to His commandments, in accordance with thatpurpose (1904, p. 108).

Personal economic success then, was an indication of God’s favor and so individualswithin Protestant congregations were exhorted to be diligent in every aspect of theireconomic endeavors; they were to work hard, to never waste time, to save theirhard-earned money, to always seek better and more efficient ways of doing things, andabove all, to be honest in the business dealings with your brethren (Jones, 1997).

The result of adherence to these ascetic values was the economic success that Weberhad observed in the opening passage of The Protestant Ethic and the Spirit ofCapitalism. According to Weber’s analysis, this economic success coupled with theadvent of democracy and the conjoint rise of science and industrialization, caused thesevalues to spread and become engrained in secular society. Through this religiousdriven “spirit” of capitalism, instrumentally-rational action (social action directed byscience) guided by value-rational action (social action directed by socio-cultural values)


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supplanted traditional actions (engrained habituation characteristic of fatalistic,pre-industrial society) to create modern rational capitalism (Swedberg, 2005). This new“spirit” of capitalism was a radical departure from more traditionalist perspectives onwork and money because it seemed to espouse “making money for the sake of makingmoney” instead of simply “work to sustain life”:

The religious valuation of restless, continuous, systematic work in a worldly calling, as thehighest means of asceticism, and at the same time the surest and most evident proof of rebirthand genuine faith, must have been the most powerful conceivable lever for the expansionof . . . the spirit of capitalism (1958, p. 172).

In summary, Weber’s The Protestant Ethic and the Spirit of Capitalism was concernedwith understanding the cause behind the germinal development of modern capitalism,which he identified as ascetic Protestantism. Once modern capitalism reached criticalmass, he believed that it would no longer be reliant on its religious origins but wouldinstead be self-sustaining with the ability to create its own mechanisms to expand andreproduce.

Today the spirit of religious asceticism – whether finally, who knows? – has escaped fromthe cage. But victorious capitalism, since it rests on mechanical foundations, needs its supportno longer . . . and the idea of duty in one’s calling prowls about in our lives like the ghost ofdead religious beliefs (1904, p. 181).

Weber did not believe that Protestant asceticism was a necessary condition for thefounding of capitalism. He did, however, believe that some other radical cultural forcewould be necessary to break through the barrier of traditionalism to enable moderncapitalism to rise (Howard, 2005). To further explore this final assertion, Weber soughtto extend his ideas into the analysis of other non-Christian religions in an attempt tounderstand why the Western style of capitalism had not emerged in other countries.

Non-Christian religions and capitalismWeber’s answer to the above question as to why modern capitalism had not emerged inother societies was undertaken in three volumes: Ancient Judaism (1952), The Religionof India: Sociology of Hinduism and Buddhism (1958) and The Religion of China:Confucianism and Taoism (1951). His essential conclusion was that in the other majorreligions of the world, there were no radical cultural forces strong enough to break theconstraints of traditional religious and cultural beliefs on commercial activities(Swedberg, 1999). Weber has been criticized on the point that in most religions, themass of “adherents” really know very little about “salvation” and therefore will belargely unaffected by the religious tenets of the faith. However, while Weberacknowledged the gap between the religious elite and mass religiosity in themajor religions of the world (apart from Protestant Christianity), he notes that in allother cases, the religious elite have effectively enforced traditionalism by dominatingthe social, political and educational institutions and activities. Weber viewed religiousvalues as important motivators for individual economic action or in some cases,inaction. He identified three processes through which religious values affect economicactivity; religious proscriptions of conduct, the legitimization of social and politicalinstitutions and finally, the role of religious ideals as “switchmen” which determine thetrack or direction along which society develops or evolves (Warner, 1973). Throughthese mechanisms then, the entrenched religions and their elite are able to maintain

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the hold of traditionalism thereby denying the emergence of western-style capitalism.In the following sections, we will briefly summarize Weber’s observations with respectto the major non-Christian religions.

The Religion of ChinaThe Religion of China (1951) was Weber’s first work on non-Christian religion. In thisanalysis, Weber focused on those elements of Chinese society and religious belief thatcontrasted with Western Europe and Protestantism. Weber found some compatibilityof ascetic Protestantism and Confucianism in that both encouraged a sober lifestyle,self-control and the accumulation of wealth. However, the primary difference Weberfound was that Confucianism and Taoism accommodate the world in ways that asceticProtestantism does not. Confucianism is the religious ethic of the privileged or vestedinterests where the educated and the patrimonial state maintain the dominance oftradition. Within Confucianism, tradition is sacred and there is no acknowledgementof a transcendental God only a belief in the ancestral spirits, to which you have anobligation. In addition to, the strong hold of traditionalism, education is a form ofpersonal cultivation and not a source of expertise and functional technology (Weber,1951; Warner, 1973).These differences resulted in significant religious-based barriersto the emergence of capitalism. Firstly, technical innovation was discouraged becauseit would potentially disturb the spirits of the ancestors. Secondly, the sale of land wasprohibited. Thirdly, the social structure of extended kinship groups protected itsmembers against economic competition from adversaries thereby discouragingpayment of debts, work discipline and the adoption of innovative and more efficientwork processes. Thus, Confucianism is firmly rooted in the past and in tradition and assuch does not provide the cultural force to break free from the traditionalism thatinhibits the emergence of capitalism:

The relentlessly and religiously systematized utilitarianism peculiar to rational asceticism(Puritanism), to live “in” the world and yet not be part of it, has helped to produce superiorrational aptitudes and therewith the spirit of the vocational man which, in the last analysiswas denied to Confucianism. That is to say, the Confucian way of life was rational but wasdetermined unlike Puritanism, from without rather than from within. The contrast can teachus that mere sobriety and thriftiness combined with acquisitiveness and regard for wealthwere far from releasing the “capitalist spirit” (Weber, 1951, p. 248).

The Religion of IndiaThe Religion of India (1958) was Weber’s second work related to the sociology ofnon-Christian religion. In this work, Weber focuses on the social structure of India andhow it inhibited the advent of capitalism. In the case of Hinduism, the role of karmaand the accompanying caste system maintains the lock of tradition. Karma dictatesthat the individual’s lot in this life is due to their behavior in previous lives. Tradition isenforced through the belief that the only way to “better” one’s state in the next life is byaccepting one’s position in the current life and strictly adhering to the duties one’s casteobligations, including occupational ones (Weber, 1958; Warner, 1973). In this way,karma along with the caste system reinforces social status and the traditional economythereby blocking the advent of a rational type of capitalism:


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. . . it must be considered extremely unlikely that the modern organization of industrialcapitalism would ever have originated on the basis of the caste system. A ritual law in whichevery change of occupation, every change in work technique, may result in ritual degradationis certainly not capable of giving birth to economic and technical revolutions from withinitself, or even facilitating the germination of capitalism in its midst (1958, p. 112).

In sharp contrast to ascetic Protestantism, ancient Buddhism advocates a form ofasceticism that entails the rejection of the world. The goal is to escape from life toarrive at rest and to extinguish “the thirst for life” and enter the eternal dreamless sleepof Nirvana (Weber, 1958; Swedberg, 2005). Buddhism’s belief in the source of salvationas mystic meditation made it distinctly “other worldly” and almost completelydisconnected from the here and now with no incentive for rational economic activity:

Assurance of one’s state of grace, that is, certain knowledge of one’s own salvation isnot sought through proving oneself by any inner-worldly or extra-worldly action, by “work”of any kind, but, in contrast to this, it is sought in a psychic state remote from activity?(1951, p. 213).

Weber again concludes in his analysis in the Religion of India that Hinduism is firmlyrooted in the past and in tradition and as such does not provide the cultural force tobreak free from the traditionalism that inhibits the emergence of capitalism whileancient Buddhism is so cosmically disconnected with the world that any rationaltype of economic activity is impossible.

Ancient JudaismWeber’s third and final work related to the sociology of non-Christian religions was hisexploration of ancient Judaism (Weber, 1952). In this work, Weber sought to explainwhy Christianity evolved to be so different from the religions of the Orient. Weber’sthesis here is that the prophetic and traditions of religious law of ancient Judaism laidthe groundwork for Christianity and Western civilization.

In contrast to, Buddhism which seeks to withdraw from the world throughmeditation, Western Christianity seeks to be “in the world, but not of the world”; in akind of inter-worldly asceticism. Weber asserts that this willingness to engage theworld has its foundations in ancient Jewish prophecy. The current structure and realityof the world is the result of man’s actions and God’s response to those actions.Therefore, a man’s moral conduct, reflected in his/her adherence to the law, determinewhether or not he and his family could enjoy God’s blessing now and for subsequentgenerations. This form of covenant relationship with the Creator was very differentfrom the religions of the Orient. In contrast to, religions of the east, ancient Judaismwas essentially free of “magic” where man’s standing with respect to God and hissubsequent salvation was determined by the individual’s study and adherence tothe law:

The paradigm of the one super-worldly god constructs him in part as a father . . . (who) loveshis people, yet when it disobeys he punishes it sternly, but can be won again through prayer,humility and moral conduct (Weber, 1951, p. 398).

This rational, legal paradigm laid the groundwork for Western civilization and moderncapitalism. Bendix (1960, p. 264) in his book Max Weber: An Intellectual Portraitprovides a succinct summary of Weber’s thesis:

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Free of magic and esoteric speculations, devoted to the study of law, vigilant in the effort todo “what is right in the eyes of the Lord” in the hope of a better future, the prophetsestablished a religion of faith that subjected man’s daily life to the imperatives of a divinelyordained moral law. In this was ancient Judaism helped create the moral rationalism ofWestern civilization.

Weber concluded that the hold of religious traditionalism prevented the emergence ofWestern-style capitalism in China and India. In addition to, the above religious andcultural constraints to modern rational capitalism, Weber noted that the developmentof modern capitalism in the West was the result of a path-dependant evolutionarytrack that was centuries long and which was accompanied by the development ofcomplementary rationalized organizations and systems such as accounting, law andtechnology (Swedberg, 1999). These same complementary systems did not developwithin China and India.

In the following section, we review the modern (post-1950) research that hasaddressed the Weberian thesis.

Review of the empirical literatureResearch on the Protestant work ethicThe research on the component constructs of the Protestant work ethic (PWE) has beenquite fruitful. Studies relating to the constructs of Asceticism, Work Ethic, Use ofTime, Innovation, Honesty, Attitudes Toward Money, and Divine Justice haveprovided significant evidence to support (as well as a few that showednon-significance) the proposals of Weber (Jones, 1997). We will highlight a few ofthe exemplary studies noted by Jones (1997) and supplement them with several of themore recent pieces of importance.

Studies of an internal versus an external locus of control have been the predominantmechanism by which Asceticism has been addressed (Furnham and Rose, 1987;Kleiber and Crandall, 1981; Mirels and Garrett, 1971), with relatively robust results.In addition, Greenberg (1977) found that students that scored high on a Protestant ethicscale tended to perform better after negative feedback, while those that scored low onthe scale had a reduction in performance. Finally, individuals with a high Protestantethic were more likely than those without to maintain their effort despite experimentalmanipulations in a study by Tang (1990).

With regard to work ethic, Greenberg’s (1977) study found that there was not asignificant drop-off in performance in later periods versus earlier in persons with highProtestant ethic. This is of even greater significance when tied to Merrens and Garrett’s(1975) findings that showed those with high PWE were more productive overall,although Ganster (1981) found no difference in performance. Saal (1978) found that thejob involvement of high PWE individuals was significantly higher, and furtherevidence of this involvement was provided by Greenberg’s (1978a, b) which showedthey also would rather be working than the ride to work. Even when they are notproductive, the behavior of high PWE’s differs. They tend to blame themselves whenthey are unemployed (Furnham, 1982). While unemployed, the high PWE personwould likely be in a quandary, because they would have supported a hard lineon non-workers and those who collect welfare (Heaven, 1990; Furnham, 1984a, b).

Usage of time has been studied primarily along the lines of what do I do when not“at work” and how much time does that entail. In Greenberg’s (1978a, b) study, he not


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only found that high PWE workers not only preferred to be at work rather than on theway to work, they actually did work while traveling to work. Furnham (1984a, b) foundthat high PWE individuals scored lower on Leisure Ethic Scales; however, Kleiber andCrandall (1981) found no relationship between PWE and Leisure Ethics in their sampleof college students. In their study of 422 American college students, Wentworth andChell (1997) found that younger, undergraduate students scored higher on the PWEscale than older, non-American, graduate students. These findings were contrary totheir hypothesized direction, but they still point out the importance of demographicsegmentation when considering PWE levels, and potentially their effects.

Extension to other faith/belief systems and entrepreneurial behaviorWeber’s (1958) interest in the differential effects of other belief systems (outside ofProtestantism) on their capitalistic behavior was evidenced by his work relatingto religions such as Buddhism and Hinduism. As might be expected, some ofthe studies have emanated from the assertion that the behaviors proposed areidiosyncratic to the Protestant Christian religion. Baumann (1998) noted that thereare many similarities in the religious philosophies of Buddhism and the idealtype addressed by Weber. He also notes some interesting differences. Indeed, heseems to imply that there are some elements of Buddhism that may have atendency to create greater social consciousness and behavior within the Buddhistcommunity. The most important difference stated is related to the motivation oftheir behavior. Buddhist philosophies are said to be motivated by a sense of desireto develop spiritual growth, both as an individual and as a Buddhist community.It is also posited that an additional motivation of extending Buddhist perspectivesinto the resident culture was a desirable outcome as well. The Calvinist or Puritan(Baumann, 1998) motivation is to please God, who they were predestined as his electto be blessed by Him.

Studies have also been conducted on the effects of the Islamic work ethic ascompared to the elements of the PWE. While this research does not specificallylook at the effects on entrepreneurship, it does look at the relationship tointrapreneurial behavior (Yousef, 2001). This may well provide a springboard fromwhich comparative evaluation of likelihood and type of entrepreneurial activities isrelated to the base and degree of religiosity. One particularly intriguing piece ofresearch showed evidence that Muslims in Turkey actually scored higher on PWEthan did Great Britain Protestants and Irish Catholics (Arslan, 2001).

Some research has provided evidence that religiosity (as measured byattendance, impact of belief, and adherence) has little effect on entrepreneurialbehavior (Dodd and Seaman, 1998). They did not attempt to obtain findings relativeto affiliation due to small sample sizes for many of the religious groups. They donote that this study is focused on the individual entrepreneur, while Weber’s workis on a societal level. This is important in that for Weber’s theory to hold true,it would have to be independent of the need for the actors (the entrepreneurs) to beaware of the effects. Furthermore, the sample was drawn from a highly secularized(though significantly Protestant) society, which should, according to somesociologists (Bruce, 1992, 1995), reduce the effects of religiosity on the society asa whole. This would tend to homogenize society and open it to higher degrees ofentrepreneurship.

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Culture/ethnicity/religion/social capital and entrepreneurial behaviorWhile it has long been accepted that the relationship between cultural values, socialinstitutions, and industry characteristics will affect areas such as entrepreneurship, theempirical evidence has been lacking (Hayton et al., 2002). Indeed, many studies haveactually used such proxies as nationality for culture (Shane et al., 1991; Scheinberg andMcMillan, 1988; Mueller and Thomas, 2000; Thomas and Mueller, 2000). This isproblematic in that cultural values may differ widely within regions of the country(Dodd et al., 2002). While their findings have provided evidence of direct relationships,they leave the deeper question of the makeup of the social construct largelyunanswered. The importance of each and their differential impacts do not negatethe need to look at their interrelationships within the societal construct. Indeed, themakeup of the individual components may well be of interest in further understandingtheir entrepreneurial behavior.

Cultural differences have been studied across a plethora of countries ranging fromthe USA and Great Britain, to the Arabic countries, Sri Lanka (Niles, 1994), andUganda (Baguma and Furnam, 1993). These studies have found that significantdifferences exist between these nationalities’ overall PWE scores. However, there aresome intriguing similarities across nations as well. McGrath et al. (1992) surveyed770 entrepreneurs from 14 countries and found that even with diverse culturalbackground (measured in the survey rather than inferred from nationality),entrepreneurs tended to share their perceptions of non-entrepreneurs. For example,in countries characterized as highly individualistic were found to hold an internal locusof control by Mueller and Thomas (2000) and, when coupled with a low uncertaintyavoidance culture, rated the highest on entrepreneurial orientation.

Religious institutional membership’s connection to culture and social capital isanother area of potential study that has shown significant promise for researchers. In astudy of Brazilian communities within the USA, Martes and Rodriguez (2004) foundthat Protestant church membership provided a higher degree of social capital toentrepreneurs than did Catholic Church membership operating within the samesocio-cultural environment.

Finally, social capital and networks have been tested empirically and have foundsolid support for its positive effects on entrepreneurial behavior (Hills et al., 1997).Entrepreneurs with advantageous access to people and their established networks forfinancial capital and knowledge have advantageous position to those without the samedegree of social capital, in recognizing and evaluating their opportunities (Ozgen andBaron, 2007; Baron and Markman, 2003; Shane and Cable, 2000). Social capital can alsoreduce transaction costs by allowing the entrepreneur access to the trust built upwithin their network and the needed resource markets (Fukuyama, 1995; Nahapiet andGhoshal, 1998; Williamson, 1975). These cost advantages can create a resource that issustainable to the degree they are difficult, or costly to replicate (Barney, 1991). Thereis some evidence that these advantages may only apply to the likelihood of successfulstartup in that Lechner et al. (2006) found social networks to be unrelated to time tobreakeven and negatively related to overall sales in venture-capital funded enterprises.

It is important that we develop a better understanding of how this socio-cultural andsocio-economic model is connected. This has implications for many of the problemsfaced by society as a whole, including poverty, distribution of wealth, injustice, andecological stewardship to name a few. Several avenues and potential paths for research


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are noted by Hayton et al. (2002). Some of these are methodologically oriented, such aslooking at differences between groups rather than similarities, level of analysis(individual versus cultural) and overdependence on past metrics such as Hofstede’s(1980) indices rather than constructing new methods and measures that will allowresearchers to address the complexity of these relationships. Indeed, the dependentvariable “entrepreneurship” may well need to be looked at in a multi-faceted manner.For example, Hayton et al. note that the definition of entrepreneurship has includedsuch diverse areas as innovative, high growth firms and small, family owned andmanaged businesses. The specification of the measure can have profound effects on thefindings of the phenomena and its effects.

The economic effectWith all of these socio-cultural factors affecting the work ethic and economic behaviorof individuals, what exactly does this translate to in an overall economic sense? Recentstudies have looked at the effects of religion on economic growth of countries. Barroand McCleary (2003) found that the degree of belief in religion, particularly in suchareas as the existence of heaven and hell, is positively related to the economic growthof the country. Interestingly, they also found that church attendance rates werenegatively related to growth. Additional research has indicated that faith has profoundinfluence on attitudes conducive to growth and the path by which that faith evolvesalso plays a role in the degree of these attitudes (Guiso et al., 2003). Their findingsregarding religion also indicates that religious people tend to have increased trust ineach other, while some religious traditions (particularly Muslims and Hindus) are lesstolerant on some gender and ethnicity differences.

Concluding commentsAfter 100 years Weber’s works clearly remain seminal to the field of ethnicentrepreneurship. The Protestant Ethic and the Spirit of Capitalism has provided aconceptual foundation upon which to explore the effect of religion and culture oneconomic activity. It is important to note that we spent a great deal of time, effort, anddiscussion on properly positioning these pieces to provide a broad brush perspectiveon the directions of the previous research in this field. Without question, thecomplexity of this field of study will only become more pronounced as we continue todeal with the interactions between religion, ethnicity, culture, politics, and economies ina dynamic world. This provides an exciting and challenging environment for scholarsfor years to come.

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Further reading

Furnham, A. (1985a), “Why do people save? Attitudes to, and habits of, saving money in Britain”,Journal of Applied Psychology, Vol. 15, pp. 354-73.

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Weber, M. (1921), Gesammelte Aufsatze zur Religionssoziologie, J.C.B. Mohr, Tubingen, 3 vols.

Weber, M. (1993), The Sociology of Religion, Beacon Press, Boston, MA.

About the authorsJoel A. Ryman was awarded his PhD in Business Administration from the University ofTennessee in 1999. Prior to receiving his PhD, he worked in pharmaceutical industry for sevenyears. While strategic management remains his primary research focus. He is also exploring theareas of spirituality and entrepreneurship. Joel A. Ryman is the corresponding author and can becontacted at: [email protected]

Craig A. Turner earned his PhD in Strategic Management at the University of Tennesseeat Knoxville in 1999, following 12 years of experience in the field of finance and riskmanagement. His primary areas of research revolve around entrepreneurship and risk.E-mail: [email protected]


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