Business is an essential part of the society; this is because it creates employment, offers goods and services by bringing tangible and intangible assets near the consumers. A conducive environment for people to interact is also established during business transactions. Through trade, people of different races, colors, heights, shapes and sizes associate, bringing about the appreciation of distinct culture as people get to learn different cultures other than their own. Society will thrive where a business will be doing well, for example, many of the world's biggest cities and towns are found where more than one culture exist and do business. In this paper I will be reviewing why black-owned firms are not as successful as the white-owned ones; I will try to explain my points from an emic and etic point of view.
First, little effort has been put on the predicaments of blacks in the primary way of making a living through business ownership. Majority of the working age in the United States own business to help cover some of the bills. Only a handful of blacks are self-employed compared to the majority of the whites who own their own business (Fairlie, 2007). Studies were done recently examined the causes of the scarcity in black-owned firms. The studies provide reviews that come out with the findings on low levels of education as the primary cause. These results are informative, but they do not shed light on why black-owned firms lag behind white-owned firms. Black-owned firms experience lower profits resulting into lower revenues. They also hire fewer employees and are more likely to run out of business, unlike white-owned companies. Although the general sentence provides a summary of many black, not all blacks’ businesses make low profits and not all whites make high profits. However much the sentiments highlighted above could be correct, it is also accurate to consider the possibility of knowledge failing to be a prerequisite in the success of a business. Hence, this paper focuses on poverty as the main point and exposure to the success of a business. Exposure plays a vital role in human mental development, it opens up a person's mind, and one starts reasoning outside the box. Majority of blacks have been born in black neighborhoods, attended black's school, and married a black wife. There is lack of exposure there, and this may be the most significant reason why the majority of their businesses fail to do well due to lack of new and diverse ideas.
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Lack of success of the black-owned business is a preeminent concern in the United States. Going back into history, business ownership has been a channel of economic advancement for marginalized individuals. African Americans have made little progress in the rates of business ownership even in light of the substantial gains in education, earnings, and civil rights that they have made during the twentieth century (Fairlee, 2007). Their disinterest in entrepreneurial aspects is a core reason of concern for lack of success in business. The 3 to 1 ratio of white to black self-employment rates has remained roughly constant over the past 90 years (Fairlie & Meyer 2000). Also, recent inexperience in business management and ideas has played a big part in the low rates of business ownership among blacks. Little levels of black businesses ownership are caused by insufficiency of black traditions in the business enterprise. People will try to associate themselves or identify themselves with what their ancestors used to do. Basing on this, lack of business enterprise in their past maybe the reason why blacks are not doing well in the business sector. Insufficiency of black culture in business relies on the active genetic link to business ownership. We might expect a stable connection through the passing of general business ideas and managerial skills in the companies owned by the family. Taking over the firm or specific business experience in family business, the inheritance of family businesses, and the correlation among family members in preferences for entrepreneurial skills is often a kinship tradition passed from one generation to the other (Fairlie, 2007). Past research ascertains that indeed the statement mentioned above is regularly valid and applicable.
The probability of self-employment is higher in children of the self-employed. According to the science, how the structure of our body functions in a way that children always take after their parents. For example, if the father is a carpenter, the child will learn the art of carpentry at a younger age. The children will more than once accompany their parents to the places of work. Over time, the children acquire the skills and behavior of their parents through observation, education, and apprenticeship. The same case with businesses, the child will prefer self-employment to being employed because that is the environment they have been raised.
From an emic point of view, people are always ready to point fingers and prepared to judge why blacks businesses still make less profit. A lot of considerations must be put in place before jumping into conclusion over the same. First white firms and black firms concentrate on different industries which are categorized differently, and it is always unfair to compare these services that fall under different hoods. Firms owned by blacks are diminished in the manufacturing, construction, wholesale, agricultural products, finance, real estate, and insurance which attract fewer profits relative to white firms. Black firms concentrate more on transportation, communications, public utilities, and personal services than white firms (Fairlie, 2007). The firms owned by black are associated with worse outcome. Differences in the industry distributions may be due to capital constraints, skill differences where a majority of the blacks barely attend university, discrimination, and differences in preferences. Human beings are versatile and unique and should be allowed to have different needs and wants.
Discrimination is giving a person different treatment and reception viewed as favors based on the group, class, and category that they are perceived to belong. These groups include race, ethnical origin, religion, color, age, disability, gender identity, marital status, sex, genetic orientation, and many more. In this article, emphasis will be given to color since our focus is in line with blacks in business. Considering this is the 21st century, discrimination should be a thing of the past given the significant milestones that have been achieved over the years. However, as is usually the case in nature, humans never let go of some characters. People are ready to point fingers and treat others inhumanely because of the color of their skin. The reason why the majority of blacks’ businesses do not blossom is that black people are associated with thuggish life and gangster morals. White firms benefit from this perception as many customers do prefer transacting businesses with them over blacks. Potential buyers are often driven and influenced to purchase goods at white firms which are considered harmless. However, this is usually not the case in every instance since some of these black people could be more reserved and offer better services as compared to their white counterparts. They should not be subjected to the general moral perception and categorization of the public that has been developed over the years.
Ethnocentrism is where one views their culture as more superior than others. It explains why a more significant population of the total black-white gaps exists in small business outcomes. They teach nearly 50% of the racial divide in profits or employment and almost 70% of the overall shortfall in log sales (Fairlie, 2007). Racial differences explain the black-white gap in business closure rates. The remaining portion of the racial disparities in small business outcomes may be due to lending discrimination and consumer discrimination against black-owned firms. The omission of relevant immeasurable factors such as risk aversion and networks, or the inability to accurately measure racial differences in access to capital creates the center stage for the discrimination (Fairlie, 2007). Ethnocentrism makes it hard for black firms to grow as the whites who are the majority view African Americans as lesser beings as compared to them.
Black-owned businesses are less likely to be inherited than white-owned businesses. Inherited companies are more successful than non-inherited companies. The reason for this is that the inherited business has been in existence long enough and has attracted regular buyers. Alternatively, businesses that have been inherited are preferred over new businesses since they have transformed themselves into a successful brand by building a reputation over the years. The overall likelihood of business inheritances is too little to play a significant role in defining racial differences in business outcomes (Fairlie, 2007).
The findings are overwhelming in light of the outcome in the literature that blacks are less likely to receive inheritances and typically receive much smaller bequests than whites (Fairlie, 2007). It is evident to say that that failing of legacies among African Americans is one of the primary reasons that explain why blacks have lower assets than white levels. It can, therefore, be concluded that smaller levels of inheritances among blacks contribute to litter percentage of business ownership is a myth. The purpose of this perception is to make African Americans focus on business inheritances and small business outcomes.
Conclusion
In conclusion, human beings should interact without boundaries, having a white, red, yellow or black skin should not provide an avenue for judgment and disrespect. All people are equal irrespective of their skin color. The services will always be the same depending on where you buy them. It does not matter where you got them for example when you buy a truck from a white dealer or black dealer it won't change the name from being called a car. To achieve greatness we all have to allow ourselves to learn the new culture and interact with different people from different races. Exposure is a fundamentally new experience that opens up new channels in our lives, and we should always embrace an opportunity to share and learn new ways of life. Cultural diversity provides equal opportunities for everyone to grow and thrive.
References
Bates, T. (2005). Analysis of young, small firms that have closed: delineating successful from unsuccessful closures. Retrieved on 22 April 2018 from
https://www.sciencedirect.com/science/article/abs/pii/S0883902604000308
Fairlie, R.W. (2003). Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital Retrieved on 22 April 2018 from
https://www.journals.uchicago.edu/doi/full/10.1086/510763
Wilson, K. L. & Martin, W. A. (1982). "Ethnic Enclaves: A Comparison of the Cuban and Black Economies in Miami," American Journal of Sociology. Retrieved on 22 April 2018 from
https://www.journals.uchicago.edu/doi/abs/10.1086/227637
