Research 2001 - 2011

Expanding the Boundaries of Effectuation

Research Paper Title Authors Content Outlet Publish Date Link To File
Without judgment: An empirically-based entrepreneurial theory of the firm. Saras Sarasvathy
Nick Dew
Austrian ideas about the firm have grown rather naturally out of the central body of Austrian thought with its focus on entrepreneurship, subjectivism and market processes. In this paper we critically evaluate some Austrian ideas on the firm, with particular attention to the concept of entrepreneurial judgment. We then describe recent empirical work in entrepreneurship that has identified key elements of what might reside inside the “black box” of entrepreneurial decision making. We conclude that expertise in this type of decision making embodies procedural knowledge that is adaptive in the absence of substantive knowledge, i.e. without judgment. Review of Austrian Economics 2011 PDF Download
Why and How Will a Group Act Autonomously to Make an Impact on the Development of Organizational Capabilities? Krsto Pandza In this paper I report the findings of an inductive, interpretative case study of proactive and autonomous actions instigated by a group at a major pharmaceutical firm in order to accelerate and shape organizational capability at this firm. This two-year field research was seen as an ideal vehicle for investigating why a group within a firm proactively engages with a pattern of capability development, how such proactive engagement is conducted, and what these proactive activities are. I assert that autonomous action originates from intra-firm heterogeneity of group-level cognitive frames and social identities. The evidence suggests that a group with a particularly distinct perception of the strategic value of a capability will be more likely to initiate autonomous action with the aim of making an impact on capability development. The likelihood of autonomous action increases further if a group acts to strengthen the distinctiveness of its own identity by raising the perceived value of a capability that compares unfavourably with other firms’ capabilities. The field observations suggest that in circumstances of high inter-group dependency and limited group authority, the group attempts to make an impact on capability development by adopting creative and socially complex framing practices. The group formalizes a collective and cognitive search process in order to legitimize the preferred action and subtly sells the issue to higher authority without causing conflict, while still sustaining the group’s intent. Journal of Management Studies 2011 PDF Download
What Effectuation is Not. Working paper, accessed from old.effectuation.org. Nick Dew
Stuart Read
Saras Sarasvathy
Rob Wiltbank
  Working Paper 2011 PDF Download
Venture failure, stigma, and impression management: A self-verification, self-determination view Dean Shepherd
Michael Haynie
We offer a theoretical basis for understanding how and to what end entrepreneurs employ impression management strategies in response to the negative attributions associated with the stigma of venture failure. Our framework offers counterintuitive insights into why some entrepreneurs stigmatized by failure will use impression management strategies to align their conception of self with how others perceive them—even if that means adopting a negative view of self. Our model highlights a potential paradox related to competing individual (the entrepreneur) and organizational goals, with regard to actions positioned to enhance the psychological well-being of the failed entrepreneur. Copyright © 2011 Strategic Management Society. Strategic Entrepreneurship Journal 2011 PDF Download
Unpacking the uncertainty construct: Implications for entrepreneurial action Alexander McKelvie
Haynie M
Veronica Gustavsson
Uncertainty is central to entrepreneurship; however robust and generalizable findings that explain the conditions in which uncertainty may impede [or promote] entrepreneurial action remain elusive. We operationalize uncertainty as a multi-dimensional construct composed of state, effect, and response types of uncertainty (Milliken, 1987) to investigate the relationship between uncertainty and entrepreneurial action. We decompose more than 2800 exploitation decision policies nested within a sample of new product decision-makers working in entrepreneurial software firms. We focus on the primary decision-maker’s willingness to exploit a given opportunity in the face of varying combinations and manifestations of uncertainty and find that the type of uncertainty experienced influences the willingness to engage in entrepreneurial action differently. Further, we find that differences in how each type of uncertainty is manifested in the environment, the scale of exploitation (i.e. large vs. small), and the entrepreneur’s expertise serve to moderate the relationship between uncertainty and action in counter-intuitive ways. We discuss the implications for both theory and practice. Journal of Business Venturing 2011 PDF Download
TRYING TO BECOME A DIFFERENT TYPE OF COMPANY: DYNAMIC CAPABILITY AT SMITH CORONA ERWIN DANNEELS Smith Corona, formerly one of the world’s leading manufacturers of typewriters, was challenged to exercise dynamic capability in the face of the dissipation of its main product category. A study of the last two decades of the life of the company shows how Smith Corona tried to alter its resource base by leveraging existing resources, creating new resources, accessing external resources, and releasing resources. Using the extended case method, this study advances dynamic capability theory by confronting it with an empirical case. The Smith Corona case provides rich insights into the resource alteration processes by which dynamic capability operates, and highlights resource cognition as a missing element in dynamic capability theory. Copyright © 2010 John Wiley & Sons, Ltd. Strategic Management Journal 2011 PDF Download
The questions we care about: paradigms and progression in entrepreneurship education Per Blenker
Steffen Korsgaard
Helle Neergaard
Claus Thrane
One of the most frequently discussed topics in the entrepreneurship education literature is current practice in entrepreneurship education with regard to what is taught and how it is taught. The literature on entrepreneurship education is replete with statistics and reviews of entrepreneurship courses and programmes. In this paper, the authors take a different approach and propose a model that transcends the current understanding of entrepreneurship. Instead of asking what entrepreneurship education is and what it does, they ask what ideally it should be and should do. The authors suggest that there is a logical progression between existing approaches – paradigms – to teaching entrepreneurship, and that a fourth ‘new’ paradigm, ‘everyday practice’, constitutes the foundation for all other entrepreneurship education because it establishes the core entrepreneurial competence. They further identify four dimensions as the constituent elements of entrepreneurship as everyday practice. Industry and Higher Education 2011 PDF Download
The New Field of Sustainable Entrepreneurship: Studying Entrepreneurial Action Linking “What Is to Be Sustained” With “What Is to Be Developed” Dean Shepherd
Holger Patzelt
Informed by the sustainable development and entrepreneurship literatures we offer the following definition: Sustainable entrepreneurship is focused on the preservation of nature, life support, and community in the pursuit of perceived opportunities to bring into existence future products, processes, and services for gain, where gain is broadly construed to include economic and non-economic gains to individuals, the economy, and society. To illustrate the diversity of potential research avenues that will advance this field, we offer a research agenda derived from an economics, an institutional, and a psychology perspective. We suggest research questions exploring “what is to be sustained” and “what is to be developed” in sustainable entrepreneurship research. Entrepreneurship Theory and Practice 2011 PDF Download
THE INTERNATIONALIZATION OF SMALL AND MEDIUM-SIZED ENTERPRISES BASED IN TRANSITION ECONOMIES Mai Thi Thanh Thai
LI CHOY CHONG
This paper argues that current theory is ill suited to explaining well the internationalization of small and medium-sized enterprises based in transition economies. By using Straussian grounded theory, this study found that these firms internationalize by conducting multiple concurrent experiments to find strategies to ensure the best fit with their current environment and to optimize their chances of meeting the goals of the firm or its managers. The findings of this research led to the development of a model of dynamic experimental internationalization. Academy of Management Proceedings 2011 PDF Download
The Importance of Slack for New Organizations Facing ‘Tough’ Environments Steve W Bradley
Dean Shepherd
Johan Wiklund
Strategy-based models centre on the management of unique and valuable resources to take advantage of specific market opportunities. Less examined in this approach are the roles of slack resources in the process of generating firm value – particularly for new firms in ‘tough’ environments where fewer opportunities are available. Using a cohort panel of 951 new manufacturing firms over nine years, our findings provide evidence for the importance of financial slack resources in understanding opportunity generation and also for reconciling theoretical arguments regarding the slack resource–performance link. We find that while financial slack does provide buffering capacity (in hostile and dynamic environments), and flexibility for experimentation (in munificent and dynamic environments) as suggested by prior theory, the most positive relationship between financial slack and performance for new firms was in low discretion environments (hostile and stable environments) – where firms need to develop their own opportunities. The implications of these findings for theory are discussed. Journal of Management Studies 2011 PDF Download
The Future of Entrepreneurship Research Johan Wiklund
Per Davidsson
Audretsch, David B.
Karlsson, Charlie
  Entrepreneurship Theory and Practice 2011 PDF Download
The Evolution of Entrepreneurial Competencies: A Longitudinal Study of University Spin-Off Venture Emergence Einar Rasmussen
Simon Mosey
MIKE WRIGHT
This paper aims to better understand the development of entrepreneurial competencies to create new ventures within the non-commercial academic environment. We build upon the evolutionary perspective considering where resources come from to help define these competencies and explain their paths of development. The study follows the creation and early growth of four university spin-offs within the UK and Norway. We identified three competencies of opportunity refinement, leveraging, and championing that appeared crucial for the ventures to gain credibility. Although selected competencies were inherent within the academic founders, the specific competencies for venture creation had to be developed or acquired. This was achieved iteratively through entrepreneurial experience and accessing competencies from disparate actors such as industry partners and equity investors. Propositions are offered to guide future empirical research based upon our framework. Journal of Management Studies 2011 PDF Download
The Cognitive Perspective in Entrepreneurship: An Agenda for Future Research Denis Gregoire
Andrew Corbett
Jeffery McMullen
Despite its many achievements, scholarship at the intersection of entrepreneurship and cognition has focused primarily on the consequences of what happens when an entrepreneur benefits from various cognitive characteristics, resources, or other dispositions. As such, cognitive research in entrepreneurship continues to suffer from narrow theoretical articulations and weak conceptual foundations that lessen its contribution to the managerial sciences. To address these issues, we draw from extant work on the nature and practice of cognitive research to develop a systematic approach to study entrepreneurship cognition. To further articulate this agenda, we assess the state of the field by content-analysing entrepreneurship cognition articles published between 1976 and 2008. We find that, although it has investigated many relevant variables, research on entrepreneurship cognition has failed to fully articulate key conceptual features of the cognitive perspective. Building on these observations, we propose concrete strategies and research questions to augment the contribution of entrepreneurship cognition research, and advance this research beyond its current focus on ‘cognitive consequences’. In particular, we illustrate the scholarly potential of disentangling the various antecedents of entrepreneurship cognition, of studying the process interactions between cognitive resources and mental representations, and of exploring the operation of entrepreneurship cognition across levels of analysis. Journal of Management Studies 2011 PDF Download
Testing management theories: critical realist philosophy and research methods Kent D Miller
Eric W. K. Tsang
This study identifies the practical and philosophical difficulties associated with testing strategic management and organization theories. Working from a critical realist perspective, we affirm the importance of falsification and verification efforts for progress in theory development. We advocate a four-step approach for advancing theory testing that prioritizes identifying and testing for the presence and effects of hypothesized causal mechanisms, rather than solely focusing on correlational methods to jointly test the set of effects composing a theoretical system. Going beyond prior critical realist writings, we provide practical guidance for deploying established research methods to test management theories. Copyright © 2010 John Wiley & Sons, Ltd. Strategic Management Journal 2011 PDF Download
Swinging a double-edged sword: The effect of slack on entrepreneurial management and growth Steve W Bradley
Johan Wiklund
Shepherd Dhliwayo
Resource slack represents a double-edged sword, simultaneously fueling and hindering growth. Drawing on Penrose’s growth theory and Stevenson’s entrepreneurial management theory, we have developed and tested a conceptual model that provides a more nuanced account of the resource slack-growth relationship. Using a large dataset spanning six years, we have found that slack has a positive direct effect on growth but a negative effect on entrepreneurial management, and that entrepreneurial management has a positive effect on growth. Our empirical and conceptual findings are important to the development of firm growth theory and explicate causal mechanisms transforming slack into firm-level outcomes. Journal of Business Venturing 2011 PDF Download
Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society Michael A Hitt
R Duane Ireland
David Sirmon
Cheryl A. Trahms
The foci of strategic entrepreneurship (SE) are broad and rich, building on research from multiple disciplines such as economics, psychology, and sociology, along with other subdisciplines in management including organizational behavior and organization theory. Herein, we examine the contributions of strategic management and entrepreneurship to SE. Building on a previous model of SE, we develop an input-process-output model to extend our understanding of the SE construct. We examine the resource inputs into SE, such as individual knowledge and skills. In addition, we explore the resource orchestration processes that are important for SE and the outcomes, including creating value for customers, building wealth for stockholders, and creating benefits for other stakeholders, especially for society at large. Individual entrepreneurs also benefit through financial wealth, but other outcomes such as personal satisfaction and fulfillment of personal needs (e.g., self-actualization) may be of equal or even greater importance. Therefore, we incorporate in the model of SE multilevel outcomes that motivate entrepreneurs. The Academy of Management Perspectives 2011 PDF Download
Socially Situated Cognition: Imagining New Opportunities for Entrepreneurship Research Ronald Mitchell
Randolph-Seng Brandon
J. Robert Mitchell
  Academy of Management Review 2011 PDF Download
Social networks and opportunity recognition: A cultural comparison between Taiwan and the United States RONG MA
YEN CHIH HUANG
ODED SHENKAR
This paper investigates the moderating effect of national cultural contexts on the relationship between social networks and opportunity recognition. Data obtained from Taiwan and the United States support the proposition that cultural contexts, specifically the individualism-collectivism dimension, moderate the relationship between tie strength, structural holes, and opportunity recognition. Results indicate that in the United States, tie strength is negatively associated with opportunity identification and structural holes are positively associated with opportunity identification; whereas in Taiwan we find the opposite. The results also show that the interaction effect between bridging ties and tie strength on opportunity recognition varies depending on the cultural context. Copyright © 2011 John Wiley & Sons, Ltd. Strategic Management Journal 2011 PDF Download
Social interaction via new social media: (How) can interactions on Twitter affect effectual thinking and behavior? Eileen Fischer
Becky Reuber
Social interaction plays a central role in effectuation processes, yet we know little about the implications for effectuation when an entrepreneur interacts via particular channels such as social media. To address this gap, our paper uses an inductive, theory-building methodology to develop propositions regarding how effectuation processes are impacted when entrepreneurs adopt Twitter. Twitter is a microblogging platform that can facilitate a marked increase in interaction. We posit that Twitter-based interaction can trigger effectual cognitions, but that high levels of interaction via this medium can lead to effectual churn. We also posit that there is one factor, perceived time affordability, that predicts the level of social interaction in which an entrepreneur engages via Twitter. Further, we propose two factors that moderate the consequences of social interaction through Twitter. These factors are community orientation and community norm adherence. Implications for our understanding of effectuation, of social interaction, and of the impact of social media on entrepreneurial firms are discussed. Journal of Business Venturing 2011 PDF Download
Social Entrepreneurship: A Critique and Future Directions M. Tina Dacin
Peter A. Dacin
Tracey, Paul
Work on social entrepreneurship constitutes a field of study that intersects a number of domains, including entrepreneurial studies, social innovation, and nonprofit management. Scholars are beginning to contribute to the development of this new discipline through efforts that attempt to trace the emergence of social entrepreneurship as well as by comparing it to other organizational activities such as conventional entrepreneurship. However, as a nascent field, social entrepreneurship scholars are in the midst of a number of debates involving definitional and conceptual clarity, boundaries of the field, and a struggle to arrive at a set of relevant and meaningful research questions. This paper examines the promise of social entrepreneurship as a domain of inquiry and suggests a number of research areas and research questions for future study.mi Organization Science 2011 PDF Download
SIMULATING THE CLASH OF EFFECTUAL AND CAUSAL PROCESSES: INVESTIGATING CONDITIONS & BOUNDARIES FOR MARKET SUCCESS (SUMMARY) Jan Schlueter
Malte Brettel
Since Sarasvathy’s seminal publication (2001), research on the effectuation theory has proceeded to detailing elements, differentiation from extant theories, and lately first empirical investigations (e.g., Sarasvathy & Dew, 2008). Initial studies linking effectuation to performance in specific environments such as new ventures or business angel investments have shown empirical evidence of a positive performance impact (e.g., Wiltbank et al., 2008; Read et al., 2009). However, limited progress has been made in comprehensively investigating the critical question under what circumstances which strategy provides particular advantages and disadvantages (Sarasvathy, 2001), leaving requirements and boundaries for normative superiority still largely unknown (Chandler et al., 2009). In order to investigate this issue, we examine a set of conditions and success factors for effectual vs. causal artifact creation by employing agent-based simulation experiments. This study examines effectual and causal processes in the formal environment of computer simulation. We model the strategies and an environment including performance measures and uncertainty elements and assess performance for different uncertainty levels. More specifically, we seek to formally investigate specific boundaries of the “effectual problem space” (Sarasvathy, 2001) for an artifact creation task (Sarasvathy & Dew, 2005) and a pay-off landscape driven by fit with market preferences. Frontiers of Entrepreneurship Research 2011 PDF Download
Should I stay or should I go? Career choice intentions of students with family business background Thomas Zellweger
Philipp Sieger
Frank Halter
Personal and motivational patterns of intentional founders have been researched in great depth; however, antecedents to career choices of intentional successors have been conspicuously missing in entrepreneurship research. By drawing on theory of planned behavior, we investigate how intentional founders, successors, and employees differ in terms of locus of control and entrepreneurial self-efficacy as well as independence and innovation motives. We find that transitive likelihood of career intent depends on degree of entrepreneurial self-efficacy and the independence motive. Unexpectedly, we see that high levels of internal locus of control lead to a preference of employment, which challenges traditional entrepreneurship research and suggests that the feasibility of an entrepreneurial career path does not automatically make it desirable. Our findings suggest that students with family business background are pessimistic about being in control in an entrepreneurial career, but optimistic about their efficacy to pursue an entrepreneurial career. Journal of Business Venturing 2011 PDF Download
Resilience of Family Firms: An Introduction James J Chrisman
Jess Chua
Lloyd P Steier
Family firms have long been a prominent feature of the organizational landscape and researchers have found some variations of this organizational form to be more resilient than others. The articles and commentaries in this special issue address some of the bases of this resilience including arranged marriages as a management succession strategy, long-term orientation and multitemporal perspectives, knowledge structures and opportunity identification, and social capital and social exchange. This introduction to the eighth special issue on “theories of family enterprise” discusses the contributions made by the articles and commentaries to our understanding about the resilience of family firms. Entrepreneurship Theory and Practice 2011 PDF Download
Recognizing Opportunities for Sustainable Development Holger Patzelt
Dean Shepherd
Building on the entrepreneurial action and sustainable development literatures, we highlight how the current explanations of opportunity recognition, based on entrepreneurial knowledge and economic motivation, are insufficient for modeling the recognition of opportunities for sustainable development. Our model suggests that entrepreneurs are more likely to discover sustainable development opportunities the greater their knowledge of natural and communal environments become, the more they perceive that the natural and communal environment in which they live is threatened, and the greater their altruism toward others becomes. We propose that entrepreneurial knowledge plays a central role by moderating these effects. Entrepreneurship Theory and Practice 2011 PDF Download
Persistence and heterogeneity in entrepreneurship: An evolutionary game theoretic analysis Graciela Kuechle Studies show that countries exhibit a relatively stable level of entrepreneurial activity. To account for this fact, we adopt an evolutionary game theoretic approach. Based upon the analysis of games that capture essential features of the entrepreneurial phenomenon, we ascertain conditions under which evolutionary stable equilibria will be played by a population consisting of agents who engage in entrepreneurship and agents who do not. We show that entrepreneurship may persist even without assuming strategic complementarities or group selection. Lastly, we explain how information about equilibrium payoffs to self- and paid employment could help address the question of whether entrepreneurs differ from other economic agents. Journal of Business Venturing 2011 PDF Download
Organizational Contexts for Environmental Construction and Objectification Activity William McKinley This paper argues that organizations are the source of an adaptation–construction cycle. In that cycle, the consequences of organizational adaptations to current environmental states are constructed by the organization’s managers into new environmental states. Therefore organizational action in response to environmental conditions has both an adaptive component and an unintended environmental enactment component. The paper identifies attributes of adapting organizations that increase the level of managerial activity devoted to environmental construction and objectification. The theoretical logic of delineating these organizational attributes moves the paper beyond present versions of enactment theory, ‘social construction of reality’ theory, and structuration theory to focus on predictors of variation in concrete activity resulting in environmental construction and objectification. Based on the discussion of the organizational predictors, propositions to be tested in future empirical research are offered. Also, the propositions are used to suggest extensions to enactment theory, social construction of reality theory, structuration theory, and contemporary versions of neo-institutional theory. These extensions are detailed in the discussion section. Journal of Management Studies 2011 PDF Download
On the Entrepreneurial Genesis of New Markets: Effectual Transformations Versus Causal Search and selection Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
The generation of new markets is an emerging area of interest among researchers working in the traditions of evolutionary economics. And true to those traditions, the current study incorporates empirical evidence from psychology and cognitive science to develop micro-foundations for evolutionary theories of new market generation. In this paper we present an in-depth analysis of how expert entrepreneurs use effectual logic to conceptualize the creation of new markets. Our results challenge received wisdom based on search and selection processes and move beyond combinatorial ideas to develop instead a “transformational” view of market genesis.   2011 Download PDF
Managing Disruptive Innovation: Entrepreneurial Strategies and Tournaments for Corporate Longevity. Yanto Chandra
S J S Yang
Extant research on disruptive innovation has implicitly incorporated entrepreneurship as the underlying driver of the disruptive phenomenon. We integrate recent developments from entrepreneurship and innovation research streams to better understand the conditions and causal mechanisms that influence disruptive innovation. Drawing on effectuation, evolutionary entrepreneurship, lead-users, collective intelligence, and opportunity tournament literature, we develop a theoretical framework that explains disruptive innovation as a co-evolutionary entrepreneurial process at the firm, product, and customer level. The framework offers a set of testable propositions to advance theory and practice in the field. We suggest avenues for future research and conclude entrepreneurial strategies to help general managers create and cope with disruptive innovation. SSRN 2011 Download PDF
Linking Effectuation to Causation in Chinese High-Tech Entrepreneurship: Strategic Framing Based on Culture, Cognition and Institutional Context. YiPeng Liu
A Issak
  RESEARCH IN ENTREPRENEURSHIP AND SMALL BUSINESS 2011 Not Available
Language, Communication, and Socially Situated Cognition in Entrepreneurship Jean Clarke
Joep Cornelissen
  Academy of Management Review 2011 PDF Download
L’effectuation, une approche pragmatique et pragmatiste de l’entrepreneuriat Saras Sarasvathy
Olivier Germain
Le mythe de l’entrepreneur rationnel et divinateur, figure héroïque et solitaire, porteur de la grande idée qu’il planifie puis exécute avec succès, a vécu même s’il tend à persister, d’une part, en filigrane d’approches pédagogiques désemparées et, d’autre part, comme idéologie du développement économique à tout prix. Les mythes survivent parfois par confort, faute de recours. La théorie de l’effectuation, proposée par Saras S. Sarasvathy depuis une dizaine d’années, constitue un de ces recours. Elle prend pour prémisse un avenir non prédictible et envisage l’entrepreneuriat comme exercice de transformation des moyens dans l’élaboration des fins. Il s’agit donc de rechercher les « effets » possibles de moyens donnés. Les objectifs de l’entrepreneur émergent au fur et à mesure de l’avancée du projet entrepreneurial en fonction de l’aspiration et des connaissances du fondateur, des rencontres et réseaux mobilisés et de diverses contingences. Dans l’entretien qui suit, Saras Sarasvathy revient sur l’élaboration de cette théorie et ses lignes de force. Elle en trace les filiations avec le pragmatisme et la pensée d’Herbert Simon. Elle s’interroge avec nous sur l’applicabilité de l’effectuation à tout type d’entrepreneur mais aussi sur des extensions parfois inappropriées de cette théorie. Enfin, à l’examen de ses critiques, Saras Sarasvathy suggère quelques pistes d’amélioration d’un « entrepreneuriat effectual ». Revue de l’Entrepreneuriat 2011 Not Available
Knowledge Combination and the Potential Advantages of Family Firms in Searching for Opportunities Pankaj C. Patel
J O Fiet
This study examines differences in knowledge structures and combinative capabilities that provide family firms with distinct advantages over nonfamily firms in identifying opportunities. Drawing on constrained, systematic search, we explore how noneconomic goals and family relations enhance searching for opportunities. Unique human capital conditions create specific knowledge and economies of scope in knowledge combination. Differences in knowledge stocks, knowledge combination, and the long-term orientation of family firm managers explain differences in finding opportunities between family and nonfamily firms. Furthermore, we propose that family firms are more likely to improve their search routines over time. Fewer endgame scenarios in family firms allow the refinement of search routines. Entrepreneurship Theory and Practice 2011 PDF Download
Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs Rosenbusch, Nina
Jan Brinckmann
Bausch, Andreas
The performance implications of innovation in small and medium-sized enterprises (SMEs) have attracted considerable interest among academics and practitioners. However, empirical research on the innovation-performance relationship in SMEs shows controversial results. This meta-analysis synthesizes empirical findings in order to obtain evidence whether and especially under which circumstances smaller, resource-scarce firms benefit from innovation. We find that innovation-performance relationship is context dependent. Factors such as the age of the firm, the type of innovation, and the cultural context affect the impact of innovation on firm performance to a large extent. Journal of Business Venturing 2011 (link)
Introduction from the new coeditors Jay Barney
MIKE WRIGHT
  Strategic Entrepreneurship Journal 2011 PDF Download
International entrepreneurship, born globals and the theory of effectuation Svante Andersson Purpose – The purpose of this study is to enhance the understanding of a born global firm’s early internationalization process and the entrepreneur’s decisions regarding internationalization by using effectuation theory.Design/methodology/approach – An explorative case study is used to explore whether effectuation theory is a fruitful alternative perspective compared with the dominant paradigm (causation), which is primarily used in earlier studies on born globals.Findings – The study shows how a born global company could enter many markets in a short time, by co‐operating with local network partners. The founders’ prior knowledge and networks were important to understand the rapid international expansion. Effectuation theory focuses on the entrepreneurs’ ability to create opportunities together with network partners and is a useful tool to understand the development in the born global firm.Research limitations/implications – The study shows that effectuation theory holds promise for developing the international entrepreneurship area. Future research is recommended to focus not only on the entrepreneur’s competencies, but also on the entrepreneur’s behavior, including during the time before they started the firm.Practical implications – Decision‐makers in the early development of born global firms are recommended to use his/her own and his/her company’s resources and network. Also advantage should be taken of opportunities when they are recognized or created, instead of focusing on traditional planning activities.Originality/value – There are few studies that have used effectuation theory as a basis for understanding the early development of a born global firm. Journal of Small Business and Enterprise Development 2011 PDF Download
International Entrepreneurship research (1989–2009): A domain ontology and thematic analysis Marian Jones
Nicole Coviello
Yee Kwan Tang
This article explores the domain of international entrepreneurship (IE) research by thematically mapping and assessing the intellectual territory of the field. Extant reviews show that the body of IE knowledge is growing, and while notable contributions towards theoretical and methodological integration are evident, the field is described as phenomenally based, potentially fragmented and suffering from theoretical paucity. Premising that IE is positioned at the nexus of internationalization and entrepreneurship where entrepreneurial behavior involves cross-border business activity, or is compared across countries, we identify 323 relevant journal articles published in the period 1989–2009. We inventory the domain of IE to provide a relevant and comprehensive organization of its research. This involves examining the subject matter of IE research, and inductively synthesizing and categorizing it into major themes and sub-themes. In so doing, we offer a reliable, ontologically constructed and practically useful resource. From this base, we discuss the phenomena, issues, inconsistencies and interim debates on which new theory in IE may be built and research may be conducted. We conclude that IE has several coherent thematic areas and is rich in potential for future research and theory development. Journal of Business Venturing 2011 PDF Download
Innovation in Large Corporations: A Development of the Rudimentary Theory of Effectuation. Erik Svensrud
Havard Asvoll
Motivated by the rudimentary theory of effectuation, this theoretical study was conducted in order to develop the theory to encompass effectual innovation in large corporations, and to include the aspect of tacit knowledge and time. We present a theoretical socio dynamic model focusing on the relationship between the use of effectual strategies and the evolution of the value of opportunities over time. We suggest that effectuation processes are valuable for innovation in large corporations, especially in the early stages of the opportunity growth, and that tacit knowledge and time can be important aspects of the effectuation strategies. In Academy of Entrepreneurship 2011 Download PDF
Industry changes in technology and complementary assets and the creation of high-growth firms JONATHAN T ECKHARDT
Scott Shane
This study uses employment data to examine why some industries host more new high-growth firms than others. Using a unique data base of 201 industries over a 15-year period, we find that increases in the proportion of employment of scientists and engineers in industries are positively associated with counts of fast-growing new firms; however, we do not detect a relationship between fluctuations in the proportion of employment in sales and production occupations and counts of fast-growing new firms. The findings suggest that technological innovation is an important determinant of entrepreneurial opportunity. Further, they suggest that private new firms are an important means of organizing commercial innovation and that new firms may be less constrained by complementary assets than has been previously understood. Journal of Business Venturing 2011 PDF Download
Improvised internationalization in new ventures: The role of prior knowledge and networks Natasha Evers
Colm Ogorman
How do entrepreneurs identify foreign market opportunities and how do they identify foreign market(s) and customers? We draw on the concepts of effectuation, improvisation, prior knowledge and networks to study the early internationalization of new ventures operating in the Irish Shellfish sector. We argue that the internationalization process was strongly influenced by two ?resources to hand?: the entrepreneurs? idiosyncratic prior knowledge and their prior social and business ties. We observe an effectuation logic and extensive improvisation in the internationalization process of these new ventures. Entrepreneurship & Regional Development 2011 PDF Download
Implications of intra-family and external ownership transfer of family firms: short-term and long-term performance differences Karl Wennberg
Johan Wiklund
Karin Hellerstedt
MATTIAS NORDQVIST
We contrast the performance consequences of intra-family versus external ownership transfers. Investigating a sample of all private family firms in Sweden that went through ownership transfers during 10 years, we find that firms transferred to external owners outperform those transferred within the family, but that survival is higher among intra-family transfers. We attribute these performance differences to the long-term orientation of family firms passed on to the next generation and to the entrepreneurial willingness of acquirers to bear uncertainty. Based on distinct ownership transition routes and theoretical mechanisms explaining performance differences, we outline implications for family business and entrepreneurship research. Copyright © 2011 Strategic Management Society. Strategic Entrepreneurship Journal 2011 PDF Download
I Like How You Think’: Similarity as an Interaction Bias in the Investor–Entrepreneur Dyad Murnieks, Charles Y.
Haynie J.M
Rob Wiltbank
Troy Harting
Investigating the factors that influence venture capital decision-making has a long tradition in the management and entrepreneurship literatures. However, few studies have considered the factors that might bias an investment decision in a way that is idiosyncratic to a given investor–entrepreneur dyad. We do so in this study. Specifically, we build from the literature on the ‘similarity effect’ to investigate the extent to which decision-making process similarity (shared between the investor and the entrepreneur) might bias or otherwise impact the investor’s evaluation of a new venture investment opportunity. Our findings suggest venture capitalists evaluate more favourably opportunities represented by entrepreneurs who ‘think’ in ways similar to their own. Moreover, in the presence of decision-making process similarity, the impacts of other factors that inform the investment decision actually change in counter-intuitive ways. Journal of Management Studies 2011  
How great entrepreneurs think L Buchanan   Inc. Magazine 2011  
HOW DO EXECUTIVES’ EXPERIENCES INFLUENCE STRATEGY AND PERFORMANCE? AN EMPIRICAL ANALYSIS OF ENTREPRENEURIAL TEAMS IN RESEARCH-BASED SPIN-OFF COMPANIES (SUMMARY) Rigo Tietz Entrepreneurial teams in research-based spin-off companies face specific constraints for establishing sustainable ventures. They often lack managerial and entrepreneurial skills, because the scientists themselves are typically the founders and managers. For this reason, the compositions of the entrepreneurial teams are likely to change over time and involve experienced external entrepreneurs and managers (Franklin et al., 2001; Vanaelst et al., 2006). This study analyzes the characteristics and compositions of executive teams in research-based spin-offs. Drawing on an upper echelons framework (Hambrick and Mason, 1984) executives´ prior professional experiences are expected to have an essential impact on organizational outcomes such as strategy and performance. According to effectuation and causation theory (Sarasvathy, 2001) experienced entrepreneurs are more likely to rely on intuitive reasoning, whereas entrepreneurs without prior experiences presumably tend to plan more systematically and analytically. Frontiers of Entrepreneurship Research 2011 PDF Download
Grappling With the Unbearable Elusiveness of Entrepreneurial Opportunities. Dimo Dimov The notion of opportunity, as currently discussed in entrepreneurship research, is theoretically exciting but empirically elusive. This article seeks to stimulate a new conversation about entrepreneurial opportunities by distinguishing two conceptions of entrepreneurial behavior—formal and substantive—and situating the construct of opportunity within the latter. It discusses three substantive premises for studying opportunities empirically: (1) opportunity as happening; (2) opportunity as expressed in actions; and (3) opportunity as instituted in market structures. These premises stimulate research questions that can invigorate and expand the study of entrepreneurial opportunities. They invite a continuous dialogue between qualitative and quantitative methodologies in behalf of understanding how opportunities emerge and evolve at the level of individual entrepreneurs. Entrepreneurship Theory and Practice 2011 PDF Download
Explaining growth paths of young technology-based firms: structuring resource portfolios in different competitive environments BART CLARYSSE
JOHAN BRUNEEL
MIKE WRIGHT
We explore how environmental contingencies determine the way resources are accumulated in young technology-based firms and argue that growth paths are critically shaped at the nexus between resource management and the competitive environment, defined along its most important dimensions, ‘stability’ and ‘complexity.’ We also build propositions about the way environmental conditions affect resource portfolio development or acquisition. We show how particular high-growth paths result from structuring resource portfolios in accordance with environmental demands and provide insights into why, based on six case studies of young technology-based high-growth firms, involving 27 interviews, 121 press releases, 605 press articles, and archival data. Copyright © 2011 Strategic Management Society. Strategic Entrepreneurship Journal 2011 PDF Download
Entrepreneurship’s Next Act Shaker A. Zahra
MIKE WRIGHT
Entrepreneurship has become firmly established as a legitimate scholarly discipline. For entrepreneurship to influence managerial practice and public policy, however, we believe there needs to be a substantive shift in the focus, content, and methods of entrepreneurship research. We discuss ways this shift could occur, highlighting the need to recognize the multiple dimensions of entrepreneurial activities—and the importance of examining the heterogeneous aspects of context and factoring them into future theory building and testing efforts—and delineating the microfoundations of entrepreneurship. We also discuss how to strengthen the link between entrepreneurship research and public policy. The Academy of Management Perspectives 2011 PDF Download
Entrepreneurship as translation: Understanding entrepreneurial opportunities through actor-network theory Steffen Korsgaard Entrepreneurship scholars argue that opportunities are at the heart of entrepreneurial activity. Yet, there is still a heated debate on the nature of opportunities. The discovery view argues that opportunities are discovered and have objective existence prior to the entrepreneurial process. The creation view argues that the discovery view is incomplete and makes wrongful assumptions about agency, process and opportunities in entrepreneurship. More conceptual development, however, is needed for the creation view to become a fully developed theoretical alternative to the discovery view. In this article, Actor-Network Theory is used to develop the creation view and further our understanding of entrepreneurial processes. Entrepreneurship & Regional Development 2011 PDF Download
Entrepreneurship as Method: Open Questions for an Entrepreneurial Future Saras Sarasvathy
S. Venkataraman
In this essay, we outline the provocative argument that in the realm of human affairs there exists an “entrepreneurial method” analogous to the scientific method spelled out by Francis Bacon and others with regard to the natural realm. We then suggest a series of open questions that we believe will help future scholars spell out the contents of such a method and ways in which it can be put to work in the design and achievement of socio-economic ends. At least one normative implication of accepting the argument would be to teach entrepreneurship not only to entrepreneurs but to everyone, as a necessary and useful skill and an important way of reasoning about the world. Entrepreneurship Theory and Practice 2011 PDF Download
Entrepreneurial learning from failure: An interpretative phenomenological analysis Jason Cope This article develops a deeper conceptualisation of the process and content dimensions of learning from venture failure. I propose that recovery and re-emergence from failure is a function of distinctive learning processes that foster a range of higher-level learning outcomes. This qualitative research demonstrates that entrepreneurs learn much not only about themselves and the demise of their ventures but also about the nature of networks and relationships and the “pressure points” of venture management. This article also provides evidence that these powerful learning outcomes are future-oriented, increasing the entrepreneur’s level of entrepreneurial preparedness for further enterprising activities. Journal of Business Venturing 2011  
Entrepreneurial learning from failure: An interpretative phenomenological analysis Jason Cope This article develops a deeper conceptualisation of the process and content dimensions of learning from venture failure. I propose that recovery and re-emergence from failure is a function of distinctive learning processes that foster a range of higher-level learning outcomes. This qualitative research demonstrates that entrepreneurs learn much not only about themselves and the demise of their ventures but also about the nature of networks and relationships and the “pressure points” of venture management. This article also provides evidence that these powerful learning outcomes are future-oriented, increasing the entrepreneur’s level of entrepreneurial preparedness for further enterprising activities. Journal of Business Venturing 2011 PDF Download
ENTREPRENEURIAL DISCOVERY AND EXPLOITATION PROCESSES: SEQUENCE OR SYMBIOSIS? (SUMMARY) Scott R. Gordon Entrepreneurship scholars are showing more interest in process (van de Ven & Engleman, 2004), but, there remains little consensus on conceptualization, operationalisation, analytical approach, or results. Some agree the twin concepts of entrepreneurial discovery and exploitation (Shane & Venkataraman, 2000) are useful sub-processes which, together, explain venture emergence (Davidsson, 2008). This perspective implicitly assumes sequential sub-processes where discovery preceedes exploitation (Eckhardt & Shane, 2010). However, other literature questions the strictness of this ordering (Bhave, 1994; Sarasvathy, 2001); or suggests symbiosis, where discovery and exploitation might overlap (Davidsson, 2008). Despite the inherent importance, there is a dearth of research accounting for temporal structure in new venture emergence. Resultantly, this order hypothesis remains largely untested. Accordingly this paper makes two contributions: first, it tests the temporality of discovery and exploitation; second, it introduces a new method for such process analysis. Frontiers of Entrepreneurship Research 2011 PDF Download
Effects of initial teamwork capability and initial relational capability on the development of new technology-based firms Jan Brinckmann
MARTIN HOEGL
New technology-based firms face substantial resource constraints. This study examines how teamwork capability and relational capability of the entrepreneurial team affects the development of new firms. Teamwork capabilities are captured by the quality of collaboration of the entrepreneurial team members among themselves. Relational capabilities are analyzed based on the collaboration of the entrepreneurial team members with partners external to the focal firm. Our findings show that teamwork and relational capabilities, while theoretically originating from social capabilities, can have diverging effects on the development of a new organization. We find that relational capabilities lead to founding team member additions as well as sales and employment growth. In contrast, teamwork capabilities lead to a reduced likelihood to add founding team members and do not affect sales and employment growth. Theoretical and practical implications are discussed. Copyright © 2011 Strategic Management Society. Strategic Entrepreneurship Journal 2011 PDF Download
Delineating the Domain of Development Entrepreneurship: A Market-Based Approach to Facilitating Inclusive Economic Growth. Jeffery McMullen Development economists and management scholars have called for a more market-based approach to address the extreme poverty suffered by the billion people residing primarily in least developed countries. This article proposes a theory of development entrepreneurship that blends business entrepreneurship, social entrepreneurship, and institutional entrepreneurship to accelerate the institutional change necessary to make economic growth more inclusive. After examining various explanations of market failure in the base of the pyramid and social entrepreneurship literatures, I explain why entrepreneurial transformation of formal institutions is needed and what differentiates development entrepreneurship from related concepts such as social entrepreneurship, social business entrepreneurship, and socio-political activism. Entrepreneurship Theory and Practice 2011 PDF Download
Contingency as an entrepreneurial resource: How private obsession fulfills public need Susan S Harmeling Borrowing from Rorty (1989:37), this article portrays the entrepreneurial process as a mechanism through which “private obsession” fulfills “public need.” It begins with an argument that a deeper understanding of contingency can enhance management scholarship in general and entrepreneurship in particular. It continues with an examination of contingency and entrepreneurial opportunity and then uses six narratives to show how both personal and historical contingencies become resources in the entrepreneurial process. A depiction of possible alternative responses (counterfactuals) for each narrative illustrates how entrepreneurs tend to take a resourceful, rather than an adaptive or a heroic stance toward contingency. A discussion of American Pragmatism provides theoretical support for contingency’s role in the entrepreneurial process. The paper concludes with a literature review and a look at how this view of entrepreneurial contingency illuminates the temporal context in management scholarship, among other implications for both research and practice. Journal of Business Venturing 2011 PDF Download
Commentary: Exploiting and Exploring New Opportunities Over Life Cycle Stages of Family Firms Sharma, Pramodita
Salvato, Carlo
Family firms vary with regards to success achieved in terms of opportunity creation and exploitation over time. Elaborating on this variation, this commentary argues that firms that simultaneously engage in multiple levels of innovation—incremental, progressive, and radical—are likely to enjoy sustainable performance advantages across generations. Toward this end, a strategic split of innovation responsibilities between family and nonfamily professionals is likely to be useful, contingent on the firm’s life cycle and size. In terms of entrepreneurial expertise, a combination of causal and effectual thinking is necessary to ensure exploitation of already discovered or created opportunities and exploration of new ones. Entrepreneurship Theory and Practice 2011 PDF Download
Causation and effectuation processes: A validation study. Gaylen Chandler
Dawn DeTienne
Alexander McKelvie
Troy Mumford
We develop and validate measures of causation and effectuation approaches to new venture creation and test our measures with two samples of entrepreneurs in young firms. Our measure of causation is a well-defined and coherent uni-dimensional construct. We propose that effectuation is a formative, multidimensional construct with three associated sub-dimensions (experimentation, affordable loss, and flexibility) and one dimension shared with the causation construct (pre-commitments). As specified by Sarasvathy (2001), we also show that causation is negatively associated with uncertainty, while experimentation, a sub-dimension of effectuation, is positively correlated with uncertainty. The major contribution is the resulting validated scales that measure causation and effectuation. Journal of Business Venturing 2011 PDF Download
Causal and Effectual Network Strategies and New Venture Performance: a Study of German Entrepreneurs (Summary) Joris Heuven
Semrau Thorsen
Jeroen Kraaijenbrink
Stefan Sigmund
  Frontiers of Entrepreneurship Research 2011 PDF Download
BUSINESS PLANNING, IDEA CHANGE, FLEXIBILITY AND PERFORMANCE: THE BEST OF BOTH WORLDS? (INTERACTIVE PAPER) Christophe Garonne
Per Davidsson
The relationships between business planning and performance have divided the entrepreneurship research community for decades (Brinckmann et al, 2010). One side of this debate is the assumption that business plans may lock the firm in a specific direction early on, impede the firm to adapt to the changing market conditions (Dencker et al., 2009) and eventually, cause escalation of commitments by introducing rigidity (Vesper, 1993). Conversely, feedback received from the production and presentation of business plans may also lead the firm to take corrective actions. However, the mechanisms underlying the relationships between changes in business ideas, business plans and the performance of nascent firms are still largely unknown. While too many business idea changes may confuse stakeholders, exhaust the firm’s resources and hinder the undergoing legitimization process, some flexibility during the early stages of the venture may be beneficial to cope with the uncertainties surrounding new venture creation (Knight, 1921; March, 1982; Stinchcombe, 1965; Weick, 1979). Previous research has emphasized adaptability and flexibility as key success factors through effectual logic and interaction with the market (Sarasvathy, 2001; 2007) or improvisation and trial-and-error (Miner et al, 2001). However, those studies did not specifically investigate the role of business planning. Our objective is to reconcile those seemingly opposing views (flexibility versus rigidity) by undertaking a more fine-grained analysis at the relationships between business planning and changes in business ideas on a large longitudinal sample of nascent firms. Frontiers of Entrepreneurship Research 2011 PDF Download
Attributions to intuition in the venture founding process: Do entrepreneurs actually use intuition or just say that they do? Brian Blume
Jeffrey Covin
Even though entrepreneurs often cite the use of intuition as a basis for their venturing decisions, verifying that entrepreneurs are actually using intuition is very difficult. We distinguish between entrepreneurs’ attributions to intuition and their actual use of intuition. We propose characteristics of entrepreneurs that increase the likelihood that they will attribute intuition as a basis for decisions during the venture founding process. We then delineate characteristics that make the development and effective use of entrepreneurial intuition more likely. Theoretical implications for researchers studying intuition and practical implications for entrepreneurs using intuition are discussed. Journal of Business Venturing 2011 PDF Download
Academy of Management Journal Ad Hoc Reviewers of 2010 effectuation   Academy of Management Journal 2011  
A CONTINGENCY MODEL OF ENTREPRENEURIAL ENTRY STRATEGIES: THE ROLE OF MOTIVATION AND RESOURCES AVAILABILITY (INTERACTIVE PAPER) Nadav Rotemberg-Shir
Karl Wennberg
While current theory has tended to focus on either motivational factors or creative strategies of resource utilization, these two streams of research have developed separately. As a result, the literature has little to say under what conditions differences in motivation and resources will lead to divergent types of entry strategies. In this project we outline and test a contingency model suggesting that the interaction of motivation and resource availability is intimately tied to entrepreneurs’ type of entry strategies. When motivation is relatively low but resource availability is high, our model predicts that entrepreneurs will use a real-option entry strategy. When motivation is high but resource availability is low the entrepreneurs will compensate by employing creative solutions, suggesting that entrepreneurs will utilize more of bricolage resource utilization. When both motivation and resource availability is high, our model suggests that the resulted higher self-confidence, allow for a more flexible and experimental strategy coherent with effectuation (Sarasvathy, 2001). Frontiers of Entrepreneurship Research 2011 PDF Download
A 2 × 2 Conceptual Foundation for Entrepreneurial Discovery Theory Patrick J. Murphy Theories about entrepreneurial discovery are important to entrepreneurship. However, the dominant conceptual foundation underlying such theories hinders their development. It assumes that opportunities form based on either deliberate search or serendipitous discovery. I examine this unidimensional logic and identify a gap in its informative content. Then, I reframe it into orthogonal dimensions. The multidimensional model not only describes the same cases as the unidimensional model but also describes what the unidimensional model cannot, including cases that are high or low on both dimensions. This extension yields a 2 × 2 conceptual foundation for entrepreneurial discovery theory that promotes the development and coordination of distinct theoretic streams. Entrepreneurship Theory and Practice 2011  
A 2 × 2 Conceptual Foundation for Entrepreneurial Discovery Theory Patrick J. Murphy Theories about entrepreneurial discovery are important to entrepreneurship. However, the dominant conceptual foundation underlying such theories hinders their development. It assumes that opportunities form based on either deliberate search or serendipitous discovery. I examine this unidimensional logic and identify a gap in its informative content. Then, I reframe it into orthogonal dimensions. The multidimensional model not only describes the same cases as the unidimensional model but also describes what the unidimensional model cannot, including cases that are high or low on both dimensions. This extension yields a 2 × 2 conceptual foundation for entrepreneurial discovery theory that promotes the development and coordination of distinct theoretic streams. Entrepreneurship Theory and Practice 2011 PDF Download
“ENTREPRENEUR MAKES GOOD”: SOCIAL ENTREPRENEURSHIP AND OPPORTUNITY CREATION (SUMMARY) Michael Conger
Jeffery York
The study of social implications of entrepreneurship, and the influence of socio-cultural factors on entrepreneurial action, is still in its infancy. Although there is a growing interest in “social entrepreneurship” there is a critical need for empirical studies, and for more established entrepreneurship theories and streams of research, to be applied to the context of socially beneficial entrepreneurship (Short et al., 2009). Opportunity recognition and creation has been identified as a defining topic for entrepreneurship research (Shane & Venkataraman, 2000). Key theoretical questions have been raised regarding this topic including how entrepreneurial motivation affects opportunity recognition (Shane et al, 2003) and whether entrepreneurial opportunities are discovered or created (Sarasvathy, 2002; Alvarez & Barney, 2007). Several entrepreneurship scholars have theorized about why and how social entrepreneurship opportunities come to be but empirical study has not yet been brought to bear on these topics. In this study, we seek to bridge the theoretical predictions of the opportunity literature with the context of entrepreneurial action focused on creating social, as well as economic, benefits. We draw on identity theory (Stryker, 1980) to empirically examine how the entrepreneur’s self-concept affects her propensity to discover and/or create opportunities for socially beneficial entrepreneurship. Frontiers of Entrepreneurship Research 2011 PDF Download
‘I Like How You Think’: Similarity as an Interaction Bias in the Investor–Entrepreneur Dyad Murnieks, Charles Y.
Michael Haynie
Rob Wiltbank
Troy Harting
Investigating the factors that influence venture capital decision-making has a long tradition in the management and entrepreneurship literatures. However, few studies have considered the factors that might bias an investment decision in a way that is idiosyncratic to a given investor–entrepreneur dyad. We do so in this study. Specifically, we build from the literature on the ‘similarity effect’ to investigate the extent to which decision-making process similarity (shared between the investor and the entrepreneur) might bias or otherwise impact the investor’s evaluation of a new venture investment opportunity. Our findings suggest venture capitalists evaluate more favourably opportunities represented by entrepreneurs who ‘think’ in ways similar to their own. Moreover, in the presence of decision-making process similarity, the impacts of other factors that inform the investment decision actually change in counter-intuitive ways. Journal of Management Studies 2011 PDF Download
What Effectuation is Not: Further Development of an Alternative to Rational Choice Saras Sarasvathy
Rob Wiltbank
The theory of effectual reasoning advanced by Sarasvathy (2001a) proposes a decision process employed by entrepreneurs that differs substantially from the rational choice paradigm. This paper seeks to clarify this distinctive point of view on entrepreneurial decision-making by pointing to nine things that effectuation is not. The paper further explains the effectual paradigm and illustrates how effectuation integrates with other theories used in management science. Academy of Management Conference 2010 PDF Download
Three Views of Entrepreneurial Opportunity Saras Sarasvathy
Nick Dew
Rama Velamuri
S. Venkataraman
Every invention engenders opportunities for the creation of several possible economic (as well as other types of socially significant) effects. In the foregoing sections we have examined three sets of views with regard to how these effects come to be. Approaches based on the view of the market as an allocative process focus entirely on the final effects of opportunity creation, treating the processes leading to these final effects as mere detail; approaches based on the view of the market as a discovery process emphasize only the origins of the opportunity for creation, treating the final effects as inevitable products of competitive markets; and finally, approaches based on the view of the market as a creative process emphasize the decisions and actions of the agents, making both origins and final effects contingent upon those decisions and actions. In our view, if we are to deepen our understanding of entrepreneurial opportunity, we need to integrate these three approaches, emphasize contingencies rather than inevitabilities in each. As a first step in that direction, we offer the following fundamental argument for the study of the central phenomena of entrepreneurship – viz., entrepreneurial opportunities.   2010 PDF Download
The role of business model innovation in the emergence of markets: a missing dimension of entrepreneurial strategy? Helder Sebastiao
Samuel S Holloway
Current theorizing assumes business models are developed to match firm resources and capabilities to existing market conditions. Consequently, entrepreneurs who successfully introduce new business models that significantly alter existing market preferences and structures are viewed as an anomaly; their success attributed to the strategic failure of incumbents. In contrast, we attribute success to both a co- evolution of individual and collective interests and the entrepreneur’s concerted efforts to align those interests with their strategic vision of a new business model and market. This process combines the experimental and iterative nature of effectuation with a strategic orientation that is fundamentally market driving.   2010  
The production of entrepreneurial opportunity: a constructivist perspective Matthew S Wood
William McKinley
This article presents a conceptual model of entrepreneurial opportunity production from a constructivist perspective. The model assumes that opportunity production proceeds through several stages, including conceptualization of an opportunity idea by an entrepreneur, objectification of that idea, and enactment of the opportunity into a new venture. However, not all opportunity ideas survive this full process. Between the conceptualization stage and the objectification stage, some ideas are abandoned due to inadequate objectification. Also, between the objectification stage and the enactment stage, some objectified opportunities are abandoned due to insufficient resource support. We identify variables that influence the likelihood that opportunity ideas will be objectified and other variables that influence the likelihood that objectified opportunities will be enacted, and these variables are incorporated into empirically testable propositions. In the discussion section, we describe several boundary conditions for our theory, contrast the theory with objectivist (discovery) theory, and derive implications for future research. Copyright © 2010 Strategic Management Society. Strategic Entrepreneurship Journal 2010 PDF Download
The Power and Effects of Entrepreneurship Research Brian L Connelly
R.D. Ireland
Christopher R Reutzel
Joseph E Coombs
This study summarizes and analyzes average statistical power and effect sizes in empirical entrepreneurship research. Results show that statistical power was higher than expected, and was particularly high in studies employing archival measures. Statistical power has also increased over time. Effect sizes were higher than expected, a finding that remained consistent for different levels of analysis and across multiple subdomains. We discuss these findings, compare them to related disciplines, and draw implications for the design of future studies. Entrepreneurship Theory and Practice 2010 PDF Download
The Multiple Effects of Business Planning on New Venture Performance Andrew Burkemper
Stuart Fraser
FRANCIS J. GREENE
We investigate the multiple effects of writing a business plan prior to start-up on new venture performance. We argue that the impact of business plans depends on the purpose for and circumstances in which they are being used. We offer an empirical methodology which can account for these multiple effects while disentangling real impact effects from selection effects. We apply this to English data where we find that business plans promote employment growth. This is found to be due to the impact of the plan and not selection effects. Journal of Management Studies 2010 PDF Download
The Legitimacy of Social Entrepreneurship: Reflexive Isomorphism in a Pre-Paradigmatic Field. Alex Nicholls Following Kuhn, this article conceptualizes social entrepreneurship as a field of action in a pre-paradigmatic state that currently lacks an established epistemology. Using approaches from neo-institutional theory, this research focuses on the microstructures of legitimation that characterize the development of social entrepreneurship in terms of its key actors, discourses, and emerging narrative logics. This analysis suggests that the dominant discourses of social entrepreneurship represent legitimating material for resource-rich actors in a process of reflexive isomorphism. Returning to Kuhn, the article concludes by delineating a critical role for scholarly research on social entrepreneurship in terms of resolving conflicting discourses within its future paradigmatic development. Entrepreneurship Theory and Practice 2010  
The influence of sustainability orientation on entrepreneurial intentions – Investigating the role of business experience. Andreas Kuckertz
Marcus Wong
Do individuals who are concerned by issues of sustainability also exhibit stronger entrepreneurial intentions? Given that existing imperfections in the market create numerous opportunities for entrepreneurship connected with sustainable development, adding individual sustainability orientation to models of entrepreneurial intention could increase their explanatory power. Based on survey data collected from engineering and business students and alumni of three universities, we provide evidence that entering sustainability orientation into the equation is actually meaningful. However, our findings suggest that the positive impact of sustainability orientation vanishes with business experience. Consequently, we suggest measures to nourish an evidently existing potential for sustainable entrepreneurship. Journal of Business Venturing 2010 PDF Download
The Impact of Environment and Entrepreneurial Perceptions on Venture-Creation Efforts: Bridging the Discovery and Creation Views of Entrepreneurship LINDA F EDELMAN
Yli-Renko, Helena
Recent literature has highlighted two conflicting theories of entrepreneurship. In the “discovery” perspective, objective environmental conditions are considered to be the source of entrepreneurial opportunities and thus drivers of subsequent entrepreneurial action. The “creation” view, in contrast, is based on entrepreneurial perceptions and socio-cognitive enactment processes. While empirical studies have separately utilized each of these perspectives, few attempts have been made to integrate insights from both theories to empirically examine the interrelationships among environmental conditions, entrepreneurial perceptions, entrepreneurial action, and outcomes. In this article, we explicate the roles that both objective environmental conditions and entrepreneurial perceptions of opportunity and resource availability play in the process of firm creation. Utilizing longitudinal data on nascent entrepreneurs, we find that as hypothesized, entrepreneurs’ opportunity perceptions mediate between objective characteristics of the environment and the entrepreneurs’ efforts to start a new venture. Contrary to our expectations, we do not find a similar mediating effect for perceived resource availability. These findings have important implications for further theory development in entrepreneurship as well as for practice and education in the field. Entrepreneurship Theory and Practice 2010 PDF Download
THE ESSENCE OF ENTREPRENEURIAL LEARNING (SUMMARY) Magdalena Markowska Learning is often assumed to be inherent in the entrepreneurship process (Corbett, 2005). Researchers agree that the entrepreneurial learning is experiential in nature (Cope, 2005; Politis, 2005). It has been shown that with experience entrepreneurs are more likely to act effectually and/or adapt their dominant logic to the nature of the task (Dew at al., 2009; Gustavsson, 2004). Acting effectually is thus what makes entrepreneurs entrepreneurial (Sarasvathy, 2001). Therefore, the entrepreneurial learning can be conceptualized as a process of development of effectual logic. To put it simply, effectuation is the outcome of the learning process. In this process, perceived control motivates individuals to engage in action (Bandura, 2001). The choice of the behavior relies on and is congruent with entrepreneurs’ salient identity. In particular, it has been argued that individuals show prevalence for either professional or managerial identity. However, how these orientations influence the self-regulatory processes and the prevailing decision making logic in the entrepreneurship process has not been researched so far. Thus, the purpose of the paper is to develop a conceptual framework illustrating the factors determining the process of development of effectual logic. Frontiers of Entrepreneurship Research 2010 PDF Download
The entrepreneur–environment nexus: Uncertainty, innovation, and allocation Jeffery York
S. Venkataraman
We build upon a recent stream of research that has proposed entrepreneurship as a solution to, rather than a cause of, environmental degradation. Our proposition is that under certain conditions entrepreneurs are likely to supplement, or surpass, the efforts of governments, NGOs and existing firms to achieve environmental sustainability. Entrepreneurs can contribute to solving environmental problems through helping extant institutions in achieving their goals and by creating new, more environmentally sustainable products, services and institutions. Our model illustrates how entrepreneurs 1) address environmental uncertainty, 2) provide innovation and 3) engage in resource allocation to address environmental degradation. Journal of Business Venturing 2010 PDF Download
The Coevolution of Institutional Entrepreneurship: A Tale of Two Theories Saras Sarasvathy
Desirée F. Pacheco
Jeffery York
Thomas J. Dean
This article provides a review and analysis of institutional entrepreneurship research with a focus on the emergence of this literature within two largely divergent streams: sociology-based institutional theory and economics-based institutional economics. The authors completed a review of 141 articles from these concurrent, but unlinked, research streams to understand how their integration might contribute to the further understanding of institutional entrepreneurship. Each stream is reviewed on its respective approaches to the following topics: the nature of the institutional entrepreneur, the types of institutions addressed, the determinants of institutional entrepreneurship, the mechanisms used in the process, and the empirical focus of each stream. The article recommends greater assimilation of the two streams and discusses specific opportunities for conceptual integration. Finally, the article offers an agenda for incorporating entrepreneurship research into the study of institutional entrepreneurship. Findings from this review suggest that while institutional economics focuses mostly on the antecedents and outcomes of institutional entrepreneurship, the institutional theory perspective is more concerned with the process and mechanisms that drive such change. The authors also suggest that entrepreneurship theory can greatly advance our understanding of institutional entrepreneurship by informing whether and how opportunities for institutional change are recognized, discovered, and created, as well as by providing insights on the antecedents and mechanisms of such activity. Most important, integrating the unique perspectives and domains of institutional theory, institutional economics, and entrepreneurship research in the study of institutional entrepreneurship provides substantial opportunity for expanding our understanding of the concept and its implications. Journal of Management 2010 PDF Download
The co-evolution of institutional entrepreneurship: A tale of two theories. Desirée F. Pacheco
Jeffery York
Thomas J. Dean
Saras Sarasvathy
This article provides a review and analysis of institutional entrepreneurship research with a focus on the emergence of this literature within two largely divergent streams: sociology-based institutional theory and economics-based institutional economics. The authors completed a review of 141 articles from these concurrent, but unlinked, research streams to understand how their integration might contribute to the further understanding of institutional entrepreneurship. Each stream is reviewed on its respective approaches to the following topics: the nature of the institutional entrepreneur, the types of institutions addressed, the determinants of institutional entrepreneurship, the mechanisms used in the process, and the empirical focus of each stream. The article recommends greater assimilation of the two streams and discusses specific opportunities for conceptual integration. Finally, the article offers an agenda for incorporating entrepreneurship research into the study of institutional entrepreneurship. Findings from this review suggest that while institutional economics focuses mostly on the antecedents and outcomes of institutional entrepreneurship, the institutional theory perspective is more concerned with the process and mechanisms that drive such change. The authors also suggest that entrepreneurship theory can greatly advance our understanding of institutional entrepreneurship by informing whether and how opportunities for institutional change are recognized, discovered, and created, as well as by providing insights on the antecedents and mechanisms of such activity. Most important, integrating the unique perspectives and domains of institutional theory, institutional economics, and entrepreneurship research in the study of institutional entrepreneurship provides substantial opportunity for expanding our understanding of the concept and its implications. Journal of Management 2010  
The age-effect of financial indicators as buffers against the liability of newness Johan Wiklund
Thomas Baker
Shepherd Dhliwayo
This paper builds on the liabilities of newness literature to suggest that accounting information is important for new firms. Using a sample of over 30,000 companies followed during their first 7†years of existence, we find evidence that financial indicators mitigate the liability of newness and that this buffering effect is stronger the younger the organization. These results represent three primary contributions to the literature. First, our conceptualization of accounting measures as indicators of external (creditworthiness enhancing legitimacy) as well as internal (targets for management) buffers to the liabilities of newness provides a novel way of viewing these constructs and explains why they are important to new firms despite their uncertainty and opacity. Second, we theoretically justify and empirically validate that these constructs are more important the younger the new firm is, which runs counter to the common wisdom of these constructs in the entrepreneurship literature. Third, we identify buffers against failure for new firms that are generalizable across industries. Journal of Business Venturing 2010 PDF Download
Sustainable development and entrepreneurship: Past contributions and future directions. Jeremy Hall
Gregory Daneke
Michael Lenox
This article discusses the emerging research concerned with sustainable development and entrepreneurship, which is the focus of this special issue of the Journal of Business Venturing. Entrepreneurship has been recognized as a major conduit for sustainable products and processes, and new ventures are being held up as a panacea for many social and environmental concerns. However, there remains considerable uncertainty regarding the nature of entrepreneurship’s role and how it may unfold. We begin with an overview of sustainable development and the role of entrepreneurship and outline recent contributions exploring this role. We then summarize the papers presented in this special issue and conclude with suggestions for further research. Journal of Business Venturing 2010 PDF Download
Sustainability-driven entrepreneurship: Principles of organization design Bradley D. Parrish Concern about whether the social–ecological processes that provide for human wellbeing can be sustained has given rise to sustainable development as a broad social goal. As a dynamic force for change, entrepreneurship is increasingly expected to contribute to this goal. This article reports on the results of an intensive empirical study investigating the organization design expertise necessary for sustainability-driven entrepreneurs to succeed in a competitive market context. Results reveal five principles of organization design that diverge in important ways from the conventional principles of entrepreneurship, suggesting the expertise required for venture success differs depending on entrepreneurial values and motives. Sustainable Development and Entrepreneurship 2010 PDF Download
Social Bricolage: Theorizing Social Value Creation in Social Enterprises Di Domenico MariaLaura
Helen Haugh
Tracey, Paul
Current theorizations of bricolage in entrepreneurship studies require refinement and development to be used as a theoretical framework for social entrepreneurship. Our analysis traces bricolage’s conceptual underpinnings from various disciplines, identifying its key constructs as making do, a refusal to be constrained by limitations, and improvisation. Although these characteristics appear to epitomize the process of creating social enterprises, our research identifies three further constructs associated with social entrepreneurship: social value creation, stakeholder participation, and persuasion. Using data from a qualitative study of eight U.K. social enterprises, we apply the bricolage concept to social entrepreneurial action and propose an extended theoretical framework of social bricolage. Academy of Management Conference Entrepreneurship Theory and Practice 2010 PDF Download
Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning-performance relationship in small firms Jan Brinckmann
Dietmar Grichnik
Diana Kapsa
Entrepreneurship research engages in an intense debate about the value of business planning. Prior empirical findings have been fragmented and contradictory. This study contributes insights to the business planning discussion by following an evidence-based research approach. We conduct a meta-analysis on the business planning–performance relationship and specifically focus on contextual factors moderating the relationship. Results indicate that planning is beneficial, yet contextual factors such as newness of the firms and the cultural environment of firms significantly impact the relationship. Based on this evidence, we propose a concomitant and dynamic approach that combines planning and learning. Journal of Business Venturing 2010 PDF Download
Schumpeter’s ‘conduct model of the dynamic entrepreneur’: scope and distinctiveness Anthony Endres
Christine Woods
Schumpeter formulated a ‘conduct model’ of entrepreneurial behaviour. Received wisdom has emphasised the economic functions of Schumpeter’s entrepreneur, neglecting behavioural aspects. Schumpeter’s model is examined; it posits a continuum of behaviours which are ‘entrepreneurial’, that rely on socially situated, tacit knowledge and are expressions of conscious, subjective rationality. Schumpeter’s model excluded unconscious optimisation and decision rules derived from bounded rationality. Comparisons are drawn with modern neoclassical, Austrian, and the older behavioural characterisations of entrepreneurial behaviour. The newer ‘effectuation’ model of entrepreneurial behaviour is also contrasted with Schumpeter’s approach. We find, among other things, that modern Schumpeterian economics associated with Nelson and Winter is not a natural continuation of Schumpeter’s model. However, some developments in neo-Schumpeterian economics, including the effectuation model deriving from the older behavioural tradition, are congruent with both the original ‘conduct model’ and Schumpeter’s directions for further research. Journal of Evolutionary Economics 2010  
SARASVATHIAN EFFECTUATION AND WEICKIAN ENACTMENT IN THE ENTREPRENEURIAL OPPORTUNITY PROCESS (SUMMARY) Sanjay Bhowmick In the face of uncertainty entrepreneurs effectuate opportunities (Sarasvathy, 2001, 2008). The entrepreneurship literature also suggests that entrepreneurial opportunities are ‘enacted’ (Carter et al., 1996; Gartner et al., 2003), drawing ostensibly from the sensemaking literature of Weick (1979; 1995; 2005 with Sutcliffe & Obstfeld). Are the two concepts related? This theoretical paper explores the similarities, complementarities and differences between Sarasvathian effectuation and Weickian enactment with respect to entrepreneurial opportunity formation, bringing clarity and aiming at concept parsimony in entrepreneurship research. Frontiers of Entrepreneurship Research 2010 PDF Download
RE-STORYING AN ENTREPRENEURIAL IDENTITY: EDUCATION, EXPERIENCE AND SELF-NARRATIVE (SUMMARY) Susan S Harmeling In this paper, I consider the potential impact of entrepreneurship education on identity. Over the past twenty years, there has been fervent interest in the prevalence, content, and outcomes of entrepreneurship education programs, but very little attention on the effect of entrepreneurship education on participants’ identities. However, the impact of entrepreneurship education on identity would seem to be a fruitful line of research because, as scholars have noted, entrepreneurship education is different in kind from other types of management education, in that it deals with uniquely personal issues such as the emotions of grief and loss from failure (Shepard, 2004, 2003), individual initiatives geared toward channeling resources and stakeholders to the developing organization (Sarasvathy, 2001, 2008), ethics around the “face” that entrepreneurs present to potential investors (Brenkert, 2009) and the ways in which entrepreneurs deal with both exogenous and endogenous contingency (Honig, 2004, Harmeling, 2009). Frontiers of Entrepreneurship Research 2010 PDF Download
Path Dependence or Path Creation? Dr. Raghu Garud
Arun Kumaraswamy
Peter Karnoe
We discuss the assumptions that underlie path dependence, as defined by Vergne and Durand, and then provide the outlines of an alternative perspective which we label as path creation. Path creation entertains a notion of agency that is distributed and emergent through relational processes that constitute phenomena. Viewed from this perspective, ‘initial conditions’ are not given, ‘contingencies’ are emergent contexts for action, ‘self-reinforcing mechanisms’ are strategically manipulated, and ‘lock-in’ is but a temporary stabilization of paths in-the-making. We develop these points using a narrative approach and highlight the theoretical and methodological implications of our perspective. Journal of Management Studies 2010 PDF Download
ON THE USE OF EFFECTUATION VERSUS CAUSATION IN THE NEW VENTURE CREATION PROCESS: THE ROLE OF RESOURCES VERSUS THE ENVIRONMENT (SUMMARY) Miguel Meuleman
Jan Lepoutre
Olivier Tilleuil
Effectuation theory suggests that entrepreneurs focus primarily on the resources under their control, and then develop their new ventures in an iterative way. They do this by selecting different potential goals that can be accomplished with the resources at hand based on a focus on affordability of loss rather than maximal return on the capital invested, and the use of precommitments from self-selected stakeholders (Sarasvathy, 2001, 2008; Sarasvathy et al., 2005, 2006). In contrast to the effectual logic, a causational logic starts from a specific goal and then focuses on selecting the resources needed to achieve those goals. Relatively little empirical research has looked at the conditions under which an entrepreneur will use either a causation or an effectuation logic in the new venture formation process, or whether both logics are used at the same time (Sarasvathy, 2003). In this study, therefore, our main research question is: what factors determine whether entrepreneurs use causational and/or effectuation processes in forming their ventures? As strategies require a “fit” between organizational resources and the environment of the firm (Grant, 2008; Eisenhardt & Martin, 2000), we developed hypotheses that were interested in both the resources available to the entrepreneur and the external environment that influence the adoption of causation and/or effectuation strategies. With respect to the environment, we look at the effect of different sources of uncertainty. When studying the impact of resources, we examine the effect of human capital, social capital and organizational slack. Frontiers of Entrepreneurship Research 2010 PDF Download
Nations of entrepreneurs: A social capital perspective Seok Woo Kwon
Pia Arenius
This research examined the effects of social capital on entrepreneurial opportunity perception and weak tie investment using individual-level data from the Global Entrepreneurship Monitor linked with national-level data on social capital. Consistent with a social capital perspective, this study found that a resident of a country with higher generalized trust and breadth of formal organizational memberships was more likely to perceive entrepreneurial opportunities. A resident of a country with higher generalized trust was also more likely to invest in an entrepreneur with whom he or she had a weak personal tie than was a resident of a country with lesser generalized trust. Journal of Business Venturing 2010 PDF Download
Nascent entrepreneurs and venture emergence: Opportunity confidence, human capital, and early planning Dimo Dimov Nascent entrepreneurs continuously evaluate the merits of the opportunities they pursue and so can abandon those that lack promise and persist with those that remain attractive. This paper articulates this evolving judgment about the opportunity as the nascent entrepreneur’s opportunity confidence. It situates this construct in the context of the nascent entrepreneur’s human capital and early planning actions in respect to the pursued opportunity, and in respect to the emergence of the nascent venture. Analyses of PSED data show that opportunity confidence positively affects venture emergence and that, through it, entrepreneurial experience and early planning have only indirect effects on venture emergence. In contrast, industry experience has a direct, positive effect on venture emergence. These results provide some novel insights into the nascent entrepreneurial process as well as into the role of human capital and early planning in that process. Journal of Management Studies 2010 PDF Download
Made, as well as found: Researching entrepreneurship as a science of the artificial. Saras Sarasvathy
S. Venkataraman
Nick Dew
  Yale University Press. 2010  
Letter from the editor-in-chief: Dean A. Shepherd Shepherd Dhliwayo   Journal of Business Venturing 2010  
Internationalization as an entrepreneurial process Schweizer, Roger
Vahlne, Jan-Erik
Johanson, Jan
When firms cross-borders it is, by definition, internationalization. We believe that often internationalization should be seen as either a by-product of a firm’s efforts to improve its position within its network or networks, or as the result of an entrepreneurial action. We consider three theoretical approaches as a starting point and breathe life into them with a rich case study. We suggest adjustments to Johanson and Vahlne’s business network internationalization process model, an update of the Uppsala internationalization process model, to emphasize the entrepreneurial aspects of the process. Journal of International Entrepreneurship 2010  
Instructor’s Note Envirofit International: A Venture Adventure Paul Hudnut
Dawn DeTienne
  Entrepreneurship Theory and Practice 2010 PDF Download
Institutional Environment and Entrepreneurial Cognitions: A Comparative Business Systems Perspective Dominic S.K Lim
Eric Morse
Ronald Mitchell
Kristie K Seawright
In this study, we investigate the relationship between institutional elements of the social environment and entrepreneurial cognitions, which lead to the individual’s venture creation decision. Employing a sample of 757 entrepreneurs and non-entrepreneurs from eight countries we examine the extent to which institutions influence venture creation decisions, where entrepreneurial expert scripts act as a mediator. Results show that various institutional elements, such as legal and financial systems, affect venture arrangements and willingness scripts. Venture arrangements scripts, in turn, have the most significant impact on an individual’s venture creation decision. Entrepreneurship Theory and Practice 2010 PDF Download
Imagining and Rationalizing Opportunities: Inductive Reasoning and the Creation and Justification of New Ventures. Joep Cornelissen
john clarke
We argue that creating novel ventures consists of inductive analogical or metaphorical reasoning, which generates a platform for the creation and commercialization of novel ventures and facilitates the comprehension and justification of a venture. We argue that such inductive reasoning is shaped by two determinants (the applicability of prior entrepreneurial experience and the motivation to resolve uncertainty and acquire legitimacy) that interrelate to predict and explain patterns of analogical and metaphorical reasoning by which novice and experienced entrepreneurs construct meaning for themselves as well as others in the early stages of creating a venture. Academy of Management Review 2010 PDF Download
How Opportunities Develop in Social Entrepreneurship Patricia Corner
Marcus Ho
The purpose of this article was to extend existing research on opportunity identification in the social entrepreneurship literature through empirically examining this phenomenon. We used an inductive, theory-building design that surfaced patterns in social value creation across multiple case studies. The patterns showed actors seeing a social need and prospecting ideas that could address it. Data also revealed multiple, not individual, actors, dynamically engaged in interactions that nudged an opportunity into manifestation. Also, data suggested complementarities to effectuation and rational/economic processes that are divergent theoretical approaches to the study of entrepreneurship to date. Entrepreneurship Theory and Practice 2010 PDF Download
How entrepreneurs acquire the capacity to excel: insights from research on expert performance Baron Robert A
REBECCA A HENRY
Most new ventures fail, but a few prosper and attain rapid growth. Many factors contribute to such outcomes, but we propose that among these are mechanisms identified by cognitive science research on the origins of expert performance. Literature on this topic indicates that across many fields (e.g., medicine, science, sports, music), outstanding performance derives largely from participation in intense, prolonged, and highly focused efforts to improve current performance—a process known as deliberate practice. By comparison, mere experience in a field and individual talent play smaller roles in generating expert performance. Additional evidence indicates that participation in deliberate practice does not simply expand domain-specific knowledge and skills; it also generates actual enhancements to basic cognitive resources (e.g., memory, perception, metacognition). We suggest that to the extent entrepreneurs acquire enhanced cognitive resources through current or past deliberate practice, their capacity to perform tasks related to new venture success (e.g., accurate identification and evaluation of business opportunities) is enhanced and, hence, the performance of their new ventures, too, is augmented. Specific ways in which entrepreneurs can gain enhanced cognitive resources are described, and implications for entrepreneurship theory and practice are considered. Copyright © 2010 Strategic Management Society. Strategic Entrepreneurship Journal 2010 PDF Download
How community context affects entrepreneurial process: A diagnostic framework Kevin Hindle This study reports a multi-faceted search to discover and articulate, in the form of a manageable framework, a diagnostic system for assessing the influence that community factors will have upon the conduct and outcome of any proposed entrepreneurial process. A methodological approach based on investigation of a rich empirical database supported by a wide examination of extant theory in several literatures, resulted in the production of a diagnostic system whose diagrammatic depiction employs a ?bridge? analogy. It depicts the culmination of the diagnostic procedure as the ability of different travellers (entrepreneurial actors and community members affected by their actions) to proceed via multiple pathways from an origin to a destination. The origin is a deep understanding of the community as an intermediate environment containing factors both conducive and hostile to any proposed entrepreneurial process. This deep understanding is founded upon intense local examination of the nature and interrelationship of three generic institutional components of any community: physical resources, human resources and property rights, and three generic human factors: human resources, social networks and the ability to span boundaries. The destination thus becomes a contextualised understanding and re-articulation of any proposed entrepreneurial process under consideration. Validation of the efficacy of the framework is being undertaken internationally as a key component of seven substantial projects, which simultaneously involve research and practice. Implications for research and practice are discussed. Entrepreneurship & Regional Development 2010 PDF Download
How can we know the dancer from the dance?: Reply to “Entrepreneurship as the structuration of individual and opportunity: A response using a critical realist perspective”. Yolanda Sarason
Thomas J. Dean
J Dillard
  Journal of Business Venturing 2010 PDF Download
Focus on opportunities as a mediator of the relationship between business owners’ age and venture growth. Michael Gielnik
MIchael Frese Zacher
Focus on opportunities as a mediator of the relationship between business owners’ age and venture growth. Journal of Business Venturing 2010  
Financing decisions as a source of conflict in venture boards Daniel P Forbes
M. Audrey Korsgaard
Harry Sapienza
Governance scholarship has suggested that venture boards should be structured so as to stimulate internal conflict. However, structure is a weak predictor of board effectiveness. Moreover, conflict can be dysfunctional, especially when it is focused on relationships rather than tasks. We show that venture boards experience more relationship conflict when they make financing decisions that involve devaluation of the venture and that this effect is moderated by whether the CEO is a founder. Our findings should prompt venture governance scholars to reconsider the importance of board structure, the value of board conflict and the behavior of founder- versus non-founder CEOs. Journal of Business Venturing 2010 PDF Download
EXPERTS RELY LESS ON PLANNING THAN NOVICES: EVIDENCE FOR EFFECTUATION FROM NASCENT TECHNOLOGY COMMERCIALIZERS (SUMMARY) Erik Willard Monsen
Courtney Price
Sandra Miller
While some researchers find that business planning can improve the growth and survival of new ventures (Gruber, 2007), others find that successful entrepreneurs improvise and effectuate rather than plan (Dew, Read, Sarasvathy, & Wiltbank, 2009). Recent research suggests that these findings are not in conflict, rather, business planning is simply less important for more experienced entrepreneurs (Dencker, Gruber, & Shah, 2009). Extending research on entrepreneurial intentions (Krueger, Reilly, & Carsrud, 2000), we investigate if this applies to earlier-stage entrepreneurial situations and, in particular, nascent-stage technology commercialization intentions of scientists. Frontiers of Entrepreneurship Research 2010 PDF Download
Experiencing Family Business Creation: Differences Between Founders, Nonfamily Managers, and Founders of Nonfamily Firms Michael Morris
Jerry Allen
Kuratko Donald F.
Dave Brannon
An experiential perspective for examining family business creation is introduced. As a “lived experience,” the family firm generates a cumulative series of interdependent events that takes on properties rooted in affect. The family business is a context that enables unscripted temporal performances by founders. Characteristics of the venture creation experience are examined, and underlying dimensions are proposed and empirically investigated. Building on social capital theory, differences in experiences between founders of family businesses, nonfamily managers, and founders of nonfamily ventures are explored. These differences are argued to have important implications for decision making and ongoing dynamics within the family firm. Entrepreneurship Theory and Practice 2010 PDF Download
Escaping the green prison: Entrepreneurship and the creation of opportunities for sustainable development Desirée F. Pacheco
Thomas J. Dean
David Payne
While entrepreneurial activity has been an important force for social and ecological sustainability; its efficacy is dependent upon the nature of market incentives. This limitation is sometimes explained by the metaphor of the prisoner’s dilemma, which we term the green prison. In this prison, entrepreneurs are compelled to environmentally degrading behavior due to the divergence between individual rewards and collective goals for sustainable development. Entrepreneurs, however, can escape from the green prison by altering or creating the institutions–norms, property rights, and legislation–that establish the incentives of competitive games. We provide a variety of evidence of such entrepreneurial action and discuss its implications for theory and practice. Journal of Business Venturing 2010 PDF Download
Envirofit International: A Venture Adventure Paul Hudnut
Dawn DeTienne
This case focuses on Envirofit International, a student start-up venture that began in an undergraduate entrepreneurship course. Two engineering students and two faculty members at a land grant university in the United States designed a retrofit kit to vastly reduce emissions from dirty two-stroke motorcycles, which are used throughout Asian cities as taxis. This case presents the beginnings of the Envirofit story, and the issues involved in creating an entrepreneurial venture focused on triple bottom line objectives in “base of pyramid” markets. Specifically, the case examines the ambiguity facing a start-up as it begins to develop a technology, a business model, and a management team. The case demonstrates the tension between planning and doing in managing the uncertainty facing a new venture. Entrepreneurship Theory and Practice 2010  
ENTREPRENEURSHIP Conference Paper Abstracts. effectuation The article presents abstracts on entrepreneurship topics which include the influence of tie-order on network emergence, a complexity science-based model for innovation and the formation of entrepreneurial enterprises, and fuzzy-set hierarchical classification of family businesses. Academy of Management Proceedings 2010  
Entrepreneurial Spirals: Deviation-Amplifying Loops of an Entrepreneurial Mindset and Organizational Culture Dean Shepherd
Holger Patzelt
Michael Haynie
As environments become more dynamic and increasingly competitive, organizations must become more entrepreneurial. To explain how and why an organization becomes more (or less) entrepreneurial over time, we investigate the interrelationship between the psychology of individuals and the culture of organizations. To that end, we develop the notion of entrepreneurial spirals—enduring, deviation-amplifying loops—that serve to link the manager’s mindset to his or her organization’s culture and vice versa. We investigate how entrepreneurial spirals start, perpetuate, and stop, and detail the implications and insights suggested by entrepreneurial spirals for the relationship between managerial mindset and organizational culture. Entrepreneurship Theory and Practice 2010 PDF Download
Entrepreneurial exit as a critical component of the entrepreneurial process: Theoretical development Dawn DeTienne By demonstrating the importance of entrepreneurial exit to the entrepreneur, the firm, the industry, and the economy I contend that our understanding of the entrepreneurial process is incomplete without the inclusion of entrepreneurial exit. I define entrepreneurial exit and demonstrate how this conceptualization provides concepts that are unique from those addressed by researchers in other domains; thus outlining a space for it within the literature. In each phase of the entrepreneurial process I explore the development of an exit strategy, reasons for exit and options for exit. Journal of Business Venturing 2010 PDF Download
ENTREPRENEURIAL ARCHETYPES IN MAKING SENSE OF THE STRUCTURAL HOLES (SUMMARY) Antti J Kauppinen
Puhakka, Vesa
Entrepreneurial qualities have been discussed for over twenty years, but there is no consensus about how much the personality differences vary between entrepreneurs and non-entrepreneurs (Gartner 1989; Delmar 2006; Busenitz & Barney 1997 see Kirzner 1997; Gaglio & Katz 2001). The entrepreneurial activities, processes, networks, events, and structural holes are widely discussed, but the problem of the mythic entrepreneur has remained an unsolved matter (Obgor 2000; Bruni, Gherardi & Poggio 2004; Mirchandani 1999). Nevertheless, social ties in particular are seen to be different between entrepreneurs and non-entrepreneurs (Burt 1992; Venkataraman 1997; Sarasvathy 2001 see Granovetter 1973). Approaches considering social ties and structural holes neglect the fundamental nature of the phenomenon of entrepreneurship, as the actors are separated from their context (Sarasvathy 2004; Gartner 1989). In this study, we used a sense-making approach in investigating the context-dependent phenomenon of the subjective creation of the structural holes (see Burt 1992; Burt, Hogarth & Michaud 2000; Burt 2004). We argue that the entrepreneurs are no different than other people as persons, but instead they are different as sense-makers in the creation of structural holes (see Weick 1995; Berger & Luckmann 1966). Therefore, it is more meaningful to discuss the entrepreneurial archetypes rather than personality differences. Frontiers of Entrepreneurship Research 2010 PDF Download
EFFECTUAL CELLS: FOSTERING INNOVATION-BASED CORPORATE ENTREPRENEURSHIP THROUGH CONDITIONS FOR EFFECTUAL PROCESSES (INTERACTIVE PAPER) Alvaro Filipe da Costa Corporate Entrepreneurship (CE) features many of the same uncertainties as classical entrepreneurship, e.g. the dependency on innovation outcomes which are difficult to predict (Phan et al., 2009). Moreover, both types of entrepreneurship often involve the possibility of constructing an environment rather than only positioning oneself in a given environment, thus calling for approaches to control and shape rather than merely adapt and predict (Wiltbank et al., 2006). The effectuation approach (Sarasvathy, 2001) thereby seems suited to describe CE situations. We focus on innovation-based CE (ICE), as innovation is the preeminent mechanism for creating business that generates new revenue streams and creates value for shareholders (Kelley, Peters & O’Connor 2009; Narayanan, Yang & Zahra, 2009), and analyze the influence of newness in respect to market and technology as an indicator of innovativeness (Hill and Rothaermel, 2003) . This study examines the performance of corporate innovation projects, the characteristics of their respective processes and the antecedents of these processes. We establish that highly innovative CE benefits from effectual processes (as opposed to causative processes) and develop hypotheses regarding antecedents of such processes in established companies. More specifically, we seek to concretize the concept of “effectual cells” (Wiltbank et al., 2008). Frontiers of Entrepreneurship Research 2010 PDF Download
Dominant Logic and Entrepreneurial Firms’ Performance in a Transition Economy Tomasz Obloj
Krzysztof Obloj
Michael G. Pratt
Dominant logic is the manner in which firms conceptualize and make critical resource-allocation decisions, and over time develop mental maps, business models, and processes that become organizational recipes. This study compares and contrasts the dominant logic of Polish entrepreneurial firms. We find evidence that a dominant logic characterized by external orientation, proactiveness, and simplicity of routines significantly influences the performance of entrepreneurial firms in this emerging economy. These dominant logic characteristics of high performers serve as a key intangible resource in transition economies that are characterized by the absence of strong institutions and resource constraints. Future research in this critical domain should include how dominant logic needs in transition economies evolve over time as the institutional environment matures and market mechanisms become more solidified. Entrepreneurship Theory and Practice 2010 PDF Download
Does family employment enhance MSEs performance?: Integrating socioemotional wealth and family embeddedness perspectives. Christina Cruz
Rachida Justo
Julio De Castro
This paper analyzes the effect of family employment on performance in micro and small enterprises (MSEs) by combining two research perspectives that, until now, have been conducted separately: the family embeddedness perspective of entrepreneurship (Aldrich and Cliff, 2003) and the socioemotional wealth (SEW) approach to family business (Gomez-Mejia et al 2007). Our integrated perspective allows us to highlight how the nature of the employment relationships in MSEs enhances the benefits derived from the socioemotional endowment associated with family labor, and reduces the opportunity costs of employing relatives. Moreover, we assert that this relationship is moderated by specific family characteristics that determine the firm’s ability to preserve the SEW, while at the same time pursuing financial goals. Our results provide partial support to the enhancing role of family labour on MSEs performance: employing family members increases sales but decreases profitability as measured by ROA. This effect also results in improved performance for women-led firms and for firms that have received family funding, but impairs MSEs performance when the business is the main source of the owner´s household income. Journal of Business Venturing 2010 PDF Download
DO RISK ATTITUDES DIFFER WITHIN THE GROUP OF ENTREPRENEURS? Ioanna Deligianni
Irini Voudouris
LIOUKAS SPYROS
Little research exists on the risk attitudes of different types of entrepreneurs. Our focus is on the entrepreneurs’ motivations to start their business. We find that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, entrepreneurs who are motivated by creativity are more risk-tolerant than other entrepreneurs. Academy of Management Proceedings 2010 PDF Download
Do market information processes improve new venture performance? Michael Song
Tang Wang
Mark Parry
Does market information improve new venture performance? While some researchers argue that entrepreneurs do not need formal processes to collect and use market information, others suggest that the use of formal market information processes is positively related to firm performance. In this paper, we hypothesize that new venture performance is an increasing function of (1) the firm’s level of customer interaction and (2) the use of formal processes for collecting and utilizing market information. We also hypothesize that these linkages will be stronger among new ventures serving emerging markets (i.e., markets in which customer needs and segments are evolving). We test these hypotheses using data collected from 224 new ventures located in the United States. Our findings indicate that, regardless of market condition, formal processes for the collection of market information are positively associated with the use of formal processes for market information utilization and this relationship is stronger among firms serving established markets. In addition, new venture performance is positively associated with the use of formal processes for utilizing market information and this relationship is also stronger in established markets. We also find that, in emerging markets, new venture performance is a positive function of the use of formal processes for collecting market information. Contrary to expectations, we find that, regardless of market condition, the level of customer interaction has a negative relationship with the use of formal processes for market information utilization and no significant relationship with performance. Journal of Business Venturing 2010  
CURRY IN A HURRY? A LONGITUDINAL STUDY ON THE ACCELERATION OF PERFORMANCE THROUGH EFFECTUATION BY NASCENT ENTREPRENEURS (SUMMARY) René Mauer
Willem Smit
Jeffery York
“Curry in a Hurry” is the name of the imaginary Indian restaurant introduced by Sarasvathy (2001) to illustrate the concept of effectuation. Since then, empirical evidence on effectuation is growing. After examinations in various industry contexts – radio frequency (Sarasvathy and Dew, 2002) and private equity (Wiltbank, Read, Dew, and Sarasvathy, 2009) – protocol analyses have shown that expert entrepreneurs use these heuristics more often than MBA graduates (Read, Dew, Sarasvathy, Wiltbank, 2009). There is also evidence that effectual logic increases new venture performance (Read, Song, and Smit, 2009). However, it is still unknown whether effectuation is purely the domain of expert entrepreneurs; and whether this logic would help nascent entrepreneurs accelerate their new firm creation. We address this issue by decomposing the total effect of effectuation on new firm creation effect into a two-stage mechanism. First, we develop and test hypotheses about the effect of the four effectual principles on new firm creation. Second, we examine whether these effects are mediated by the two dynamic cycles of expanding means and converging goals in motion. Frontiers of Entrepreneurship Research 2010 PDF Download
COGNITIVE INSIGHT AND ENTREPRENEUR DECISION-MAKING: AN EXPERIMENTAL INVESTIGATION OF SELF-REFLECTIVENESS IN OPPORTUNITY IDENTIFICATION (INTERACTIVE PAPER) DAVID M TOWNSEND
Steven M Barr
Identifying and exploiting opportunities is frequently described as the most fundamental of entrepreneurial behaviors (Shane & Venkataraman, 2000; Venkataraman, 1997). However, recent work criticizes the teleological basis of most extant theories of the opportunity identification process arguing that many entrepreneurs do not start firms with specific goals or outcomes in mind (Sarasvathy, 2001). Rather, “effectual” entrepreneurs initiate operations with only a general goal in mind (i.e., avoid significant losses). As the market and firm evolves, more specific plans are then formulated and action becomes increasingly more intentional. In reviewing effectuation theory, however, a major question remains unanswered—specifically, why would clearly specifying goals up-front prevent entrepreneurs from taking advantage of contingencies that may arise during the firm creation process? An unstated assumption implied in effectuation theory appears to be that entrepreneurs fully specifying desired outcomes a priori would be less likely (or less willing) to make radical adjustments to their plans. At the base of this assumption is the implied belief that a fundamental decision bias (i.e., escalation of commitment) locks entrepreneurs with strong prior goals into particular courses of action, and, therefore, market dynamism which shifts demand away from the expected trajectory of the market would generate massive losses for the venture. Frontiers of Entrepreneurship Research 2010 PDF Download
Business owners’ network size and business growth in China: The role of comprehensive social competency Xiang-yang Zhao
MICHAEL FRESE
Angelo Giardini
The authors present a model that explains how comprehensive social competency (made up of three components ? social skills, proactive and elaborate social strategies, and relational perseverance) is related to business people’s network development, and how social networks in turn are related to business growth. We conducted two studies with Chinese small business owners, ? one in the capital city Beijing (N?=?133) and a second one in the less developed rural region of Xunyi (N?=?78). Comprehensive social competency was consistently related to network size and business growth. In addition, government network size was related to the business growth since start-up in both studies (employee growth in Study 1 and personal asset growth in Study 2), but business network size was not related to business growth. Government network size also functions as a partial mediator between comprehensive social competency and business growth since start-up. Some differences are found between the rural area and the urban centre. Entrepreneurship & Regional Development 2010 PDF Download
Beyond hubris: How highly confident entrepreneurs rebound to venture again Saras Sarasvathy
Mathew L.A. Hayward
Bill Forster
Barbara L. Fredrickson
This article outlines why highly confident entrepreneurs of focal ventures are better positioned to start and succeed with another venture; and therefore why overconfidence in one’s capabilities functionally persists and pervades amongst entrepreneurs. By combining cognitive perspectives on confidence in decision making with Fredrickson’s [Fredrickson, B.L. 1998. What good are positive emotions?. Review of General Psychology, 2, 300–319.; Fredrickson, B.L. 2001. The role of positive emotions in positive psychology: the broaden-and-build theory of positive emotions. American Psychologist, 56, 218–226.; Fredrickson, B.L. 2003. The value of positive emotions. American Scientist, 91: 330–335] ‘broaden-and-build’ theory of positive emotions, this paper elaborates the manner in which such entrepreneurs can develop emotional, cognitive, social and financial resilience that can be marshaled and mobilized for a subsequent venture. Journal of Business Venturing 2010 PDF Download
ATTRACTIVENESS OF VENTURE IDEA AMONGST EXPERT ENTREPRENEURS: A CONJOINT ANALYSIS (INTERACTIVE PAPER) Dissanayake M. Semasinghe Venture ideas are at the heart of entrepreneurship (Davidsson, 2004). However, we are yet to learn what factors drive entrepreneurs’ perceptions of the attractiveness of venture ideas, and what the relative importance of these factors are for their decision to pursue an idea. The expected financial gain is one factor that will obviously influence the perceived attractiveness of a venture idea (Shepherd & DeTienne, 2005). In addition, the degree of novelty of venture ideas along one or more dimensions such as new products/services, new method of production, enter into new markets/customer and new method of promotion may affect their attractiveness (Schumpeter, 1934). Further, according to the notion of an individual-opportunity nexus venture ideas are closely associated with certain individual characteristics (relatedness). Shane (2000) empirically identified that individual’s prior knowledge is closely associated with the recognition of venture ideas. Sarasvathy’s (2001; 2008) Effectuation theory proposes a high degree of relatedness between venture ideas and the resource position of the individual. This study examines how entrepreneurs weigh considerations of different forms of novelty and relatedness as well as potential financial gain in assessing the attractiveness of venture ideas. Frontiers of Entrepreneurship Research 2010 PDF Download
Are opportunities recognized or constructed?: An information perspective on entrepreneurial opportunity identification Ivan P Vaghely
Pierre Andre Julien
Using a case study of ten SMEs the authors apply a model of human information processing which provides a frame to help understand the entrepreneur’s use of information to identify opportunities. Their model integrates an algorithmic or pattern type of information processing and a heuristic or trial and error type of information processing into a pragmatic frame of the entrepreneur’s opportunity recognition-construction mechanism. This article shows how human information processing can moderate entrepreneurial opportunity identification. Journal of Business Venturing 2010 PDF Download
AN UNDERLYING MECHANISM OF ENTREPRENEURIAL DECISION MAKING: A COGNITIVE-AFFECTIVE-SOCIAL PROCESS SYSTEM APPROACH (INTERACTIVE PAPER) Qian Ye
Sherry Thatcher
In uncertain environments, entrepreneurial experts have a tendency to engage in effectuation, a transformative decision-making response, rather than in prediction-based decision making (Sarasvathy, 2001). Recent research has also found that venture founders differ in their application of both effectual and causal approaches (Mauer, 2009). Yet, little research has investigated why and when entrepreneurs use an effectual decision-making approach rather than a causal decision-making approach. In this paper we extend theory by exploring the relationship between the effectual vs. causal approaches of entrepreneurial decision making and an individual’s internal affective-cognitive structures (Mischel & Shoda, 1998; Izard 1977; 1993). We propose that entrepreneurs differ in their use of decision making reasoning rather than adopt a single effectual vs. causal approach consistently across various situations. Entrepreneurs’ affect, cognition, and venture creating contexts have interactive effects on entrepreneurial decision making and venturing behaviour. Frontiers of Entrepreneurship Research 2010 PDF Download
An Auto-Ethnographic Perspective on Academic Entrepreneurship: Implications for Research in the Social Sciences and Humanities Morten Pilegaard
Peter W Moroz
Helle Neergaard
This paper employs a qualitative method to analyze a successful spin-off from a university’s humanities department. We offer insight into (a) how sociospatial contexts may be structured to better evaluate the entrepreneurial facilitation process and (b) why academic entrepreneurship in the social sciences and humanities may differ from that in the hard sciences. Our findings illustrate the importance of bridging innovation using twin skills to balance research and commercial goals, and the need for codifying knowledge capacities and creating new or changing existing institutional structures to legitimize and facilitate entrepreneurial activity. The research also demonstrates the great value of auto-ethnographic techniques to bring fresh insight to the study of entrepreneurship. Directions for future research are offered. The Academy of Management Perspectives 2010 PDF Download
Acquisitions As Exaptation: The Legacy of Founding Institutions in the U.S. Commercial Banking Industry Christopher Marquis
zhi huang
This study focuses on how founding institutions impact intraorganizational capabilities and how such imprints may have different external manifestations in subsequent historical eras. We introduce the concept of exaptation to organizational theory, identifying an important process whereby the historical origin of a capability differs from its current usefulness. Three founding conditions—branching policy, modernization, and political culture—influenced banks’ development of capabilities for managing dispersed branches, and these capabilities subsequently led to variation in banks’ propensity to engage in acquisitions. Academy of Management Journal 2010  
A Terminal Assessment of Stages Theory: Introducing a Dynamic States Approach to Entrepreneurship Jonathan Levie
Benyamin Lichtenstein
Stages of growth models were the most frequent theoretical approach to understanding entrepreneurial business growth from 1962 to 2006; they built on the growth imperative and developmental models of that time. An analysis of the universe of such models (n = 104) published in the management literature showed no consensus on basic constructs of the approach, and no empirical confirmation of stages theory. However, by changing two propositions of stages theory, a new dynamic states approach was derived. The dynamic states approach has far greater explanatory power than its precursor, and is compatible with leading edge research in entrepreneurship. Entrepreneurship Theory and Practice 2010 PDF Download
A SOCIAL NETWORK PERSPECTIVE ON THE DEAL FLOW OF BUSINESS ANGELS. CHRISTOPH GARBOTZ
ANDREAS ENGELEN
PHILIPP NIEMANN
Business angels play a crucial role in new venture financing, but “the private investor market is still largely incompletely understood, inefficient and understudied” (Baty & Sommer, 2002: 290). Based on an empirical study we investigate different drivers of business angels’ two deal flow dimensions, i.e. quantity and quality. Academy of Management Proceedings 2010  
A SOCIAL NETWORK PERSPECTIVE ON THE DEAL FLOW OF BUSINESS ANGELS. CHRISTOPH GARBOTZ
ANDREAS ENGELEN
PHILIPP NIEMANN
Business angels play a crucial role in new venture financing, but “the private investor market is still largely incompletely understood, inefficient and understudied” (Baty & Sommer, 2002: 290). Based on an empirical study we investigate different drivers of business angels’ two deal flow dimensions, i.e. quantity and quality. Academy of Management Proceedings 2010 PDF Download
A situated metacognitive model of the entrepreneurial mindset Haynie J.M
Shepherd Dhliwayo
Mosakowski E
P C Earley
We develop a framework to investigate the foundations of an ‘entrepreneurial mindset’ — described by scholars as the ability to sense, act, and mobilize under uncertain conditions. We focus on metacognitive processes that enable the entrepreneur to think beyond or re-organize existing knowledge structures and heuristics, promoting adaptable cognitions in the face of novel and uncertain decision contexts. We integrate disparate streams of literature from social and cognitive psychology toward a model that specifies entrepreneurial metacognition as situated in the entrepreneurial environment. We posit that foundations of an entrepreneurial mindset are metacognitive in nature, and subsequently detail how, and with what consequence, entrepreneurs formulate and inform “higher-order” cognitive strategies in the pursuit of entrepreneurial ends. Journal of Business Venturing 2010 PDF Download
You Say Illegal, I Say Legitimate: Entrepreneurship in the Informal Economy. Justin Webb
Laszlo Tihanyi
Duane Ireland
David Sirmon
The entrepreneurial process drives economic activities in the formal economy; however, little is known theoretically about how the entrepreneurial process works in the informal economy. To address this theoretical gap, we employ a multilevel perspective integrating entrepreneurship theory (microlevel) with institutional (macrolevel) and collective identity (mesolevel) theories to examine the role institutions and collective identity play in the recognition and exploitation of opportunities in the informal economy. Additionally, we explore factors that influence the transition to the formal economy. Academy of Management Review 2009 PDF Download
WHAT MAKES SOME FIRMS MORE COMPETITIVELY AGGRESSIVE THAN OTHERS? EVIDENCE FROM THE BANKING INDUSTRY. JEFF STAMBAUGH
G.T. Lumpkin
CLAUDIA COGLISER
KEITH BRIGHAM
The article presents research on competition. The question of what leads companies to become more aggressively competitive, creating business practices which directly target rival firms, is considered. It is hypothesized that competitive aggressiveness has a positive relationship to financial performance, a relationship which can be modified by factors such as the costs of such a strategy or market density. Community banks in Texas, New Mexico and Oklahoma were examined. It was found that in less dense markets, market share growth did not translate into increased profitability. Academy of Management Proceedings 2009 PDF Download
Unpacking entrepreneurship as collective activity: opportunities, activity and context Saras Sarasvathy
Nick Dew
Marc J. Ventresca
In “The next wave of entrepreneurship research,” Schoonhoven and Romanelli (hereafter S&R, this volume) set forth a broad-gauge review of recent work in entrepreneurship. They challenge standard debates and focus on arguments and research that explore large-scale contextual variation in complex ecologies of entrepreneurship over time. Further, their review puts networks and teams, communities of expertise and knowledge, and collective activity at the center of new directions for entrepreneurial research. They contend, in this paper and elsewhere, that the important questions going forward “concern the mass effects of entrepreneurial activity on the creation of new firms and industries, the pioneering of emerging markets, the evolution of existing industries, the development of regional economies, and even … the competitiveness of nations” (Schoonhoven & Romanelli, 2001, p. 383). Entrepreneurial Strategic Content 2009  
Towards an alternative theory of entrepreneurial success: Integrating bricolage, effectuation and improvisation summary G R Archer
Thomas Baker
René Mauer
Contemporary theoretical perspectives in entrepreneurship suggest an idealized linear model of successful entrepreneurship in which advantage goes to those who discover lucrative opportunities (Kirzner, 1997; Shane and Venkataraman, 2000), adopt consistent goals and strategies to exploit them (Wiklund & Shepherd, 2005), marshal appropriate high quality resources and deploy these resources in a capable and disruptive manner (Schumpeter, 1934) to earn monopoly rents. Increasingly, however, empirical research suggests that much entrepreneurial activity and even successful entrepreneurship sometimes violate multiple aspects of this model (Carter, Gartner & Reynolds, 1996; Alvarez & Barney, 2006; Lichtenstein, et al., 2007). Against this backdrop, scholars have proposed several theoretical perspectives – including bricolage (Garud & Karnoe, 2003; Baker & Nelson, 2005), effectuation (Sarasvathy, 2001; Wiltbank et al., 2006) and improvisation (Miner, et al., 2001; Crossan et al., 2005) – that are useful in making sense of these discordant patterns. Despite several common themes and family resemblances among these perspectives, little work has clarified important distinctions among them or attempted an integrative framework. Both tasks are necessary in order to make progress toward an alternative theory of entrepreneurial success. Frontiers of Entrepreneurship Research 2009 PDF Download
The suitability of the configuration approach in entrepreneurship research Rainer Harms
Sascha Kraus
Erich Schwarz
The aim of this paper is to discuss the configuration approach as applied in the context of new ventures. A key topic in entrepreneurship research is the analysis of new venture performance (NVP) and change. Taking into account variations in the population of new ventures and considering the complex nature of NVP and development, the configuration approach may be helpful for these analyses. The configuration approach seeks to identify firm types and explicitly considers interrelations between personal, structural, strategic, and environmental factors pertaining to new ventures. In doing this, refined modelling of NVP and an integration of theoretical approaches in entrepreneurship research may be achieved. However, the configuration approach may not be applied without a prior discussion of its suitability to the research context of new ventures. Any time a research approach is applied in a (new) research context, key aspects of this approach may be violated, which could lead to questionable results. We discuss key assumptions of the configuration approach, the concepts of fit, of equifinality, of reductive mechanisms, and of configuration changes, and find that these building blocks also apply in the context of new ventures. Then, we argue that a specific emphasis on the founder and on the environment and the consideration of unique variable patterns are elements of a configuration approach for new ventures. Entrepreneurship & Regional Development 2009 PDF Download
The Resource-Based View: A Review and Assessment of Its Critiques Jeroen Kraaijenbrink
JC Spender
Aard Groen
The resource-based view (RBV) of the firm has been around for over 20 years?during which time it has been both widely taken up and subjected to considerable criticism. The authors review and assess the principal critiques evident in the literature, arguing they fall into eight categories. They conclude the RBV?s core message can withstand criticism from five of these quite well provided the RBV?s variables, boundaries, and applicability are adequately specified. Three critiques that cannot be readily dismissed call for further theorizing and research. They arise from the indeterminate nature of two of the RBV?s basic concepts?resource and value?and the narrow conceptualization of a firm?s competitive advantage. As their suggestions for this work indicate, the authors feel the RBV community has clung to an inappropriately narrow neoclassical economic rationality, thereby diminishing its opportunities for progress. The authors? suggestions may assist with developing the RBV into a more viable theory of competitive advantage, especially if it is moved into a genuinely dynamic framework. Journal of Management 2009 PDF Download
TEAMS IN THE ENTREPRENEURIAL PROCESS: AN INPUT-MEDIATOR-OUTPUT-INPUT (IMOI) APPROACH. CHIEN-SHENG RICHARD CHAN The article presents an analysis of the ways in which entrepreneurial team dynamics are affected by factors such as environmental uncertainty and changes in team composition. A discussion of related research is provided, along with a set of propositions and hypotheses related to such studies. Recommendations for entrepreneurial team leadership are proposed. It is argued that optimal outcomes can best be achieved by focusing on the controllable aspects of both internal and external conditions. The importance of distinguishing between optimizing for initial conditions and optimizing for an established venture is stressed. Academy of Management Proceedings 2009 PDF Download
STRATEGY FORMATION OF ENTREPRENEURIAL TEAMS: A LONGITUDINAL STUDY IN NASCENT VENTURES (SUMMARY) Dietmar Grichnik
Jan Brinckmann
Diana Kapsa
Explanations for how entrepreneurs deal with uncertainty and develop their strategies can be found in two streams of literature: the entrepreneurial strategy literature and the entrepreneurial cognition literature. Recent research in these fields suggests that focusing on the individual level of the nascent entrepreneur and taking a cognition-based approach might be beneficial for understanding first-time strategy formation. Our study is concerned with one central question concerning first-time formation of a strategic mindset at the individual level. How does a strategic mindset come into existence at early stages of the entrepreneurial process? We analyze whether and how strategic mindsets come into existence focusing on three aspects: the extent of prediction orientation (Wiltbank et al., 2006; Sarasvathy, 2001), the extent to which the entrepreneur focuses on risk limitation as opposed to return maximization, i.e. the risk-return orientation (Sarasvathy et al., 1998; Sarasvathy, 2007; Dew et al., 2008; Sarasvathy, 2003), and the extent of strategic flexibility (Nicholls-Nixon, Cooper, 2000). Frontiers of Entrepreneurship Research 2009 PDF Download
Strategic Entrepreneurship at Universities: Academic Entrepreneurs’ Assessment of Policy Programs Holger Patzelt
Dean Shepherd
In this article we draw on goal-setting theory to analyze how and why entrepreneurs perceive the usefulness of policy programs aimed at facilitating the development of academic ventures. Using a conjoint study and data on 3,136 assessments nested within 98 academic entrepreneurs, we find that access to finance offered by a policy program is central and enhances the entrepreneurs’ perceived benefits of other policy measures such as providing access to nonfinancial resources (networks, business knowledge) and reducing administrative burdens, but diminishes the perceived benefits of offering tax incentives for new ventures. Our results extend the literature on academic entrepreneurship and entrepreneurs’ assessments of government policy measures. For policy makers, our study suggests that the simultaneous launch of policy measures may be perceived by academic entrepreneurs as particularly beneficial for fostering the development of their young ventures. Entrepreneurship Theory and Practice 2009 PDF Download
Siding with the Angels – Business Angel Investing: Promising Outcomes and Effective Strategies Rob Wiltbank After entrepreneurs develop an opportunity, and use up their own resources, they often turn to business angel investors for early investment to keep the venture growing. At this point in the development of new ventures the risk of failure is significant; many aspects of the business including customer relationships, pricing strategy, talent, and other key factors are quite unclear. Yet there are a growing number of investors known as ‘business angels’ willing to invest at this point. They have become an increasingly important source of equity finance over the last decade for new and nascent businesses as venture capital investors are not able to accommodate a large number of small deals with their attendant due diligence and oversight needs. Business angels are now prominent co- investment partners in the early-stage market. Understanding why investors would involve themselves in anything so risky is important, given the contribution of innovative start-up businesses to the economy. Although there is no comprehensive survey of business angel activity available, an estimated 4,000 to 6,000 business angels were investing up to £1 billion annually by 2000. Despite their increasing importance, little is known about the outcomes of business angel investment and returns in the UK. Mason and Harrison5 conducted the first attempt to identify the returns and characteristics of the UK business angel investors, pointing out the lack of evidence on the outcomes of investments by business angels. They suggested that this “represents a significant gap in our knowledge and understanding of an important segment of the venture capital market”. NESTA / British Angels Business Association 2009 PDF Download
Serendipity in entrepreneurship Nick Dew This paper addresses the concept of serendipity in entrepreneurship, defined as search leading to unintended discovery. It conceptually delineates serendipity, showing how it is related to the entrepreneurship literature on prior knowledge and systematic search. The paper also discusses how serendipitous entrepreneurship relates to some aspects of evolutionary theory, socio-economic institutions, and social psychology. It is suggested that serendipity may be a quite prevalent feature of entrepreneurship and thus has implications for both research and practice. Organization Studies 2009 PDF Download
Self-regulation and moral awareness among entrepreneurs. Peter Bryant Moral awareness underpins moral reasoning and ethical decision making. This mixed methods study investigates a critical feature of these phenomena among entrepreneurs, namely the influence of social cognitive self-regulation on moral awareness. Results suggest that entrepreneurs with stronger self-regulatory characteristics are more morally aware and relate such awareness to maintaining personal integrity and building inter-personal trust. In contrast, entrepreneurs with weaker self-regulatory characteristics appear less morally aware overall, and focus primarily on moral issues relating to failure and loss. I conclude the paper by discussing the implications for future research and practice. Journal of Business Venturing 2009 PDF Download
RESOURCES AND THE TEAM FORMATION PROCESS (SUMMARY) Isil Yavuz
Hans Rawhouser
Daniel P Forbes
Mary E. Zellmer-Bruhn
In building a new venture management team, do entrepreneurs seek team members to fill specific roles on the team needed to exploit an opportunity? Or do they consider what opportunities they can create, given their current team? Research on new business creation has traditionally favored a “planning” approach in which entrepreneurs recognize business opportunities, identify their goals (possible effects), and then choose the most effective means to achieve their goals by acquiring resources and creating an organization (e.g. Bhave, 1994). But others (e.g. Sarasvathy, 2001) have indicated that some entrepreneurs “effectuate”: that is, they focus primarily on the resources (means) under their control, and then go through a process of finding goals that can be accomplished with those resources. However, relatively little empirical research has addressed the conditions under which an entrepreneur will use planning and/or effectuation processes in the formation of his/her entrepreneurial team. In this study, we ask “what factors determine whether entrepreneurs follow planning or effectuation processes in forming their entrepreneurial teams?” Frontiers of Entrepreneurship Research 2009 PDF Download
Related Debates in Ethics and Entrepreneurship: Values, Opportunities and Contingency Saras Sarasvathy
Susan S Harmeling
R Edward Freeman
In this paper, we review two seemingly unrelated debates. In business ethics, the argument is about values: are they universal or emergent? In entrepreneurship, it is about opportunities – are they discovered or constructed? In reality, these debates are similar as they both overlook contingency. We draw insight from pragmatism to define contingency as possibility without necessity. We analyze real-life narratives and show how entrepreneurship and ethics emerge from our discussion as parallel streams of thought. Journal of Business Ethics 2009  
Prediction and Control Under Uncertainty: Outcomes in Angel Investing Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
Venture investing plays an important role in entrepreneurship not only because financial resources are important to new ventures, but also because early investors help shape the ventures’ managerial and strategic destiny. In this study of 121 angel investors who had made 1038 new venture investments, we empirically investigate angel investors’ differential use of predictive versus non-predictive control strategies. We show how the use of these strategies affects the outcomes of angel investors. Results show that angels who emphasize prediction make significantly larger venture investments, while those who emphasize non- predictive control experience a reduction in investment failures without a reduction in their number of successes. while those who emphasize non- predictive control experience a reduction in investment failures without a reduction in their number of successes. 2009 PDF Download
Portfolio entrepreneurs: an effectuation approach to multiple venture development Sussie Morrish   Journal of Research in Marketing and Entrepreneurship 2009  
PERSONALITY, UNCERTAINTY AND LOGIC: IMPACT ON ENTREPRENEURIAL OUTCOMES. Greg Fisher In this paper I draw on prior empirical findings and theoretical relationships to develop a conceptual model to describe the relationship between personality factors and entrepreneurial outcomes. The model incorporates uncertainty as a moderator and decision logic as mediator in the relationship between personality and entrepreneurial outcomes. Academy of Management Proceedings 2009 PDF Download
Performance Configurations Over Time: Implications for Growth- and Profit-Oriented Strategies. Paul Steffens
Per Davidsson
Jason Fitzsimmons
Strategic entrepreneurship can be described as simultaneous opportunity seeking and advantage seeking. Younger firms are generally more flexible and therefore enjoy “discovery advantages,” whereas established firms tend to be resource rich and more experienced and consequently enjoy “exploitation advantages.” The resulting evolution of the two important performance dimensions, “growth” and “profitability,” by firm age is not well understood. In this article we integrate several theoretical arguments concerning profit–growth relationships to develop a dynamic model of firm development, which suggests different development pathways for young firms. This leads to several unidirectional, competing hypotheses that we examine by studying the profitability-growth configurations of approximately 3,500 small firms and how these configurations evolve over time. We find that for both young and old firms a focus on achieving above-average profitability and then striving for growth is a more likely path toward achieving sustained above-average performance than is first pursuing strong growth in the hope of building profitability later. In line with our hypothesis we find that younger firms are over represented as “Stars” (high on both growth and profitability) and underrepresented as “Poor” (low on both growth and profitability). However, young firms in the “Star” category are also less likely than their older counterparts to maintain that position. Furthermore, our results indicate that young firms are overrepresented not only among “Stars,” but also among growth-orientated firms, regardless of the level of profitability. The findings strongly caution against the blind pursuit of growth for young firms, in favor of a thoughtful analysis of how both growth and profitability might be developed by firms. The results also question whether simultaneous high performance in terms of growth and profitability among young firms usually reflects a successful entrepreneurial strategy. The results can also be interpreted as luck on the part of a subgroup of young firms who indiscriminately pursue growth opportunities with varying profit prospects, and in many cases, the high growth–profit performance will be short lived. Entrepreneurship Theory and Practice 2009 PDF Download
Particularistic and system trust among small and medium enterprises: A comparative study in China’s transition economy Justin Tan
Jun Yang
Rajaram Veliyath
Guanxi, a type of particularistic trust observed in Confucian societies has mostly been viewed as a static phenomenon. It is not clear how the role of guanxi changes over time during institutional transitions. This field study of twenty one small and medium enterprises (SMEs) located in two large cities in Western China examines the changes in SME behaviors since the beginning of economic reforms in 1979. Based on neo-institutionalist trust perspectives, the article argues that the role of guanxi also arose from the paucity of market system trust created by the absence of well-established market institutions during China’s transition from a centrally planned to a market economy. Guanxi became relatively less important when market system trust based on well-established institutions was firmly established. Regardless of past practices, the dynamics of institutional transitions leading to the establishment of system trust inevitably reshapes managerial as well as business behaviors, with adaptation occurring to the new rules of the market economy. Journal of Business Venturing 2009 PDF Download
ORGANIZATION & MANAGEMENT THEORY Conference Symposia Abstracts. n The article presents abstracts of symposia for a conference on organization and management theory including “Attitudes and Latitudes: Origins, Dynamics and Consequences of Regional Identity,” “Behavioral Foundations of Strategy,” and “Beyond Unidimensionality of Social Structure: Consequences and Antecedents of Multiplex Networks.” Academy of Management Proceedings 2009 PDF Download
Organising new business in a turbulent context: Opportunity discovery and effectuation for IJV development in transition markets Mainela, Tuija
Puhakka, Vesa
Research on entrepreneurship has suggested entrepreneurial phenomena to take place in a wide variety of contexts that deal with new venture emergence. Opportunity discovery and effectuation are seen as the essence of entrepreneurship. The present study examines entrepreneurial behaviour in the organising of an international joint venture (IJV) in Polish transition markets. The paper aims to answer the following question: How is an international joint venture organised in turbulent context through opportunity-discovery and effectuation behaviours? Based on theoretical analysis and a longitudinal case study, we illustrate the organising of an international joint venture in transition markets through specific behaviours of opportunity discovery and effectuation. We show especially the relationship-based nature of all the behaviours. The study advances international entrepreneurship research by emphasising the intertwinedness of the entrepreneurial behaviours with the drastic developments in the transition markets and the evolution of the IJV partnership. Journal of International Entrepreneurship 2009 PDF Download
Marketing under uncertainty: The logic of an effectual approach. Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
Michael Song
How does one approach marketing in the face of uncertainty, where the product, the market and the traditional details involved in market research are unknowable ex ante? We use protocol analysis to evaluate how 27 expert entrepreneurs approach such a problem, compared to 37 managers with little entrepreneurial expertise, with all 64 subjects being asked to think aloud as they make marketing decisions in exactly the same unpredictable situation. Our hypotheses are drawn from literature in cognitive science on (a) expertise in general and (b) entrepreneurial expertise in particular. Results show significant differences in heuristics used by the two groups. While those without entrepreneurial expertise rely primarily on predictive techniques, expert entrepreneurs tend to invert these. In particular, they use an effectual or non-predictive logic to tackle uncertain market elements and co-construct novel markets with committed stakeholders. Journal of Marketing 2009 PDF Download
Marketing Under Uncertainty: A Knock on the Door. Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
How do people approach marketing in the face of uncertainty, when the product, the market, and the traditional details involved in market research are unknowable ex ante? The authors use protocol analysis to evaluate how 27 expert entrepreneurs approach such a problem compared with 37 managers with little entrepreneurial expertise (all 64 participants are asked to think aloud as they make marketing decisions in exactly the same unpredictable situation). The hypotheses are drawn from literature in cognitive science on (1) expertise in general and (2) entrepreneurial expertise in particular. The results show significant differences in heuristics used by the two groups. While those without entrepreneurial expertise rely primarily on predictive techniques, expert entrepreneurs tend to invert these. In particular, they use an effectual or nonpredictive logic to tackle uncertain market elements and to coconstruct novel markets with committed stakeholders. Journal of Marketing 2009  
Making rational use of ‘irrationality’? Exploring the role of need for cognitive closure in nascent entrepreneurial activity Mark Schenkel
Charles H Matthews
Matthew W Ford
A fundamental question of interest to both researchers and practitioners alike focuses on why some individuals discover and elect to exploit opportunities to create future goods and services while others do not. Past studies have focused on the role knowledge-based resources play in the early stages of new venture creation, yet few have considered the role cognitive motivations play in impacting the processing and use of information during this process. In this study, we theorize that a cognitive need for closure (NfC), or possessing a desire for an answer on some topic as opposed to enduring confusion and ambiguity, is an important aspect of the entrepreneurial judgment formation process. We hypothesize that the need for closure will be positively related to nascent entrepreneurial activity because it provides a cognitive mechanism for dealing with the opened-ended nature of opportunity pursuit. Data drawn from the Panel Study of Entrepreneurial Dynamics (PSED) support this hypothesis. More specifically, results suggest that a high NfC is likely to foster the exploitation of discovered opportunity irrespective of their age, gender, position in the family birth order, or unique personal knowledge base. Implications for future research and practice are discussed. Entrepreneurship & Regional Development 2009 PDF Download
Judging a business by its cover: An institutional perspective on new ventures and the business plan Tomas Karlsson
Benson Honig
Business plans are widely spread among new businesses, and they are supported by various universities, governmental assistance agencies, management consultants and a wide array of literature. Business plans are often taken for granted as highly useful tools that should be frequently updated and used. This study is based on data from six companies and their environments, over five years, using several forms of data collection such as interviews, observations, and archival data. In contrast to previous studies, we found that initial conformity to business plan norms gradually and without exception lead to loose coupling. Entrepreneurs who wrote business plans never updated or rarely referred to their plans after writing them. Journal of Business Venturing 2009 PDF Download
Introduction to Special Topic Forum multilevel theory. Violina Rindova
Daved Barry
Dave Ketchen
  Academy of Management Review 2009  
Individual Entrepreneurial Intent: Construct Clarification and Development of an Internationally Reliable Metric Edmund R. Thompson Individual entrepreneurial intent is a key construct in research on new business formation. However, neither a clear or consistent definition of nor a uniform and reliable way to measure individual entrepreneurial intent has yet emerged. Several management scholars have highlighted the impediment this constitutes to the advancement of entrepreneurship research. This paper first seeks to clarify the construct of individual entrepreneurial intent and then reports the development and validation of a reliable and internationally applicable individual entrepreneurial intent scale. Entrepreneurship Theory and Practice 2009 PDF Download
HOW ENTREPRENEURSHIP IS EXPERIENCED: THE AFFECTIVE NATURE OF NEW VENTURE CREATION (SUMMARY) Mike Morris
Dave Brannon
minet schindehutte
The experiential nature of entrepreneurship is receiving increased scholarly attention. Kreft and Sobel (2005) characterize venture creation as a trial and error experience, while Sarasvathy (2004) suggests the ability to effectuate outcomes is rooted in ongoing experiences. Politis (2005) argues that entrepreneurial learning results from the manner in which experiences are processed. Shepherd (2008) describes impending venture failure as a grieving experience. Schindehutte and Morris (2003) examine “peak experiences” of entrepreneurs. While entrepreneurship would seem inherently experiential, we know surprisingly little about what it is like to be “in the moment” as a venture takes form. This research argues that entrepreneurial experiences are fundamentally affective in nature, and attempts to uncover their underlying dimensionality. Frontiers of Entrepreneurship Research 2009 PDF Download
Ethics and entrepreneurship Jared Harris
Harry Sapienza
Norman Bowie Norman Bowie
As the study of entrepreneurship and the study of business ethics become increasingly established, the intersection of entrepreneurship and ethics is receiving increasing scholarly attention. In this paper, we review the research connecting ethics and entrepreneurship, classifying the literature into three broad themes; we also identify and integrate the key themes that emerge, and we offer suggestions for future research. We conclude by introducing the articles in this special issue. Journal of Business Venturing 2009 PDF Download
ENTREPRENEURSHIP Conference Symposia Abstracts. effectuation The article presents abstracts on entrepreneurship topics which include academic entrepreneurship in the U.S. and Europe, business model innovation and industry architecture, and entrepreneurial performance in nascent firms. Academy of Management Proceedings 2009 PDF Download
ENTREPRENEURSHIP Conference Paper Abstracts. effectuation The article presents abstracts on entrepreneurship topics which include a longitudinal study of venture capital (VC) decision making, sustainable entrepreneurial firm growth, and a developed framework to explain opportunity formation and new value-emergence in regard to the interface between organizations and institutions. Academy of Management Proceedings 2009  
Entrepreneuring as Emancipation VIOLINA RINDOVA
Daved Barry
Dave Ketchen
We define “entrepreneuring”as efforts to bring about new economic, social, institutional, and cultural environments through the actions of an individual or group of individuals. Thus, we view entrepreneuring as an emancipatory process with broad change potential. This view foregrounds three aspects of entrepreneuring that merit closer attention in future research—seeking autonomy, authoring, and making declarations. We highlight the novel directions for entrepreneurship research suggested by our emancipatory perspective and relate it to the special topic forum articles. Academy of Management Review 2009 PDF Download
Entrepreneurial Optimism in the Market for Technological Inventions Gary Dushnitsky How do potentially optimistic entrepreneurs attract prospective investors? We investigate an entrepreneur’s decision to pursue either disclosure?where investors inspect the invention?or a contingent payment scheme (CPS) offer (e.g., salary deferral, royalty-based license)?where an invention’s value is inferred from the entrepreneur’s willingness to make her pay contingent on the invention’s success. Using a parsimonious model, we highlight the role of optimism and demonstrate that it only affects CPS ex post. As a result, a novel trade-off unfolds ex ante: In choosing an action that maximizes the valuation of the invention, a moderately wealthy entrepreneur weighs optimism discount (affecting CPS) versus imitation discount (affecting disclosure). More broadly, the paper advances a view of entrepreneurs as optimists, thus departing from the prevailing approach, which characterizes entrepreneurs as opportunistic individuals who consciously pursue self-serving goals. Organization Science 2009 PDF Download
Emerging Firms and the Allocation of Control Rights: A Bayesian Approach. Sharon Alvarez
Simon Parker
This paper suggests that founders often use firm formation to exploit opportunities and must sometimes make organizing decisions about the allocation of control before the economic value of the opportunity can reliably be known even probabilistically. Motivated by questions surroundings such settings, we use incomplete contract theory and apply a Bayesian learning model to the allocation process of ownership control rights of founders in emerging firms. This model examines how founders learn and build on their prior beliefs, enabling them to allocate and change ownership control rights under differing conditions of risk and uncertainty. Academy of Management Review 2009 PDF Download
EFFECTUATION IN THE CONTEXT OF R&D PROJECTS: CHARACTERISTICS AND IMPACT ON PROJECT PERFORMANCE. Daniel Kupper
TINA BURKHART
The aim of this study is to adopt a new theoretical concept called effectuation to the R&D project management research. This concept brings in a new perspective on the issue of how to accomplish successful R&D projects by focusing on the decision making in uncertain situations Academy of Management Proceedings 2009 PDF Download
EFFECTUATION & NEWNESS: AN INTERTWINED RELATIONSHIP? (SUMMARY) Christophe Garonne
Per Davidsson
Effectuation theory suggests that entrepreneurs develop their new ventures in an iterative way by selecting possibilities through flexibility and interactions with the market; a focus on affordability of loss rather than maximal return on the capital invested, and the development of pre-commitments and alliances from stakeholders (Sarasvathy, 2001, 2008; Sarasvathy et al., 2005, 2006). As Sarasvathy resumes, “effectuation is a straight inversion of rational choice theory” (Sarasvathy, 2001). However, little is known about the consequences of following either of these two processes. One aspect that remains unclear is the relationship between newness and effectuation. On one hand it can be argued that the combination of a means-centered, interactive and open-minded process should encourage and facilitate the development of innovative solutions. On the other hand, having a close relationship with their “future first customers” and focussing too much on the resources and knowledge already within the firm may be a constraint that is not conducive to innovation, or at least not to a radical innovation. Frontiers of Entrepreneurship Research 2009 PDF Download
Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
In support of theory, this study demonstrates that entrepreneurial experts frame decisions using an “effectual” logic (identify more potential markets, focus more on building the venture as a whole, pay less attention to predictive information, worry more about making do with resources on hand to invest only what they could afford to lose, and emphasize stitching together networks of partnerships); while novices use a “predictive frame” and tend to “go by the textbook.” We asked 27 expert entrepreneurs and 3 7 MBA students to think aloud continuously as they solved typical decision-making problems in creating a new venture. Transcriptions were analyzed using methods from cognitive science. Results showed that expert entrepreneurs framed problems in a dramatically different way than MBA students. Published by Elsevier Inc. Journal of Business Venturing 2009 PDF Download
Dynamic Capabilities and the Role of Managers in Business Strategy and Economic Performance David J Teece
Mie Augier
This paper discusses some developments in the theory of the organizational capabilities of the business enterprise. Antecedents are recognized, and some promising new developments and areas for future research are identified. The role of managers in the economic system is highlighted and discussed within the context of economic and organizational research. Suggestions for future developments of dynamic capability research involve employment of evolutionary and behavioral theories. Organization Science 2009 PDF Download
Discovering social entrepreneurship Trilok Kumar Jain Entrepreneurship has been considered as a factor of risk and reward. However, there are instances of entrepreneurship for social cause, where social well being takes a priority over profit motive. In the present study, the researcher analyses the findings from study of 9 pioneering social organization using semi-structured interviews and discussions. The findings from these studies are presented as propositions and as a model for social entrepreneurship. A model has been proposed which shows the growth and direction of social organizations. The ultimate stage in the growth has been identified as the stage of centre of excellence, where the organization works for promoting other organization, as a role model. It tries to focus on HRD and institution building activities for other organizations and institutions. Factors relating to social entrepreneur have also been studied. Asia Pacific Business Review 2009 PDF Download
DIRECT AND MODERATING EFFECTS OF TOP MANAGEMENT TEAM CHARACTERISTICS ON STRATEGIC ENTREPRENEURIAL BEHAVIOR AND PERFORMANCE OF SMALL ICT VENTURES (SUMMARY) Victor Scholten
Jeroen Hermans
Michaéla Schippers
Entrepreneurship and strategic management are both concerned with growth and wealth creation (Hitt & Ireland, 2000; Hitt, Ireland, Camp & Sexton, 2001). Although both fields have developed largely independently, they both aim at explaining how firms adapt to environmental change and exploit opportunities (Venkatraman and Sarasvathy, 2001). Strategic entrepreneurship reflects both entrepreneurial opportunity-seeking actions and strategic advantage-seeking actions (McGrath and MacMillan, 2000; Hitt and Ireland, 2000). Top management teams (TMT) are critically important for exercising strategic entrepreneurship. They have the final responsibility for selecting the firm’s strategies (Hambrick and Mason, 1984). Particularly in start-up firms, the influence of top management teams on strategic directions and eventually on their firm performance is especially significant (West & Meyer, 1998). Despite scholars recognize the importance of both strategic entrepreneurship and top management team influence in understanding the performance of start-up firms, little empirical work has combined both views. In this paper we examine the relative impact of top management team characteristics on the relationship between strategic entrepreneurial behavior and start-up firm performance. Frontiers of Entrepreneurship Research 2009 PDF Download
Decision Comprehensiveness and Corporate Entrepreneurship: The Moderating Role of Managerial Uncertainty Preferences and Environmental Dynamism Ciaran Heavey
Zeki Simsek
Frank Roche
Aidan Kelly
Although comprehensiveness is considered among the most salient and enduring strategic decision-making characteristics in organizations, its influence on firm behaviour has remained elusive. As a first step, our study builds and tests a model that specifies the influence of comprehensiveness on the firm’s pursuit of corporate entrepreneurship. Our core argument is that while comprehensiveness helps decision-makers gain the knowledge needed to escape the ignorance and overcome doubt associated with this pursuit, this beneficial influence is conditional upon managerial uncertainty preferences, together with the level of dynamism in the external environment. Findings from a large sample study of CEOs from 349 SMEs provide general support for this argument and associated hypotheses. Journal of Management Studies 2009 PDF Download
Constructing Markets and Shaping Boundaries: Entrepreneurial Power in Nascent Fields. Filipe Santos
Kathleen Eisenhardt
We examine how entrepreneurs shape organizational boundaries and construct markets through an inductive, longitudinal study of five ventures. Our central contribution is a framework of how successful entrepreneurs attempt to dominate nascent markets by co-constructing organizational boundaries and market niches using three processes: claiming, demarcating, and controlling a market. We propose that power is the underlying boundary logic and indicate the “soft-power” strategies by which entrepreneurs compete in highly ambiguous markets. Overall, we develop a holistic view of organizational boundaries and offer insights into institutional entrepreneurship and resource dependence theories. Our most important contribution is reinvigorating the study of interorganizational power. Academy of Management Journal 2009 PDF Download
Cognitive Processes of Opportunity Recognition: The Role of Structural Alignment Denis Gregoire
Pamela S. Barr
Dean Shepherd
Substantial gains can be made by individuals and organizations adept at detecting new opportunities. But how do business leaders do that concretely? Organization research shows that managers are more inclined to identify threats than opportunities, but it is still not clear why this is the case. Likewise, research points to several factors that may facilitate the recognition of opportunities. Yet empirical observations have been limited by retrospective biases and other conceptual challenges. As a result, key questions remain not only about what factors facilitate the recognition of opportunities, but also about why these factors play such a role. To further understanding of these issues, we study the reasoning strategies that individuals mobilize for recognizing opportunities. We develop a model of opportunity recognition as a cognitive process of structural alignment, and analyze the think-aloud verbalizations of executive entrepreneurs as they try to recognize opportunities for new technologies. In contrast to prior research, the qualitative and quantitative data do not provide evidence that individuals use prototypes to recognize opportunities. Instead, we find that different kinds of mental connections play different roles in the process of recognizing opportunities, with different consequences. We also document why and how prior knowledge may facilitate this process. By drawing attention to the cognitive underpinnings of opportunity recognition, we cast light on why it constitutes such a challenging task for individuals and organizations. In turn, this provides a useful basis for exploring the factors that explain why some individuals/organizations are able to recognize opportunities that others simply fail to see. Organization Science 2009 PDF Download
Can genetic factors influence the likelihood of engaging in entrepreneurial activity? Nicos Nicolaou
Scott Shane
This article offers an argument for how genetic factors may influence the tendency of people to engage in entrepreneurial activity, and describes four mechanisms through which genetic factors could operate. It also explores ways that researchers can use quantitative and molecular genetics to examine entrepreneurship, and discusses the potential implications of a genetic perspective for management research on entrepreneurship. Journal of Business Venturing 2009 PDF Download
Can cognitive biases explain venture team homophily? Simon Parker Although venture teams whose founders are dissimilar (heterophilious) tend to outperform teams whose founders are similar (homophilious), most new venture teams are characterized by homophily. I try to explain this puzzle with a learning model in which founders are prone to two cognitive biases: overoptimism and self-serving attributions. Founders choose cofounders with similar beliefs as themselves because they expect this to promote the most effective allocation of effort to the venture. Self-serving bias reinforces and perpetuates these beliefs. In principle, informed outsiders (e.g., practitioners or hands on investors) can improve venture team composition compared with private choices by founders. Copyright © 2009 Strategic Management Society. Strategic Entrepreneurship Journal 2009 PDF Download
Bridging the Valley of Death: Lessons Learned From 14 Years of Commercialization of Technology Education Steve H. Barr
TED BAKER
STEPHEN K. MARKHAM
ANGUS I. KINGON
We argue for the increasing importance of providing graduate students with skills in technology entrepreneurship and the commercialization of technology. We describe the lessons we have learned from 14 years of developing commercialization of technology pedagogy and adapting it for use on four continents and within numerous corporations. We demonstrate that the theory-driven approach that we use to shape the curriculum improves our ability to learn from our mistakes and to structure small experiments to improve the curriculum and pedagogy. Academy of Management Learning & Education 2009 PDF Download
Becoming the Boss: Discretion and Postsuccession Success in Family Firms J. Robert Mitchell
Timothy Hart
Sorin Valcea
DAVID M TOWNSEND
Family firms can enjoy substantial longevity. Ironically, however, they are often imperiled by the very process that is essential to this longevity. Using the concept of managerial discretion as a starting point, we use a human agency lens to introduce the construct of successor discretion as a factor that affects the family business succession process. While important in general, successor discretion is positioned as a particularly relevant factor for productively managing organizational renewal in family businesses. This study represents a foundation for future empirical research investigating the role of agency in entrepreneurial action in the family business context, which consequently can contribute to the larger research literature on succession and change. Entrepreneurship Theory and Practice 2009  
Becoming the Boss: Discretion and Postsuccession Success in Family Firms J. Robert Mitchell
Timothy Hart
Sorin Valcea
DAVID M TOWNSEND
Family firms can enjoy substantial longevity. Ironically, however, they are often imperiled by the very process that is essential to this longevity. Using the concept of managerial discretion as a starting point, we use a human agency lens to introduce the construct of successor discretion as a factor that affects the family business succession process. While important in general, successor discretion is positioned as a particularly relevant factor for productively managing organizational renewal in family businesses. This study represents a foundation for future empirical research investigating the role of agency in entrepreneurial action in the family business context, which consequently can contribute to the larger research literature on succession and change. Entrepreneurship Theory and Practice 2009 PDF Download
An investigation of hindsight bias in nascent venture activity. Gavin Cassar
Justin Craig
We posit that individuals who are actively engaged in activities to develop their own venture will exhibit hindsight bias when recalling their startup experiences. We observe that those who fail to develop their startup activity into an operating business demonstrate substantial hindsight bias concerning the probability of venture formation. In particular, the recalled probability of success, reported after their decision to quit, is lower than the probability of success solicited during the nascent process. We argue that the systematic distortion of the past has important implications for individuals involved in the venturing process. Specifically, we suggest that these individuals are at risk of overestimating their chances of success when starting future nascent activity if they do not correct for their optimistic tendencies. The evidence from this study suggests it is important to recognize that what nascent entrepreneurs believe they experienced, and what they actually experienced, may not be equivalent. Journal of Business Venturing 2009 PDF Download
Affordable Loss: Behavioral Economic Aspects of the Plunge Decision Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
Affordable loss involves decision makers estimating what they might be able to put at risk and determining what they are willing to lose in order to follow a course of action. Using the entrepreneur’s new venture plunge decision, this article combines insights from behavioral economics to develop a detailed analysis of the affordable loss heuristic. Specifi cally, we develop propositions to explain how individuals: (1) decide what they can afford to lose; and (2) what they are willing to lose in order to plunge into entrepreneurship. The article also discusses the implications of affordable loss for the economics of strategic entrepreneurship. Strategic Entrepreneurship Journal(sister journal to Strategic Management Journal) 2009 PDF Download
Advancing Strategic Entrepreneurship Research: The Role of Complexity Science in Shifting the Paradigm minet schindehutte
Michael Morris
Five areas are identified wherein more development might enhance the current model of strategic entrepreneurship (SE): exploration–exploitation, opportunity, newness, micro–macro interaction, and dynamics. Complexity science is presented as an alternative theoretical lens for addressing these issues, and enhancing the potential of SE in a world characterized by fluctuations, irreversibility, nonlinearity, and instabilities. Using this lens, a rearticulation of SE is proposed that centers on the notion of an opportunity space and a paradigm built around forms, flows, and functions. SE’s domain consists of a complex set of phenomena that cannot be neatly bundled according to disciplinary boundaries. Entrepreneurship Theory and Practice 2009 PDF Download
A meta-analytic review of effectuation and venture performance Stuart Read
Michael Song
Willem Smit
Though much research in entrepreneurship makes the fundamental assumption that opportunities are found, new work is emerging which questions this core tenet. Effectuation, for example, positions the entrepreneur as co-creator of opportunities, together with committed stakeholders. In this study, we conduct a meta-analysis of the articles published in the Journal of Business Venturing, summarizing data on 9897 new ventures to connect three of the principles of effectuation positively with new venture performance. In so doing, we offer both specific insight into precisely measuring effectuation and a general method for extracting variables from prior work to measure new constructs. Journal of Business Venturing 2009 PDF Download
A Measure of Adaptive Cognition for Entrepreneurship Research. Haynie M
Shepherd Dhliwayo
To sense and adapt to uncertainty may characterize a critical entrepreneurial resource. In this research, we employ a metacognitive lens toward the development of a 36-item inventory designed to assess cognitive adaptability, defined as the ability to be dynamic, flexible, and self-regulating in one’s cognitions given dynamic and uncertain task environments. Construction of the inventory, and subsequent factor analysis, is confirmatory in nature based on five theoretically justified dimensions of metacognition. We describe the development of the instrument, discuss its implications for entrepreneurship, and finally offer suggestions for further development and testing. Entrepreneurship Theory and Practice 2009 PDF Download
A field study of entrepreneurial decision-making and moral imagination McVea John F How entrepreneurs make decisions under extreme uncertainty and ambiguity is central to explaining entrepreneurial success. However, because of their pioneering nature, these decisions also have significant ethical implications. While there has been an increasing focus on the unique approaches entrepreneurs take to decision-making, less attention has been paid to the inherent ethical dimension of making decisions under high uncertainty. This study applies the concept of moral imagination to the challenges of making entrepreneurial decisions under Knightian uncertainty. It examines the extent to which entrepreneurs use moral imagination to integrate the ethical dimensions of pioneering situations into their decision-making. Journal of Business Venturing 2009 PDF Download
2009 BEST PAPER ABSTRACTS. effectuation The article presents abstracts for what the publication deems to have been the best papers of 2009 including “Acquisitions of Industrial Units and the Evolution of Operational Performance Across the Firm,” “Alliances and Governance in Biotechnology: Firm-Level Effects on Performance,” and “Are Joint Ventures Positive Sum Games? Effects of Cooperative and Non-Cooperative Behavior.” Academy of Management Proceedings 2009 PDF Download
WHY LOOK BACK WITH TROUBLE AHEAD? THE IMPACT OF ENVIRONMENTAL FRAMES ON STRATEGIC TRANSITION. Willem Smit
Stuart Read
We investigate whether managers shift from predictive decision-making in a stable environment to strategies which do not rely on historical information when the situation becomes uncertain. Our experiment involving 147 experienced corporate managers suggests that they do exactly the opposite of what theory suggests they should do. Academy of Management Proceedings 2008 PDF Download
TOWARD A LOGIC OF EMERGENCE IN ENTREPRENEURSHIP (SUMMARY) minet schindehutte The impetus for this inquiry comes from increased attention to emergence in the entrepreneurship literature (Lichtenstein, et al., 2007) accompanied by the ontological turn in social theory. It is argued that assumptions regarding structure, agency and causality are under-determined in philosophical approaches such as positivism, interpretivism, social realism and social constructivism (e.g., McMullen and Shepherd, 2006). Specifically, the current dominant perspective in entrepreneurship views the opportunity as an ontologically stable, self-contained and decontextualized entity that is subject to the logic of determinism (an object-based understanding of causality) (Shane and Venkataraman, 2000). In this view transitions from one stage to the next have a distinct beginning- and end-point along a fixed trajectory in a means-ends framework (Casson, 1982) that evolves according to a pre-established final goal (causation) or emergent final goal (effectuation) (Sarasvathy, 2001). Frontiers of Entrepreneurship Research 2008 PDF Download
The Questions We Ask. effectuation A cover design by Stephanie Harden is presented, featuring a photograph of a sculpture. Academy of Management Proceedings 2008 PDF Download
The Fine ‘Science’ of Entrepreneurial Decision-Making Deniz Ucbasaran   Journal of Management Studies 2008 PDF Download
The contrasting interaction effects of improvisational behavior with entrepreneurial self-efficacy on new venture performance and entrepreneur work satisfaction Keith Hmieleski
Andrew Corbett
Although improvisation is often considered to be an elemental component of entrepreneurship, little work has been done to evaluate factors that influence the relationship of entrepreneur improvisational behavior with important outcome variables. In an attempt to partly fill this gap, the current study examines the moderating effect of entrepreneurial self-efficacy on the relationship of founders’ improvisational behavior with both the performance of their startups and their individual level of work satisfaction using a national (United States) random sample of 159 entrepreneurs. In alignment with our predictions, improvisational behavior was found to have a positive relationship with new venture performance (i.e., sales growth) when exhibited by founders who were high in entrepreneurial self-efficacy, whereas improvisational behavior was found to have a negative relationship with new venture performance when exhibited by founders who were low in entrepreneurial self-efficacy. Contrary to our expectations, entrepreneurial self-efficacy was found to have a negative moderating effect on the relationship between entrepreneur improvisational behavior and work satisfaction. Journal of Business Venturing 2008  
Strategy making, novelty and analogical reasoning – commentary on Gavetti, Levinthal, and Rivkin (2005). Moshe Farjoun This commentary responds to and builds upon a recent article about the role of analogical reasoning in strategy making (Gavetti, Levinthal, and Rivkin, 2005). Based on conceptual and formal analysis, the authors state that in complex and novel contexts, analogical reasoning may be superior to two established models: rational choice and local incremental search. I show that given an alternative conceptualization of the strategy-making context and main models, analogical reasoning is not necessarily superior. Furthermore, in novel and complex contexts, this model and other approaches such as mental experimentation can play a larger role, particularly in inventing effective strategies. I further extend the analysis by considering some boundary conditions in which analogical reasoning and its alternatives best apply, exploring the idea that blending and adapting several search strategies may be more effective than using only one method, such as analogical reasoning, and advancing new directions for empirical research. Copyright © 2008 John Wiley & Sons, Ltd. Strategic Management Journal 2008 PDF Download
Separated by a Common Language? Entrepreneurship Research Across the Atlantic Candida Brush
Tatiana Manolova
LINDA F EDELMAN
While recent inventories and assessments of the entrepreneurship field examine the focus, purpose, and methods, one area receiving less attention is the outcome or dependent variable. The outcome variable is of critical importance in scholarship, as it is a leading indicator of the cumulative nature of the scholarship in our field. This paper reviews 389 articles published over the past 3 years in four top entrepreneurship journals; two published in the United States and two published in Europe. It classifies the scholarship by theoretical underpinnings, independent variables, dependent variables, and then looks at the variation in these by origin of the journal. Results indicate that entrepreneurship researchers are using a wide variety of dependent variables, that the most popular unit of analysis is the firm, and that performance, broadly defined, is the most popular dependent variable. Implications for future research are discussed. Entrepreneurship Theory and Practice 2008 PDF Download
Selected variation: the population-level implications of multistage selection in entrepreneurship JONATHAN T ECKHARDT
MICHAEL P. CIUCHTA
This article examines the population level implications of microlevel theories of entrepreneurship. The actions of those who seek to organize opportunities, as well as the hurdles that they must overcome to successfully exploit them, give rise to an evolutionary multistage selection process. The article indicates that the consideration of selection events leads to a more complete understanding of the entrepreneurial process and how microlevel theories influence important outcomes in entrepreneurship. Other theoretical and empirical implications of staged selection for research in entrepreneurship are discussed. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
Regulatory focus and new venture performance: A study of entrepreneurial opportunity exploitation under conditions of risk versus uncertainty Keith Hmieleski
Baron, Robert A.
Research on cognitive fit suggests that entrepreneurs will be most successful at leading their firms when approaching the entrepreneurial process through the self-regulatory mode that most closely matches the requirements of their environment and its accompanying perspective on the nature of entrepreneurial opportunities. Consistent with the discovery view of entrepreneurial opportunities, it is suggested that a prevention focus will be the most effective self-regulatory mode for entrepreneurs leading their firms within stable industry environments, which are characterized by risk. Building from the creation view of entrepreneurial opportunities, it is argued that a promotion focus will be the most effective self-regulatory mode for entrepreneurs leading their firms within dynamic industry environments, which are characterized by uncertainty. These arguments are tested using a national (United States) random sample of 201 lead entrepreneurs. The findings indicate that in dynamic environments, entrepreneurs’ promotion focus is positively associated with venture performance (i.e., lagged measures of revenue and employment growth), while entrepreneurs’ prevention focus is negatively related to performance in such environments. In both cases, these effects are found to be fully mediated by deviation from firms’ original business concepts. In stable environments, however, no significant relationships between entrepreneurs’ promotion or prevention focus and new venture performance were observed. These results suggest that low cognitive fit (a mismatch between entrepreneurs’ mode of self-regulation and the decision-making context in which they operate) is more damaging in dynamic environments (i.e., a context of uncertainty) than in stable environments (i.e., a context of risk). Copyright © 2009 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
Properties of emerging organizations: An empirical test. Candida Brush
Tatiana Manolova
The process of new venture creation is central to the field of entrepreneurship. The effects of initial organizing have a direct influence on survival, yet empirical examination of the dimensions of emergent organizations is limited. Using longitudinal data on nascent entrepreneurs, this paper empirically tests four properties of emerging organizations-intentionality, resources, boundary and exchange- and their effect on likelihood of continued organizing [Katz, J., Gartner, W.B., 1988. Properties of emerging organizations. Academy of Management Review 13(3), 429–441]. Our results suggest that all four properties are necessary for firm survival in the short-term and those firms that organize more slowly are more likely to continue to organize. Further, nascent ventures in which intentionality preceded the other organizing properties were not significantly more likely to continue in the organizing effort. Our results suggest an extension of the original Katz and Gartner [Katz, J., Gartner, W.B., 1988. Properties of emerging organizations. Academy of Management Review 13(3), 429–441] framework. Journal of Business Venturing 2008  
Perceived Institutional Ambiguity and the Choice of Organizational Form in Social Entrepreneurial Ventures. David Townsend
Timothy Hart
Social entrepreneurship (SE) is emerging as a common approach to meeting social needs. However, SE founders appear to be organizing under both for-profit and nonprofit organizational forms to engage in essentially the same activities. We investigate this lack of consistency regarding the choice of organizational form by examining two possible explanations: a difference in motivational goals among social entrepreneurs or perceived ambiguity regarding trends in core dimensions of the institutional environment. Overall, we argue that founder perceptions of an ambiguous institutional environment are leading to the variance in choice of organizational form for SE ventures. Both theoretical and practical directions for future research are discussed as well. Entrepreneurship Theory and Practice 2008 PDF Download
Outlines of a behavioral theory of the entrepreneurial firm Saras Sarasvathy
Nick Dew
Rob Wiltbank
Stuart Read
In A Behavioral Theory of the Firm (BTF), Cyert and March [Cyert, R.M., March, J.G., 1963. A Behavioral Theory of the Firm. Prentice-Hall, Englewood Cliffs, NJ] present a clutch of ideas for explaining the behavior of established firms within an environment of well-defined markets, stakeholder relationships, technologies, and so on. In this paper, we outline a behavioral theory of the entrepreneurial firm that emphasizes transforming environments rather than acting within extant ones. In particular, we explicate three ideas that parallel key concepts in BTF: (1) accumulating stakeholder commitments under goal ambiguity (in line with a political conception of goals), (2) achieving control (as opposed to managing expectations) through non-predictive strategies, and (3) predominately exaptive (rather than adaptive) orientation. (c) 2008 Elsevier B.V. All rights reserved. Journal of Economic Behavior and Organization 2008 PDF Download
Opportunity discovery, entrepreneurial action, and economic organization Peter G. Klein This article reviews and critiques the opportunity discovery approach to entrepreneurship and argues that entrepreneurship can be more thoroughly grounded, and more closely linked to more general problems of economic organization by adopting the Cantillon-Knight-Mises understanding of entrepreneurship as judgment. The article begins by distinguishing among occupational, structural, and functional approaches to entrepreneurship and distinguishing among two influential interpretations of the entrepreneurial function—discovery and judgment. It turns next to the contemporary literature on opportunity identification and argues that this literature misinterprets Kirzner’s instrumental use of the discovery metaphor and mistakenly makes opportunities the unit of analysis. The article then describes an alternative approach in which investment is the unit of analysis and link this approach to Austrian capital theory. I close with some applications to organizational form and entrepreneurial teams. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
Opportunity discovery, entrepreneurial action, and economic organization Peter G. Klein This article reviews and critiques the opportunity discovery approach to entrepreneurship and argues that entrepreneurship can be more thoroughly grounded, and more closely linked to more general problems of economic organization by adopting the Cantillon-Knight-Mises understanding of entrepreneurship as judgment. The article begins by distinguishing among occupational, structural, and functional approaches to entrepreneurship and distinguishing among two influential interpretations of the entrepreneurial function—discovery and judgment. It turns next to the contemporary literature on opportunity identification and argues that this literature misinterprets Kirzner’s instrumental use of the discovery metaphor and mistakenly makes opportunities the unit of analysis. The article then describes an alternative approach in which investment is the unit of analysis and link this approach to Austrian capital theory. I close with some applications to organizational form and entrepreneurial teams. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2008  
Opportunities, organizations, and entrepreneurship Sharon Alvarez
Jay Barney
  Strategic Entrepreneurship Journal 2008 PDF Download
On Lachmannian and Effectual Entrepreneurship: A Rejoinder to Sarasvathy and Dew (2008) Todd Chiles
V K Gupta
Bluedorn, A. C.
We welcome the comments of Professors Sarasvathy and Dew (2008) on our recent article, which introduced a new paradigm for entrepreneurship research based on one of the central figures in modern Austrian economics: Ludwig Lachmann (Chiles et al. 2007). Our purpose in writing the article was (1) to bring together a wide range of disparate entrepreneurship concepts under a sin- gle new conceptual framework,2 and (2) to provide greater coherence and theo- retical underpinnings to entrepreneurship research. In doing so, we described connections between a Lachmannian approach to entrepreneurship and numer- ous extant approaches, including effectuation. Sarasvathy and Dew (hereafter, S&D), in taking issue with some of our interpretations of effectuation, clarified their previous work on this approach and explicated its primary foundations. We find S&D’s discussion of the problems of knowledge, resources, and institutions provocative, and their conclusion about the basis of effectuation revealing. Our response to these arguments attempts to further clarify areas of possible confusion and suggests that the Lachmannian and effectuation approaches may share more common ground than S&D realize in some areas and less than we thought in others. In our brief response, we do not attempt to critique every point S&D make, but instead focus on what we view as their fun- damental arguments. Organization Studies 2008 PDF Download
Nordic Entrepreneurship Research. Daniel Hjorth This article describes and discusses Nordic entrepreneurship research (NER). It does so by providing a broader context for conducting entrepreneurship research, including historical, sociocultural, and disciplinary elements substantiating an understanding of “Nordic.” Contextualizing NER this way, we attempt for the article to do what it says, i.e., to also write here in a style we argue is characteristically Nordic. This includes a priority to the local and particular, and a subsequent focus on questions resonant with nominalist research. We thereby enable an experience of NER as a cultural practice, as we argue that this is a crucial part of understanding what it is. Drawing on a tracing of NER in journal publications (in between 2001 and 2005), the article identifies trends and tendencies. We identify three generations of entrepreneurship research and suggest directions for the future development of the third. This way, the discussion and conclusions are drawn toward images of what a Nordic entrepreneurship research might become. Entrepreneurship Theory and Practice 2008 PDF Download
Niche construction: The process of opportunity creation in the environment PAVEL LUKSHA This article contributes to the emerging theory of opportunity creation by examining how organizations (including entrepreneurial ones) create and transform their niches. Using insights from contemporary evolutionary theory, the article classifies types of niche construction activities along dimensions of governance and the nature of the strategic actor. It then focuses on mechanisms of niche construction governed by the focal organization or entrepreneur to explain how competitive imperfections can be induced within industries and markets. The central role of communicative strategies in niche construction is emphasized. Copyright © 2009 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
LEARNING FROM TECHNOLOGY ENTREPRENEURS: EFFECTUATION AS A NEW TOOLBOX IN CONTEXTS OF HIGH UNCERTAINTY (SUMMARY) René Mauer
Malte Brettel
Adopting a process view on technology entrepreneurship, we examine ways of approaching uncertainty in the early-stage technology venturing process. A recent study on university R&D expenditures and new business formations provided us with results confirming once again a positive economic impact of technology-based entrepreneurial activity in terms of the creation of new firms, employment and change (Kirchhoff, Newbert, Hasan, & Armington, 2007). On the other hand, German policy makers worry about a decreasing number of technology-based companies due to a strong job market for technology experts and perceived high levels of uncertainty by the would-be entrepreneurs (Niefert, Metzger, Heger, & Licht, 2006). As there have been only very few empirical studies on the early stage of technology-based entrepreneurship, this study uses qualitative methodology to research in the given context the types of uncertainty and the ways to approach it, differentiating between causal and effectual ones (Sarasvathy, 2005). Frontiers of Entrepreneurship Research 2008 PDF Download
Is effectuation Lachmannian? A response to Chiles, Bluedorn, and Gupta (2007) Saras Sarasvathy
Nick Dew
In an excellent recent paper on Ludwig Lachmann’s contributions to entrepreneurship, Chiles, Bluedorn and Gupta draw parallels between Lachmann’s work and later contributions in the entrepreneurship literature, including Sarasvathy (2001), suggesting that, ‘Sarasvathy’s economic approach to entrepreneurship is decidedly Lachmannian’ (Chiles et al. 2007: 487). Our purpose in responding to the Chiles et al. article is twofold. First, our interpretation about how effectuation works differs in certain ways from the interpretations placed on it by these authors; we therefore wish to clarify our views on these matters. Second, we view the relationship between effectuation and Lachmann’s perspective on entrepreneurship somewhat differently than Chiles et al.; in this note we lay out this alternative view. The crux of our presentation is that, although Lachmann and Sarasvathy have much the same starting point (entrepreneurial action in the face of true uncertainty) and several overlaps in terms of the overall implications for dominant economic theories, there are crucial differences that draw upon recent developments in our understanding of how the human mind works and what knowledge is constituted of. In particular, there are at least three areas of possible conceptual confusion: The problem of knowledge — or What do we take as impossible? Strategies. The problem of resources — or What do we take as given? Players. The problem of institutions — or What do we take as outside our control? Rules. Organization Studies 2008 PDF Download
Is effectuation Lachmannian? A response to Chiles et al. Saras Sarasvathy
Nick Dew
  Organization Studies 2008  
Introduction to the special issue: Organization studies as a science for design: Creating collaborative artifacts and research Mariann Jelinek
Georges Romme
Richard J Boland
Organization research has recently started to reach beyond the antagonisms of positivism versus its postmodernist and critical counterparts, which have dominated the discourse in organization studies over the last 20 years. A promising approach instead involves positioning organization studies as a science for design. While the natural sciences seek description, explanation or prediction of what is, design scientists ask what could be, seeking betterment of the human condition. Inspired by Simon’s (1969) The Sciences of the Artificial, an organization science for design seriously addresses the need for scholars and managers alike for better organizational forms and processes. Organization design science is still very early in its development: different, even conflicting theories about organization design and development abound; laboratories for organizational experiments are largely absent; and little knowledge on management and organization is systematically codified — too much remains anecdotal and dependent on context. As a result, the current state of a science for organization design is fragmented and immature. Previous academic research on organization design focussed primarily on questions of theoretical relevance. A science-for-design perspective differs from previous treatments of organization design in two ways. First, it can bridge the worlds of theoretical and practical significance. Without theory, organizational practice is uninformed; without practice, organization theory is moribund. Second, the enormous diversity in organization research and theory is merely confusing without an adequate epistemology, particularly in view of the need to connect to practice. A design science approach can facilitate an integrative framework that acknowledges the unique role and contribution of key epistemological traditions in organization studies (including positivism, constructivism and pragmatism). The call for papers for this Special Issue invited submissions from scholars who view organization and management research as a pluralist discipline that draws on (at least) two key modes of engaging in research: science and design. According to Simon (1969), science views existing organizational systems as empirical objects from an outsider perspective, while design envisions systems that do not yet exist — either completely new systems or new states of existing systems. Science raises the question ‘is this proposition valid or true?’, while article title Organization Studies 29(03): 317–329 ISSN 0170–8406 Copyright © 2008 SAGE Publications (Los Angeles, London, New Delhi and Singapore) Mariann Jelinek College of William & Mary, Virginia, USA A. Georges L. Romme Eindhoven University of Technology, The Netherlands Richard J. Boland Case Western Reserve University, Ohio, USA www.egosnet.org/os DOI: 10.1177/0170840607088016 design asks ‘will it work better?’ Simon foresaw that a design science approach could help overcome the isolation of specialists by providing a common ground for bringing our diverse interests together in a search for more desirable states of (organizational) affairs. This Special Issue is therefore dedicated to exploring the interface between organization science and design. As such, it extends and fundamentally differs from previous work, for example published in the special issue on organization design in Organization Science (Dunbar and Starbuck 2006) as well as the special issue on organization development in the Journal of Applied Behavioral Science (Bate 2007).   2008 PDF Download
Inside opportunity formation: enterprise failure, cognition, and the creation of opportunities Ronald Mitchell
J. Robert Mitchell
Brock Smith
To better understand opportunity creation, we investigate the extent to which recognition of failure impacts the new transaction commitment mindset of entrepreneurs. In a PLS model, we utilize data gathered from a sample of 220 entrepreneurs, and augment these results with an ANOVA analysis that provides a deeper exploration of the theory. In this article, we: (1) elaborate on the critical dimensions that represent a multi-construct view of the new transaction commitment mindset and describe ways that these dimensions can be measured; (2) examine the extent to which the recognition of new venture failure impacts the new transaction commitment mindset; and (3) explore the implications of the interaction between failure recognition and the new transaction commitment mindset for an entrepreneur’s decision to continue or abandon opportunity creation efforts. Our results suggest that recognition of failure does indeed impact the new transaction commitment mindset and, by extension, can enable opportunity creation. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2008  
Inside opportunity formation: enterprise failure, cognition, and the creation of opportunities Ronald Mitchell
J. Robert Mitchell
Brock Smith
To better understand opportunity creation, we investigate the extent to which recognition of failure impacts the new transaction commitment mindset of entrepreneurs. In a PLS model, we utilize data gathered from a sample of 220 entrepreneurs, and augment these results with an ANOVA analysis that provides a deeper exploration of the theory. In this article, we: (1) elaborate on the critical dimensions that represent a multi-construct view of the new transaction commitment mindset and describe ways that these dimensions can be measured; (2) examine the extent to which the recognition of new venture failure impacts the new transaction commitment mindset; and (3) explore the implications of the interaction between failure recognition and the new transaction commitment mindset for an entrepreneur’s decision to continue or abandon opportunity creation efforts. Our results suggest that recognition of failure does indeed impact the new transaction commitment mindset and, by extension, can enable opportunity creation. Copyright © 2008 Strategic Management Society. Strategic Management Journal 2008 PDF Download
Immortal Firms in Mortal Markets? An Entrepreneurial Perspective on the Innovator’s Dilemma. Saras Sarasvathy
Nick Dew
Stuart Read
Rob Wiltbank
“The Innovators’ Dilemma” consists in the fact that by doing the right thing – i.e., listening to current customers, leading firms often end up losing their markets to upstart newcomers. Therefore, understanding how entrepreneurs successfully create such upstart firms and new markets ought to have direct implications for strategic management theorizing about this dilemma. This paper examines such implications of some recent developments in entrepreneurship and outlines how effectual reasoning may be used to overcome the innovators’ dilemma in large corporations. The paper also identifies new questions for future research in the overlap between strategic management and entrepreneurship. European Journal of Innovation Management 2008 PDF Download
Globalization of social entrepreneurship opportunities Shaker A. Zahra
Hans Rawhouser
NACHIKET BHAWE
DONALD O. NEUBAUM
James Hayton
Social entrepreneurship has emerged as an important research topic in the literature. This interest stems from social entrepreneurs’ role in addressing serious social problems on a worldwide scale while enhancing social wealth, often without regard for profits. In this article, we explain the forces contributing to the formation and rapid internationalization of social ventures. We use the behavioral theory of the firm to distill key attributes of social opportunities and show how these attributes influence the timing and geographic scope of social ventures’ international operations. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
Factor payments, resource-based bargaining, and the creation of firm wealth in technology-based ventures DAVID M TOWNSEND
Lowell Busenitz
A central tenet of resource-based logic is that undervalued resources utilized by firms organized to exploit them will produce superior economic performance over the long run. Yet when young technology-based ventures pursuing new opportunities do not possess full property over these resources, input providers retain the right to bid up factor prices to match each resource’s marginal productivity. In response to these limitations in extant resource-based logic, we apply and extend Lippman and Rumelt’s full payments and bargaining perspectives and propose an alternative method by which entrepreneurs can generate firm wealth through the unique bundling of cospecialized resources. Both theoretical implications and directions for future research are discussed as well. Copyright © 2009 Strategic Management Society. Strategic Management Journal 2008 PDF Download
Environmental Perceptions and Scanning in the United States and India: Convergence in Entrepreneurial Information Seeking? Wayne Stewart
Ruth May
Arvind Kalia
Drawing on institutional theory and entrepreneurial cognition, we test the environmental perception-scanning framework in the United States and India. The results suggest that culture and transition context help explain scanning frequency, but entrepreneurs in the two countries are similar in their perceptions of strategic uncertainty in environmental sectors. Moreover, the perceptions of increased environmental change and sector importance, as conditioned by perceived information accessibility, are associated with increased scanning. Overall, our results provide important indications about perceptions and information seeking, and lend support to indications of a universal mindset of entrepreneurship. Entrepreneurship Theory and Practice 2008 PDF Download
Entrepreneurship, subjectivism, and the resource-based view: toward a new synthesis NICOLAI J FOSS
Peter G. Klein
YASEMIN Y KOR
Joseph T. Mahoney
This article maintains that the consistent application of subjectivism helps reconcile contemporary entrepreneurship theory with the strategic management literature, particularly the resource-based view of the firm. The article synthesizes theoretical insights from Austrian economics, Penrose’s (1959) resources approach, and modern resource-based theory, focusing on the essential subjectivity of the entrepreneurial process. This new synthesis describes entrepreneurship as a creative team act in which heterogeneous managerial mental models interact to create and arrange resources to produce a collective output that is creatively superior to individual output. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
Entrepreneurship Research in Germany. Jurgen Schmude
Friederike Welter
Stefan Heumann
This article explores entrepreneurship research in Germany, paying particular attention to its origins and current “re-emergence.” Since the late 1990s, the field has gained ground, as is reflected in an increasing number of entrepreneurship chairs at universities, and the establishment of an annual national entrepreneurship conference. A particular strength of the German approach to researching entrepreneurship, which can be traced back directly to the historical roots, is found to be its consideration of context specificity and embeddedness, going hand-in-hand with a strong multidisciplinary tendency. These are two features where entrepreneurship research in Germany could add a distinctive flavor to the current mainstream debate. In practice, the diffusion of this perspective is inhibited by an insufficient exchange with the international scientific community. Entrepreneurship Theory and Practice 2008 PDF Download
ENTREPRENEURSHIP Conference Paper Abstracts. effectuation The article presents abstracts on the field of entrepreneurship which includes a behavioral model of venture capital firms’ risk taking, social entrepreneurship’s application to internationalization from a behavioral view, and a longitudinal analysis of business planning and performance. Academy of Management Proceedings 2008  
Entrepreneurs’ Social Skills and New Venture Performance: Mediating Mechanisms and Cultural Generality Jintong Tang
Baron Robert A
This research seeks to extend previous findings concerning the relationship between entrepreneurs’ social skills and new venture performance. Two potential mediators of such effects (entrepreneurs’ success in obtaining information and essential resources) were investigated, and data were collected in a culture not included in previous studies (China). Results indicate that several social skills (e.g., social perception, expressiveness) are significantly related to measures of new venture performance and that these effects are indeed mediated by the two proposed mediating variables. Implications of these findings for efforts to understand how micro-level variables influence macro-level measures of new venture performance are discussed. Journal of Management 2008 PDF Download
ENTREPRENEURIAL ACTION: EXPLOITATION DECISIONS UNDER CONDITIONS OF UNCERTAINTY. Alexander McKelvie
VERONICA GUSTAFSSON
Michael Haynie
We explore opportunity exploitation decisions made under varying conditions of uncertainty. We conceptualize uncertainty as a multidimensional construct, and employ conjoint analysis to understand entrepreneurs’ likelihood of exploiting an opportunity by going forward with a new product launch given varying combinations of state, effect, and response uncertainty. Academy of Management Proceedings 2008 PDF Download
Entrepreneur behaviors, opportunity recognition, and the origins of innovative ventures JEFFREY H. DYER
HAL B GREGERSEN
CLAYTON CHRISTENSEN
This study traces the origins of innovative strategies by examining the attributes of ‘innovative entrepreneurs.’ In an inductive grounded theory study of innovative entrepreneurs, we develop a theory that innovative entrepreneurs differ from executives on four behavioral patterns through which they acquire information: (1) questioning; (2) observing; (3) experimenting; and (4) idea networking. We develop operational measures of each of these behaviors and find significant differences between innovative entrepreneurs and executives in a large sample survey of 72 successful and unsuccessful innovative entrepreneurs and 310 executives. Drawing on network theory, we develop a theory of entrepreneurial opportunity recognition that explains why these behaviors increase the probability of generating an idea for an innovative venture. We contend that one’s ability to generate novel ideas for innovative new businesses is a function of one’s behaviors that trigger cognitive processes to produce novel business ideas. We also posit that innovative entrepreneurs are less susceptible to the status quo bias and engage in these information-seeking behaviors with a motivation to change the status quo. Copyright © 2009 Strategic Management Society. Strategic Entrepreneurship Journal 2008 PDF Download
Effectuation: Elements of Entrepreneurial Expertise. Saras Sarasvathy   Academy of Management) 2008  
Effectuation and Over-Trust: Response to Sarasvathy and Dew. Ranjan Karri
Sanjay Goel
In their response to our article, Sarasvathy and Dew (S&D) agree with us that effectuation supposes over-trust and yet claim that trust is irrelevant to an effectual entrepreneur. They further claim that our approach to entrepreneurship is trait based. We respond to these comments by pointing out the more subtle ways in which entrepreneurs deal with trust. In addition, while acknowledging the utility (and limitations) of a trait-based approach in advancing entrepreneurship theory, we refute their assertions that our paper is based on this approach. Finally, we address the “alternate” behavioral assumptions that S&D advance. Independent of the merit of these alternate assumptions, they are not contradicted in our article. We believe that these assumptions need to be developed further to contribute to a debate on their merits for advancing theory building in entrepreneurship. Entrepreneurship Theory and Practice 2008 PDF Download
Effectuation and over-trust: Debating Goel and Karri Saras Sarasvathy
Nick Dew
In their article on entrepreneurship, effectuation, and over-trust, Goel and Karri suggest relationships between effectuation, over-trust, and certain psychological characteristics of entrepreneurs. In this response we debate their article. Goel and Karri are correct in claiming that effectuation supposes over-trust. However, we argue that effectual logic works in a different way than they presented because it neither predicts nor assumes trust. Goel and Karri’s article also draws attention to the behavioral assumptions underlying constructs such as over-(under) trust. Our suggestion is that effectuation is based on alternative behavioral assumptions that open up interesting avenues for future research in entrepreneurship. Entrepreneurship Theory and Practice 2008 PDF Download
Different Truths in Different Worlds Kent D Miller
Shu-Jou Lin
Models of organizational learning typically assume that organizations rely upon performance feedback and that an exogenous (uncontrollable) environment presents the problems that organizations seek to solve. By contrast, we consider how different epistemologies within organizations, or combinations of epistemologies, and the degree to which the environment is amenable to organizational control jointly affect learning over time. This study presents three different epistemologies expressed in interpersonal learning: pragmatism (learning beliefs from better performers), coherentism (learning beliefs that fit together), and conformism (adopting beliefs that are popular). We also examine the learning implications of a dominant coalition that can promulgate its preferred beliefs throughout an organization. Outcomes from our agent-based model point toward key epistemological and environmental contingencies affecting the dynamics of organizational learning. Organizations filled with pragmatists learn effectively if the environment is fixed or controllable. Coherentists and conformists advance in knowledge only to the extent that they can control the environment. Adding pragmatists to organizations with coherentists or conformists produces a nonlinear (S-shaped) effect on knowledge achieved as different proportions of pragmatists alter social networks. Models involving learning from a dominant coalition affirm March’s trade-off between learning speed and eventual knowledge achieved only for organizations filled with pragmatists and operating in an uncontrollable environment. Organization Science 2008 PDF Download
Designing Organizations that Design Environments: Lessons from Entrepreneurial Expertise Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
Entrepreneurship has traditionally been viewed as an individual characteristic. Besides investigating personality traits and attributes, studies have examined gender differences (Carter, Gartner, Shaver, & J., 2003), risk aversion (Miner, Smith, & Bracker, 1994) and even sociopathy as possible traits or characteristics of entrepreneurs (Winslow & Solomon, 1987). Unfortunately, these efforts have returned little more than inconclusive results on what defines an entrepreneur and sustains him or her through a continuing career in entrepreneurship. But recently, there is a move to study entrepreneurship as expertise – i.e., a set of skills, models and processes that can be acquired with time and deliberate practice. Take for example, Mitchell (1997) that sought to understand the nature of entrepreneurial expertise in management; or, Reuber & Fischer (1994) that showed an empirical relationship between entrepreneurial expertise and firm performance. Expertise has traditionally been studied in cognitive science using protocol analysis (Ericsson & Simon, 1993). This method consists of having experts solve typical problems from their domain of expertise while continuously thinking aloud. The think-aloud protocols are usually recorded on tape and the contents of the transcribed protocols are analyzed in order to extract the baseline models used by the expert. Sarasvathy (1998) used this time-tested method on a subject pool consisting of 27 founders of companies ranging in size from $200 million to $6.5 billion to induce a baseline model of entrepreneurial expertise called “effectuation.” Organization Studies 2008 PDF Download
ALL ACADEMY SYMPOSIA Conference Symposia Abstracts. effectuation The article presents abstracts on management topics which include hidden conflicts in organizations, market formation and international management. Academy of Management Proceedings 2008 PDF Download
What Lies Beneath? The Experiential Essence of Entrepreneurial Thinking Norris F. Krueger Cognitive developmental psychology and constructivism offer possibilities for the future of entrepreneurial cognition research to explore: (1) deeply seated beliefs and belief structures that ultimately anchor entrepreneurial thinking and (2) how they change as entrepreneurs move toward a more professional, expert mind-set. Such insights aid the field in identifying those developmental experiences that are the sources of those critical deep beliefs intrinsic to our mental models regarding entrepreneurship. As a field, entrepreneurship is lauded for the effectiveness of its teaching, and this essay offers strong theory to explain that our pedagogical best practices reflect important, well-known cognitive phenomena. Entrepreneurship Theory and Practice 2007 PDF Download
Vive La Resitance: Competing Logics and the Consolidation of US Community Banking. Christopher Marquis
Michael Lounsbury
We investigate how competing logics facilitate resistance to institutional change, focusing on banking professionals’ resistance to large, national banks’ acquisitions of smaller, local banks. Acquisitions led to new bank foundings, particularly when out-of-town banks were the acquirers and a community’s local population of bank professionals was large. We argue that the national banks’ efforts to introduce a banking logic emphasizing efficiencies of geographic diversification triggered new forms of professional entrepreneurialism intended to preserve a community logic of banking. Contributions to a synthesis of ecological and institutional perspectives and to research on entrepreneurship and resistance to institutional change are discussed. Academy of Management Journal 2007 PDF Download
Toward a theory of sustainable entrepreneurship: Reducing environmental degradation through entrepreneurial action Thomas J. Dean
Jeffery McMullen
This article explains how entrepreneurship can help resolve the environmental problems of global socio-economic systems. Environmental economics concludes that environmental degradation results from the failure of markets, whereas the entrepreneurship literature argues that opportunities are inherent in market failure. A synthesis of these literatures suggests that environmentally relevant market failures represent opportunities for achieving profitability while simultaneously reducing environmentally degrading economic behaviors. It also implies conceptualizations of sustainable and environmental entrepreneurship which detail how entrepreneurs seize the opportunities that are inherent in environmentally relevant market failures. Finally, the article examines the ability of the proposed theoretical framework to transcend its environmental context and provide insight into expanding the domain of the study of entrepreneurship. Journal of Business Venturing 2007 PDF Download
The Theory of Knowledge Spillover Entrepreneurship* Audretsch, David B.
Max Keilbach
abstract The prevailing theories of entrepreneurship have typically revolved around the ability of individuals to recognize opportunities and then to act on them by starting a new venture. This has generated a literature asking why entrepreneurial behaviour varies across individuals with different characteristics while implicitly holding constant the external context in which the individual finds herself. Thus, where the opportunities come from, or the source of entrepreneurial opportunities, is also implicitly taken as given. By contrast, in this paper an important source of entrepreneurial opportunities is identified – knowledge and ideas created in an incumbent organization. By commercializing knowledge that otherwise would remain uncommercialized through the start-up of a new venture, entrepreneurship serves as a conduit of knowledge spillovers. According to the theory of knowledge spillover entrepreneurship, a context with more knowledge will generate more entrepreneurial opportunities. By contrast, a context with less knowledge will generate fewer entrepreneurial opportunities. Based on a data set linking entrepreneurship to the knowledge context, empirical evidence is provided that is consistent with the proposition that entrepreneurial opportunities are not exogenous but rather systematically created by investments in knowledge by incumbent organizations. Journal of Management Studies 2007 PDF Download
The moral space in entrepreneurship: an exploration of ethical imperatives and the moral legitimacy of being enterprising ALISTAIR R. ANDERSON
ROBERT SMITH
This paper explores the morality associated with entrepreneurship. It has been argued that there is no moral space in entrepreneurship, but such instrumental views may miss out much of the nature of enterprise and how it is understood. Consequently we propose that a socially-constructed perspective, based upon the meanings of entrepreneurship, may help to understand the morality of entrepreneurship. By applying such a lens, we find that the narratives and discourses of the meanings of entrepreneurship are ideological and clearly present a moral space. This space lies between the individual and society and is normatively articulated in entrepreneurial discourses. We develop a tentative framework which links values and outcomes that shows how ?authenticated? entrepreneurship, that is to say that which resonates with a socially approved moral dimension, is legitimized by comparisons with the socially constructed view. The empirical part of the paper comprises of two case stories. The first is a local garage owner who has a reputation as a decent man; the second is a notorious, but entrepreneurial London gangster. Our analysis shows that to be judged ?entrepreneurial?, it is not enough to act entrepreneurially; the social constructs of public perceptions entail examining both moral means and moral ends. We conclude that there is a moral imperative in entrepreneurship. Entrepreneurship & Regional Development 2007 PDF Download
The formation of opportunity beliefs: overcoming ignorance and reducing doubt Dean Shepherd
Jeffery McMullen
P. Devereaux (Dev) Jennings
Although (opportunity) beliefs are becoming increasingly recognized as fundamental to understanding entrepreneurial cognition and strategic action, little is understood about the mechanisms that are responsible for the formation and evolution of these beliefs. Introducing the mechanisms of gists, matching, and updating from philosophy’s and psychology’s coherence theory, we propose a theoretical framework to explain how third-person opportunity beliefs (beliefs that one has recognized an opportunity for someone with the right knowledge and motivation) are formed and how they evolve to become first-person opportunity beliefs (beliefs that one has recognized an opportunity for himself or herself). We conclude by examining how the model contributes to literatures ranging from entrepreneurial cognition and action, to strategic myopia and organizational attention, to opportunity recognition, discovery, and creation. Copyright © 2007 Strategic Management Society. Strategic Entrepreneurship Journal 2007 PDF Download
The Entrepreneurial Organization of Heterogeneous Capital* Kirsten Foss
NICOLAI J FOSS
Peter G. Klein
Sandra K. Klein
abstract Transaction cost, property rights, and resource-based approaches to the firm assume that assets, both tangible and intangible, are heterogeneous. Arranging these assets to minimize contractual hazards, to provide efficient investment incentives, or to exploit competitive advantage is conceived as the prime task of economic organization. None of these approaches, however, is based on a systematic theory of capital heterogeneity. In this paper we outline the approach to capital developed by the Austrian school of economics and show how Austrian capital theory provides a natural bridge between theory of entrepreneurship and the theory of the firm. We refine Austrian capital theory by defining capital heterogeneity in terms of subjectively perceived attributes, the functions, characteristics, and uses of capital assets. Such attributes are not given, but have to be created or discovered by means of entrepreneurial action. Conceiving entrepreneurship as the organization of heterogeneous capital provides new insights into the emergence, boundaries, and internal organization of the firm, and suggests testable implications about how entrepreneurship is manifested. Journal of Management Studies 2007 PDF Download
THE CONCEPT OF SUSTAINABLE ENTREPRENEURSHIP: A CONCEPTUAL FRAMEWORK AND EMPIRICAL ANALYSIS. IOANNIS N. KATSIKIS
LIDA P. KYRGIDOU
We introduce the concept of “sustainable entrepreneurship” (SE). Since the field of business success lies on three distinctive levels, we argue that SE provides a holistic approach for organizational strategic development. Our case study exhibits how SE can be materialized and offer opportunities for doing well by doing good. Academy of Management Proceedings 2007 PDF Download
The Central Question in Entrepreneurial Cognition Research 2007. Ronald Mitchell
Lowell Busenitz
Barbara Bird Barbara Bird
Connie Marie Gaglio
Jeffery McMullen
Eric Morse
Brock Smith
In this article, we take note of advances in the entrepreneurial cognition research stream. In doing so, we bring increasing attention to the usefulness of entrepreneurial cognition research. First, we offer and develop a central research question to further enable entrepreneurial cognition inquiry. Second, we present the conceptual background and some representative approaches to entrepreneurial cognition research that form the context for this question. Third, we introduce the articles in this Special Issue as framed by the central question and approaches to entrepreneurial cognition research, and suggest how they further contribute to this developing stream. Finally, we offer our views concerning the challenges and opportunities that await the next generation of entrepreneurial cognition scholarship. We therefore invite (and seek to enable) the growing community of entrepreneurship researchers from across multiple disciplines to further develop the “thinking–doing” link in entrepreneurship research. It is our goal to offer colleagues an effective research staging point from which they may embark upon many additional research expeditions and investigations involving entrepreneurial cognition. Entrepreneurship Theory and Practice 2007 PDF Download
TECHNOLOGY & INNOVATION MANAGEMENT Conference Paper Abstracts. effectuation The article presents abstracts concerning issues related to technology and innovation management. They include “A Collective Action Model of Strategic Responses to the Mandatory Adoption of Open Document Format,” “A Dialectical Model of Organizational Loose Coupling: Modularity, Integration, and Innovation,” and “A Dynamic Capabilities Perspective on Innovation Management Practices.” Academy of Management Proceedings 2007  
Risk and rationality in entrepreneurial processes Kent D Miller This study begins with a historical overview of the connection between risk and rationality. It then broadens beyond this historical trajectory by taking entrepreneurship as a point of departure for understanding risk and rationality. Drawing from the research of Littlechild (1986), Buchanan and Vanberg (1991), and Sarasvathy et al. (2003), this study considers three entrepreneurial processes: opportunity recognition, opportunity discovery, and opportunity creation. Associated with each of these processes are unique conceptualizations of risk and rationality, reflected in distinct research streams. The final section of the study considers implications of the process-contingent nature of risk and rationality, and motivates a broadening of the research agenda from entrepreneurial decision making to practices. Copyright © 2007 Strategic Management Society Strategic Entrepreneurship Journal 2007 PDF Download
Returns to Angels In Groups Rob Wiltbank
Warren Boeker
Entrepreneurs and investors regularly wonder what the returns are in angel investing. The completion of this research project provides robust data on this subject that has never before been available. Our findings in this study are based on the largest data set of accredited angel investors collected to date, with information on exits from 539 angels. These investors have experienced 1,137 “exits” (acquisitions or Initial Public Offerings that provided positive returns, or firm closures that led to negative returns) from their venture investments during the last two decades, with most exits occurring since 2004. Analysis of the data revealed important details of the investment outcomes for angel investors connected to angel organizations.   2007 PDF Download
Resources in play: Bricolage in the Toy Store(y) TED BAKER This paper analyzes the “Toy Store(y)” narrative by imagining the words and perspectives of several participants other than those from whose perspective the original story is told. By applying the lens of bricolage to a series of critical events and activities described in the Toy Store(y), I illustrate the theoretical and practical application of prior research findings on both bricolage and improvisation and extend these to make suggestions for useful future research and teaching in these areas. Entrepreneurial NarrativeGreif Symposium on Emerging Organizations 2007 PDF Download
Representational Gaps, Information Processing, and Conflict in Functionally Diverse Teams. M Cronin
Laurie Weingart
Functional diversity in teams, while potentially beneficial, increases the likelihood that individual team members will perceive the team’s task differently, leading to gaps between teammates’ interpretations of what is needed for the team to be successful. These representational gaps are likely to create conflict as teammates try to solve what are essentially incompatible problems. Understanding how these general mechanisms work should deepen our understanding of information processing and conflict in diverse teams. Academy of Management Review 2007 PDF Download
Progress in understanding entrepreneurial behavior Lowell Busenitz   Strategic Entrepreneurship Journal 2007 PDF Download
Opportunity Discovery, Problem Solving and a Theory of the Entrepreneurial Firm Chihmao Hsieh
Jackson A. Nickerson
Todd R. Zenger
abstract When should an entrepreneur employ a market to help discover and exploit opportunities, and when should the entrepreneur create a firm to do so? If a firm is created, how should it be organized? In this paper we argue that opportunities equate to valuable problem-solution pairings, and that opportunity discovery relates to deliberate search or recognition over this solution space. As problem complexity increases, experiential (or ‘directional’) search via trial-and-error provides fewer benefits, and cognitive (or ‘heuristic’) search via theorizing becomes more useful. Cognitive search, however, requires knowledge sharing, when knowledge is distributed among specialists, that is plagued by a knowledge appropriation hazard and a strategic knowledge accumulation hazard. Markets, authority-based hierarchy, and consensus-based hierarchy then have differential effects on the efficiency of opportunity discovery given the complexity of the associated problem. Those entrepreneurs with exceptional capabilities of opportunity recognition can efficiently adopt authority-based governance over a wider range of complexity. We thus combine the two major modes of opportunity discovery – search and recognition – onto one framework that can explain different entrepreneurial organizational forms, resulting in an entrepreneurial theory of the firm. Journal of Management Studies 2007 PDF Download
Opportunities as Existing and Created: A Study of Entrepreneurs in the Swedish Mobile Internet Industry Henrik Berglund The notion of opportunities is fast becoming a central theme in the field of entrepreneurship research. As part of this growing interest, the ontological status of opportunities has been scrutinized with researchers tending to view them as either objectively existing or socially created. In the present treatment, this ontological debate is partly avoided in favor of a phenomenological examination of Mobile Internet entrepreneurs, which naturally bridges these distinctions. The empirical findings are used to propose a framework in which opportunities are seen as both existing and created in the evolving set of perceptions and projections, sometimes fixed and sometimes mutable, that provide the cognitive and practical drivers needed to guide entrepreneurial action. Journal of Enterprising Culture 2007 PDF Download
Market imperfections, opportunity and sustainable entrepreneurship Boyd Cohen
Monika I. Winn
This research develops the argument that four types of market imperfections (i.e., inefficient firms, externalities, flawed pricing mechanisms and information asymmetries) at once contribute to environmental degradation and that they also provide significant opportunities for the creation of radical technologies and innovative business models. We show that these opportunities establish the foundations for an emerging model of sustainable entrepreneurship, one which enables founders to obtain entrepreneurial rents while simultaneously improving local and global social and environmental conditions. To advance this new field, we offer suggestions for a research agenda focusing on two areas: the relationship between market imperfections and entrepreneurial opportunities, and the emerging field of sustainable entrepreneurship. Journal of Business Venturing 2007 PDF Download
Managing Firm Resources in Dynamic Environments to Create Value: Looking Inside the Black Box David Sirmon
Michael A Hitt
R Duane Ireland
We address current criticisms of the RBV (oversight of dynamism, environmental contingencies, and managers’ role) by linking value creation in dynamic environmental contexts to the management of firm resources. Components of the resource management model include structuring the resource portfolio; bundling resources to build capabilities; and leveraging capabilities to provide value to customers, gain a competitive advantage, and create wealth for owners. Propositions linking resource management and value creation are offered to shape future research. Academy of Management Review 2007 PDF Download
Learning asymmetries and the discovery of entrepreneurial opportunities Andrew Corbett Discovering entrepreneurial opportunities requires that individuals not only possess some form of prior knowledge, but that they also have the cognitive abilities that allow them to value and exploit that knowledge. This article builds upon and extends this line of inquiry by examining the relationship between opportunity identification and learning. Based upon an experimental task and other data collected from 380 technology professionals, the article defines a relationship between how individuals acquire and transform information and experience (i.e., learning) in order to identify opportunities. After analyzing the empirical data, the article develops the concept of learning asymmetries and explains how the manner in which people learn may affect their ability to identify entrepreneurial opportunities. Journal of Business Venturing 2007 PDF Download
Innovations, stakeholders and entrepreneurship. Saras Sarasvathy
Nick Dew
In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial innovation has also meant losses and hardships for some members of society: it is destructive of some stakeholders’ wellbeing even as it creates new wellbeing among other stakeholders. Both the positive benefits and negative externalities of innovation are problematic because entrepreneurs initiate new ventures before their private profitability and/or social costs can be fully recognized. In this paper we consider three analytical frameworks within which these issues might be examined: pre-commitments, contractarianism, and an entrepreneurial framework. We conclude that the intersection of stakeholder theory and entrepreneurial innovation is a potentially rich arena for research. Journal of Business Ethics 2007 PDF Download
I LIKE HOW YOU THINK: THE ROLE OF COGNITIVE SIMILARITY AS A DECISION BIAS. Murnieks, Charles Y.
Michael Haynie
Rob Wiltbank
Troy Harting
This article presents academic business research. The article examines the role of cognitive similarity in determining decision outcomes and as a decision bias. In particular, the authors analyze the decision making policies of a sampling of venture capitalists contemplating new ventures. An overview of the hypotheses development and methodology of the research is presented. Results indicate that similarity in cognitive processes has a significant impact on the probability that a venture capitalist will invest, as the probability increases. Academy of Management Proceedings 2007  
From Opportunity Insight to Opportunity Intention: The Importance of Person-Situation Learning Match Dimo Dimov Within the context of opportunity development as a learning process, this paper explores the intentionality that drives the early stages of this process, from the initial occurrence of an idea to its further exploration and elaboration by a potential entrepreneur. It establishes that the specific situations that induce opportunity insights also affect the roles that individuals’ prior knowledge and learning approaches play for the formation of opportunity intentions. The likelihood of acting on their initial opportunity insights depends not only on how much prior knowledge individuals have of the opportunity domain, but also on whether their learning style matches the situation at hand. The results from an experiment show that domain-specific knowledge enables action when there is a person–situation match and impedes it when such a match is lacking. Entrepreneurship Theory and Practice 2007 PDF Download
Environment, organization, and innovation: how entrepreneurial decisions affect innovative success MICHAEL J LEIBLEIN   Strategic Entrepreneurship Journal 2007 PDF Download
ENTREPRENEURSHIP Conference Paper Abstracts. effectuation The article presents abstracts concerning issues related to entrepreneurship. They include “”Generative Dance” Between Tacit Knowledge, Expertise and Organizational Frameworks,” “A Behavioral Agency View of Pay Incentives and Risk-Taking Actions by the Upper Echelons of Spinoffs,” and “A Conceptual and Theoretic Examination of Social Entrepreneurial Discovery.” Academy of Management Proceedings 2007  
Entrepreneurship and Firm Boundaries: The Theory of A Firm Michael G Jacobides
Sidney G Winter
abstract In this paper, we consider how a better understanding of entrepreneurial activities can help explain how firm and industry boundaries change over time and how a more comprehensive understanding of boundary setting can explain where entrepreneurial activities are directed. We start from the premise that while entrepreneurs believe themselves to have superior ideas in one or multiple parts of the value chain, they are characteristically short of cash, and of the ability to convince others to provide it. This premise motivates a simple model in which the entrepreneur has a value-adding set of ideas for ‘upstream’ and ‘downstream’ parts of a value chain, as well as for the ways to make these two parts of the value chain work better when joined under unitary control. Assuming that the entrepreneur’s objective is to maximize her wealth, we observe that even in the presence of transactional risks or other factors that might make integration preferable to specialization, initial scope depends also on relatively unexplored factors such as (a) how severe the entrepreneur’s cash constraint is, and (b) how much value the entrepreneur’s ideas add at each part of the value chain. Entrepreneurs will focus on the areas that provide the maximum profit yield per available cash – a criterion which implies that scope choices depend on cash availability and the depth of the demand for the new idea along the value chain. We also note that entrepreneurs make money not only from the operating profits of their firms, but also from the appreciation of the assets the firm has accumulated. This consideration can change the optimal choice of the firms’ boundaries, as entrepreneurs must be sensitive to choosing the segment that will enable them to benefit not only in terms of profit, but also in terms of asset appreciation. We propose that, in the entrepreneurial context especially, it is helpful to focus on the multiple considerations affecting the choice of boundaries for ‘a’ firm – the context faced by an individual entrepreneur – rather than on generic considerations affecting ‘the’ (representative) firm. Scope choices reflect the entrepreneur’s own theory of ‘how to make money’. Journal of Management Studies 2007 PDF Download
DOING WELL BY DOING GOOD. effectuation This article examines the pursuit of commercial success through the internalization of social good in subsistence markets. Using a study which employs case studies and qualitative research, the authors argue that corporations should internalized social good so that they can succeed in subsistence markets. Micro and macro level rationale is employed to illustrate that societal welfare and customer concerns should be shifted to the focus of strategic planning and should then permeate business processes and functions. Academy of Management Proceedings 2007 PDF Download
Discovery and creation: alternative theories of entrepreneurial action. Sharon Alvarez
Jay Barney
Do entrepreneurial opportunities exist, independent of the perceptions of entrepreneurs, just waiting to be discovered? Or, are these opportunities created by the actions of entrepreneurs? Two internally consistent theories of how entrepreneurial opportunities are formed – discovery theory and creation theory – are described. While it will always be possible to describe the formation of a particular opportunity as an example of a discovery or creation process, these two theories do have important implications for the effectiveness of a wide variety of entrepreneurial actions in different contexts. The implications of these theories for seven of these actions are described, along with a discussion of some of the broader theoretical implications of these two theories for the fields of entrepreneurship and strategic management. Copyright © 2007 Strategic Management Society. Strategic Entrepreneurship Journal(sister journal to Strategic Management Journal) 2007 PDF Download
Contextualizing theory building in entrepreneurship research Shaker A. Zahra Theory development and testing are central to the advancement of entrepreneurship as a scholarly field. For nearly three decades now, researchers have borrowed popular theories from other disciplines and adapted them to the study of diverse entrepreneurship phenomena. This has enhanced the rigor of research findings. Future studies can achieve greater rigor and relevance by paying more attention to the context of their investigations. Understanding the nature, dynamics, uniqueness and limitations of this context can enrich future studies. This article describes common problems revealed in recent entrepreneurship research when applying existing and new theories to well known vs. emerging and novel phenomena. The article also suggests strategies to enrich creative and constructive theory building. Current Research - Traditional Questions 2007 PDF Download
Community-Led Social Venture Creation. Helen Haugh The addition of new enterprises to the economy has long been considered essential to economic growth. The process of venture creation in the private sector has been heavily researched and frequently modeled, although few models explain the process of nonprofit enterprise creation. Nonprofit social ventures pursue economic, social, or environmental aims, generating at least part of their income from trading. They fill market gaps between private enterprise and public sector provision, and, increasingly, policy makers consider them to be valuable agents in social, economic, and environmental regeneration and renewal. This article presents findings from a qualitative study of the inception of five community-led nonprofit social ventures, producing a model of the stages of venture creation: (1) opportunity identification, (2) idea articulation, (3) idea ownership, (4) stakeholder mobilization, (5) opportunity exploitation, and (6) stakeholder reflection. A formal support network and a tailor-made support network are also part of the model, contributing resources to the new venture and assisting progression through the stages. The model highlights the resource acquisition and network creation that precede formal venture creation. In the nonprofit sector, these activities are undertaken by volunteers who do not have a controlling interest in the new venture. For practitioners, the model identifies critical stages in the process of community-led social venture creation and two areas where assistance is most needed: pre-venture business support and postcreating effective networks. Entrepreneurship Theory and Practice 2007 PDF Download
Commentary on Front and backstages of the diminished routinization of innovations, An entrepreneurial perspective on the firm-environment relationship, and Cross-boundary disruptors Jeffrey Covin The papers by Bartunek, Trullen, Immediato, and Schneider (Front and backstages of the diminished routinization of innovations: what innovation research makes public and organizational research finds behind the scenes), Smith and Cao (An entrepreneurial perspective on the firm-environment relationship), and Burgelman and Grove (Cross-boundary disruptors: powerful interindustry entrepreneurial change agents) address the topic of change. The specific foci of these papers are quite different. While commonalities among the papers are certainly identifiable, highlighting the value of these writings is perhaps better achieved by focusing on their unique contributions to the change literature rather than by seeking to identify points of theoretical overlap within the broad domain of change. With this belief in mind, this commentary reviews several of the principal contributions of the three papers to the change literature. Promising research directions pertaining to the topic of change that build directly on observations made in the papers are then discussed. Copyright © 2008 Strategic Management Society. Strategic Entrepreneurship Journal 2007 PDF Download
Beyond the Single-Person, Single-Insight Attribution in Understanding Entrepreneurial Opportunities. Dimo Dimov This article helps develop the creativity perspective within entrepreneurship in two ways. First, it elaborates on the nature of opportunity as a creative product. Rather than viewing opportunities as single insights, it suggests that they are emerging through the continuous shaping and development of (raw) ideas that are acted upon. Second, rather than attributing them to a particular individual, it highlights the contextual and social influences that affect the generation and shaping of ideas. This helps move entrepreneurship research beyond the single-person, single-insight attribution that currently permeates it. Entrepreneurship Theory and Practice 2007 PDF Download
Beyond creative destruction and entrepreneurial discovery: A radical Austrian approach to entrepreneurship Todd Chiles
Bluedorn, A. C.
V K Gupta
Although Schumpeter’s theory on `creative destruction’ and Kirzner’s on `entrepreneurial discovery’ dominate current entrepreneurship research in organization studies, one of the most fundamental debates in modern Austrian economics is that between Kirzner and Lachmann. Using Low and MacMillan’s (1988) key specifications as a rubric, we introduce organizational entrepreneurship scholars to Lachmann’s work, identify the direction in which his radical subjectivist approach would lead the field, and encourage exploring important questions from, and adopting methods consistent with, his provocative perspective. This unique disequilibrium perspective, which takes into account institutional contexts and multiple levels of analysis, offers new theoretical insight into how entrepreneurs create opportunities through expectations of an imagined future and exploit opportunities through continuous resource combination and recombination. Conceptualizing time as subjective and heterogeneous, it facilitates the examination of patterns in entrepreneurial activity, especially when combined with longer time frames. And it offers hermeneutics and ideal-types as alternatives to statistical models, for developing a theoretically sophisticated understanding of how entrepreneurial processes unfold. Organization Studies 2007 PDF Download
Advancing a Framework for Coherent Research on Women’s Entrepreneurship. Anne de Bruin
Candida Brush
Friederike Welter
  Entrepreneurship Theory and Practice 2007 PDF Download
A Cross-Disciplinary Exploration of Entrepreneurship Research R Duane Ireland
Justin Webb
The eclectic and pervasive benefits of entrepreneurship are generating research questions that interest scholars in a variety of disciplines. These questions have been primarily examined within the context of a scholar’s home discipline while ignoring insights from other disciplines. This approach has left entrepreneurship research as a widely dispersed, loosely connected domain of issues. In this review, the authors explore entrepreneurship research in accounting, anthropology, economics, finance, management, marketing, operations management, political science, psychology, and sociology. They seek to identify common interests that can serve as a bridge for scholars interested in using a multitheoretic and multimethodological lens to design and complete entrepreneurship studies. Journal of Management 2007 PDF Download
‘Entrepreneuring’ as a conceptual attractor? A review of process theories in 20 years of entrepreneurship studies Chris Steyaert Entrepreneuring has never achieved a breakthrough as the key concept that could elucidate the inherently process-oriented character of entrepreneurship, but it may be able to serve as the conceptual attractor to accommodate the increasing interest in process theories within a creative process view. This paper considers whether this is possible. In addition to equilibrium-based understandings of the entrepreneurial process, this paper tentatively reconstructs the creative process view by distinguishing between a range of relevant perspectives: from those on complexity and chaos theory, to the interpretive and phenomenological, social constructionist, pragmatic and practice-based, to the relational materialist. Taking entrepreneuring as an open-ended concept to use in theoretical experimentation, the review documents the potential for the concept to develop new meanings and to attach itself to a series of concepts such as recursivity, enactment, disclosure, narration, discourse, dramatization, dialogicality, effectuation, social practice, translation and assemblage. It is argued that the very act of theorizing about the concept of ?entrepreneuring? indicates a move from methodological individualism to a relational turn in entrepreneurship studies, one that inscribes entrepreneurship into a social ontology of becoming. Entrepreneurship & Regional Development 2007 PDF Download
What to do next? The case for non-predictive strategy. Saras Sarasvathy
Stuart Read
Nick Dew
Rob Wiltbank
Two prescriptions dominate the topic of what firms should do next in uncertain situations:planning approaches and adaptive approaches. These differ primarily on the appropriate roleof prediction in the decision process. Prediction is a central issue in strategy making owing tothe presumption that what can be predicted can be controlled. In this paper we argue for the independence of prediction and control. This implies that the pursuit of successful outcomes can occur through control-oriented approaches that may essentially be non-predictive. We further develop and highlight control-oriented approaches with particular emphasis on the question of what organizations should do next. We also explore how these approaches may impact the costsand risks of firm strategies as well as the firm’s continual efforts to innovate. Strategic Management Journal 2006 PDF Download
TO FIND OR NOT TO FIND: HOW DO OPPORTUNITY IDENTIFICATION COGNITIONS DIFFER BY TASK? (INTERACTIVE PAPER) Veronica Gustavsson
Brock Smith
Ronald Mitchell
Opportunity identification is considered to be the most distinctive and fundamental of entrepreneurial behaviors (Gaglio, 1997; Venkataraman, 1997, Shane and Venkataraman, 2000). Opportunity identification has been also assumed a cognitive task and cognitive explanations have often suggested that entrepreneurs operate a distinctive set of perceptual and information-processing skills (Gaglio & Katz, 2001). Cognitive psychologists have identified three types of decision-making cognitions: analysis, quasi-rationality and heuristics. According to correspondence-accuracy principle (Hammond et al., 1987), in order for a decision to be adequate these cognitions would vary depending on the cognitive properties of the task. One of the most powerful moderators of a task’s cognitive properties is uncertainty. According to Sarasvathy et al. (2003), based on Knight (1921), opportunity identification process can be characterized by any level of uncertainty, starting from ultimate to moderate to low. Our study addresses the following research questions: a) whether different types of opportunity identification (Sarasvathy et al., 2003) would induce different cognitions; b) whether opportunity identification cognitions differ when used by expert entrepreneurs compared to novices, and c) if entrepreneurs use different cognitions depending on whether they were able or unable to identify opportunities. Frontiers of Entrepreneurship Research 2006 PDF Download
The use of networks in human resource acquisition for entrepreneurial firms: Multiple “fit” considerations Aegean Leung
Jing Zhang
Poh Kam Wong
MawDer Foo
This study proposes a multi-dimension, multi-contingent “fit” perspective for examining different practices adapted by entrepreneurial firms in acquiring human resources. We posit that while environmental constraints are important considerations for adapting recruitment practices through networks, strategic needs and interpersonal dynamics are the key drivers behind the evolution of such practices. As they transit from the startup to the growth phase, entrepreneurial firms utilize different network pools in search of diversity, yet cling to strong ties to find talents with common values and goals. Our findings carry important implications for future research in human resource management by integrating the macro- and micro-perspective, and at the same time, enhance the understanding of network effects and their strategic bearings in the entrepreneurial process, specifically in the acquisition of human resources. Journal of Business Venturing 2006 PDF Download
Overoptimism and the performance of entrepreneurial firms R A Lowe
A A Ziedonis
Recent theoretical and empirical research on cognitive bias in decision making suggests that overoptimism critically influences entrepreneurs’ decisions to establish and sustain new ventures. We investigate whether such cognitive bias influences entrepreneurial venture performance using data on commercialization efforts for university inventions. In contrast to prior studies, our results suggest that entrepreneurial overoptimism does not appear to be the determining factor in the decision to found a firm. We do find that entrepreneurs continue unsuccessful development efforts for longer periods of time than do established firms, which is consistent with entrepreneurial overoptimism in the development of technologies with uncertain market prospects. This latter finding is also consistent with rationality-based models of decision-making behavior, however. We find that the economic returns associated with many of the technologies in our sample are realized after the start-up has been acquired by an established firm, suggesting that start-ups may serve as a transitional organizational form in the market for technology commercialization. Management Science 2006 PDF Download
ORGANIZATION & MANAGEMENT THEORY Conference Paper Abstracts. effectuation The article presents abstracts in regard to the topic of organization and management theory, including one about the types of motivations that push businesses towards innovation, another about how management leaders approach the processes of exploration and exploitation, and a third which discusses the dependence of commercial television stations on competing organizations. Academy of Management Proceedings 2006  
Optimal Inertia: When organizations should fail Saras Sarasvathy
Nick Dew
Brent Goldfarb
We challenge the premise that the CEO’s job is to keep the corporation alive and thriving at all costs and under all circumstances. We briefly review the differing normative views of strategic management theorists and organizational theorists about organizational inertia. We then develop an economic model of incumbent behavior in the face of challenger competition that accommodates complementary assets. The model predicts and describes conditions under which organizational inertia, as subsequent organizational failure, is optimal. We then extend the logic and propose that the failure of entrepreneurial firms does not necessarily imply the failure of entrepreneurs. We conclude with a call to study ‘‘exit’’ as a viable strategic option.   2006  
Opportunity development as a learning process for entrepreneurs Stefan A Sanz-Velasco Purpose ? To contrast and test two conceptualisations of entrepreneurship: ?opportunity discovery? and ?opportunity development?.Design/methodology/approach ? Following the development of a conceptual framework for the study, an investigation was conducted through semi?structured interviews with the founders and managing directors of 20 start?up ventures in the Swedish mobile internet industry.Findings ? The study illustrates how entrepreneurial learning can be understood from the perspective of ?opportunity development?. This conceptualisation of opportunity incorporates market interaction and real?life processes influenced by prior knowledge, resources, and the industrial context. It is especially appropriate in situations characterised by uncertainty. The alternative conceptualisation of opportunity (in terms of ?opportunity discovery?) is more suitable in situations of low risk when initial opportunity perceptions are comprehensive, allowing entrepreneurs to focus on their products and services, rather than on potential customers and/or appropriation in the market.Research limitations/implications ? The study concerns one industry undergoing substantial changes during a specific period, which limits the generalisability of the findings.Practical implications ? Entrepreneurs might do well to launch ventures based on comprehensive opportunity perceptions.Originality/value ? The paper takes a novel approach to the discussion of opportunity in entrepreneurship. International Journal of Entrepreneurial Behavior & Research 2006 PDF Download
OPPORTUNITY ACKNOWLEDGEMENT AS A COGNITIVE PROCESS OF ALIGNMENT: EVIDENCE FROM VERBAL PROTOCOLS. Denis Gregoire
Pamela S. Barr
Dean Shepherd
The article discusses research into how managers interpret and new information as a precursor to opportunity. Past research has theorized that entrepreneurs/managers base opportunity recognition on the identification of complex patterns. A model is proposed that would track the methods of reasoning that go along with what to do with new technologies to show that entrepreneurs match up the superficial aspects of their new tools with the superficial aspects of their markets. Many of the businesspeople that participated in the research proved to go beyond the superficial aspects of their markets to try and incorporate opportunities that they believed to be helpful. Academy of Management Proceedings 2006 PDF Download
Multistage Selection and the Financing of New Ventures JONATHAN T ECKHARDT
Scott Shane
Frédéric Delmar
Using a random sample of 221 new Swedish ventures initiated in 1998, we examine why some new ventures are more likely than others to successfully be awarded capital from external sources. We examine venture financing as a staged selection process in which two sequential selection events systematically winnow the population of ventures and influence which ventures receive financing. For a venture to receive external financing its founders must first select it as a candidate for external funding, and then a financier must fund it. We find evidence that founders select ventures as candidates for external finance based on their perceptions of market competition, market growth, and employment growth, while financiers base funding decisions on objective verifiable indicators of venture development, such as the completion of organizing activities, marketing activities, and the level of sales of the venture. Our findings have implications for venture financing and evolutionary theories of social processes. Management Science 2006 PDF Download
Measuring emergence in the dynamics of new venture creation Benyamin Lichtenstein
kevin Dooley
Thomas Lumpkin
Modeling the dynamics of nascent entrepreneurship provides insight into how organizations are created. In order to study this complex phenomenon we develop a longitudinal case study and analyze it with respect to three modes of organizing: vision, strategic organizing, and tactical organizing. Multiple sources of data are used to identify changes within and across these three modes. Using longitudinal content analysis and other complexity science methods, we found a nearly simultaneous shift in all three modes, indicating a punctuation event. We define this punctuation as an “emergence event,” and provide a process model of organizational emergence showing that a shift in tactical organizing generated a shift in strategic organizing, which resulted in a shift in the vision (identity) of the firm. We conclude with some theoretical implications of our analysis. Journal of Business Venturing 2006 PDF Download
KNOWLEDGE, ACTION AND THE PUBLIC CONCERN: ATLANTA, GEORGIA AUGUST 11-16 2006. effectuation Information about several papers discussed at the annual Academy of Management (AOM)conference on the connections between organizational knowledge, managerial action and the global economy is presented. Topics include the organization of news rooms, methods of workplace reform, and how managerial knowledge can positively impact global change. The conference featured several management theorists and organizers including AOM President Thomas G. Cummings, President-Elect Ken G. Smith, and Vice President Thomas W. Lee. Academy of Management Proceedings 2006 PDF Download
Is There Conceptual Convergence in Entrepreneurship Research? A Co-Citation Analysis of Frontiers of Entrepreneurship Research, 1981-2004. Denis Gregoire
MArtin Noel
Richard Dery
Jean-Pierre Bechard
Conceptual convergence is often seen as a holy grail in entrepreneurship research. Yet little empirical research has focused specifically on the extent and nature of this convergence. We address this issue by content-analyzing the networks of co-citation emerging from the 20,184 references listed in the 960 full-length articles published in the Frontiers of Entrepreneurship Research series between 1981 and 2004. Our results provide evidence for the varying levels of convergence that have characterized entrepreneurship research over the years, as well as the evolution of the conceptual themes that have attracted scholars’ attention in different periods. In addition, we provide evidence that the field relies increasingly on its own literature, something that points toward the unique contribution that it makes to the management sciences. Entrepreneurship Theory and Practice 2006 PDF Download
Exploring the Role of Trust in Entrepreneurial Activity. Friederike Welter
David Smallbone
  Entrepreneurship Theory and Practice 2006 PDF Download
Entrepreneurship and Dynamic Capabilities: A Review, Model and Research Agenda* Shaker A. Zahra
Harry Sapienza
Per Davidsson
abstract The emergent literature on dynamic capabilities and their role in value creation is riddled with inconsistencies, overlapping definitions, and outright contradictions. Yet, the theoretical and practical importance of developing and applying dynamic capabilities to sustain a firm’s competitive advantage in complex and volatile external environments has catapulted this issue to the forefront of the research agendas of many scholars. In this paper, we offer a definition of dynamic capabilities, separating them from substantive capabilities as well as from their antecedents and consequences. We also present a set of propositions that outline (1) how substantive capabilities and dynamic capabilities are related to one another, (2) how this relationship is moderated by organizational knowledge and skills, (3) how organizational age affects the speed of utilization of dynamic capabilities and the learning mode used in organizational change, and (4) how organizational knowledge and market dynamism affect the likely value of dynamic capabilities. Our discussion and model help to delineate key differences in the dynamic capabilities that new ventures and established companies have, revealing a key source of strategic heterogeneity between these firms. Journal of Management Studies 2006 PDF Download
Entrepreneurs, Effectual Logic, and Over-Trust. Ranjan Karri
Sanjay Goel
This article complements extant literature on entrepreneurship and trust by proposing a model of over-trust (the tendency to trust more than what is warranted) using entrepreneurial characteristics and effectual logic. We trace how entrepreneurs following effectual processes may tend to over-trust. More formally, we propose that specific personality characteristics of the entrepreneur interact with effectual logic to make the entrepreneur more susceptible to over-trust. The proposed model is value neutral in that we do not imply that over-trust has negative consequences for entrepreneurs. In fact, it may be part of the overall risk that entrepreneurs assume in a new venture creation. Entrepreneurship Theory and Practice 2006 PDF Download
Entrepreneurial Risk and Market Entry Brian Wu
Anne Marie Knott
This paper attempts to reconcile the risk-bearing characterization of entrepreneurs with the stylized fact that entrepreneurs exhibit conventional risk-aversion profiles. We propose that the disparity arises from confounding two distinct dimensions of uncertainty: demand uncertainty and ability uncertainty. We further propose that entrepreneurs will be risk averse with respect to demand uncertainty, yet ?apparent risk seeking? (or overconfident) with respect to ability uncertainty. To examine this view, we construct a reduced-form model of the entrepreneur?s entry decision, which we aggregate to the market level, then test empirically. We find that entrepreneurs in aggregate behave as we predict. Accordingly, risk-averse entrepreneurs are willing to bear market risk when the degree of ability uncertainty is comparable to the degree of demand uncertainty. Potential market failures exist in instances where there is a high demand uncertainty but low performance dispersion (insufficient entry), or low demand uncertainty but high performance dispersion (excess entry). Management Science 2006 PDF Download
Entrepreneurial Action And The Role Of Uncertainty In The Theory Of The Entrepreneur. Jeffery McMullen
Shepherd Dhliwayo
By considering the amount of uncertainty perceived and the willingness to bear uncertainty concomitantly, we provide a more complete conceptual model of entrepreneurial action that allows for examination of entrepreneurial action at the individual level of analysis while remaining consistent with a rich legacy of system-level theories of the entrepreneur. Our model not only exposes limitations of existing theories of entrepreneurial action but also contributes to a deeper understanding of important conceptual issues, such as the nature of opportunity and the potential for philosophical reconciliation among entrepreneurship scholars. Academy of Management Review 2006 PDF Download
A CONSTRUCTIVIST FRAMEWORK FOR UNDERSTANDING ENTREPRENEURIAL OPPORTUNITIES (SUMMARY) Didier Chabaud
M. Joseph NGIJOL
The seminal papers of Venkataraman (1997) and Shane & Venkataraman (2000) open a new way to analyze entrepreneurship, focusing around the question of opportunities. Nevertheless, although stimulating, these papers remain strongly influenced by an Austrian Economics point of view (Kirzner, 1973, 1979, 1997) and authors that follow this line adopt a positivist perspective: they argue that opportunities are “given” and it is up to the entrepreneur to discover an object which exists independently to him/her (Shane, 2003). In this view, the entrepreneurial process is seen as a sequence distinguishing between the discovery and the exploitation of the business opportunity (Davidsson, 2005, Shane, 2003). Nevertheless, a growing literature tends to argue that opportunities are no longer simply recognised by the entrepreneur as objects existing on an independent basis: opportunities are considered as the result of an emergent process initiated by the entrepreneur (Sarasvathy, 2001; Gartner, Carter and Hills, 2003). In other words, opportunities appear as the fruit of social construction. In a parallel way, Davidsson (2005) will emphasize that “the discovery and exploitation processes feed back on one another”. Building on Chiasson and Saunders (2005), we challenge these views by trying to show how a constructivist point of view enables to reconcile the different perspectives mentioned above, which enables to better understand the phenomenon. This permits us to propose a new conceptual framework opening to empirical research, and enabling to capitalize on the both lines of research. Frontiers of Entrepreneurship Research 2006 PDF Download
Untangling the Intuition Mess: Intuition as a Construct in Entrepreneurship Research. Mitchell j
Ronald Mitchell
Paul Friga
Entrepreneurs often use intuition to explain their actions. But because entrepreneurial intuition is poorly defined in the research literature: the “intuitive” is confused with the “innate,” what is systematic is overlooked, and unexplained variance in entrepreneurial behavior remains high. Herein we: (1) bound and define the construct of entrepreneurial intuition within the distinctive domain of entrepreneurship research; (2) apply a levels-of-consciousness logic and process dynamism approach to; (3) organize definitions, antecedents, and consequences; and (4) produce propositions that lead to a working definition of entrepreneurial intuition. Our analysis renders intuition more usable in entrepreneurship research, and more valuable in practice. Entrepreneurship Theory and Practice 2005 PDF Download
The Role of Prediction in New Venture Investing Rob Wiltbank
Richard Sudek
Early stage investors openly discount/ignore the predictions that entrepreneurs show in their business plans as they pitch to investors. At the same time, many predictions about the venture continue to anchor investor evaluations. However, investors’ use of predictive and non-predictive information varies based on their own approach to dealing with uncertainty, their own entrepreneurial experience, and the steps in the evaluation process (i.e. screening, due diligence, and funding). Evaluating data from more than 2,700 individual investor evaluations of 150 new ventures, we find that investors with more entrepreneurial experience are more effectual in how they approach the development of new ventures. We also find that investors grade their area of emphasis more stringently, i.e. those who weight predictive information grade it “tougher.” Overall, investors emphasize predictive information more than they might suppose, especially early in the selection process, but once a venture has moved through the funding process to due diligence and investment, non-predictive information is the key factor.   2005 PDF Download
The Role of Organizational Learning in the Opportunity-Recognition Process. Thomas Lumpkin
Benyamin Bergmann Lichtenstein
Firms engage in entrepreneurship to increase performance through both strategic renewal and the creation of new venture opportunities. Organizational learning (OL) has become an effective avenue for strategic renewal. But what of creating venture opportunities—can OL enhance the process of recognizing and pursuing new ventures? This article argues that OL can strengthen a firm’s ability to recognize opportunities and help equip them to effectively pursue new ventures. First, we identify three approaches to OL—behavioral, cognitive, and action. Then, we introduce a creativity-based model of opportunity recognition (OpR) that includes two phases—discovery and formation. Next, we show how each of the three types of learning is linked to the two phases of OpR. We suggest propositions that support our claim that OL enhances OpR and offer examples of firms that have used these organizational-learning approaches to more effectively recognize and pursue venture opportunities. These insights have important implications for entrepreneurial firms seeking to advance the venture-creation process. Entrepreneurship Theory and Practice 2005 PDF Download
The Process of Entrepreneurial Learning: A Conceptual Framework Diamanto Politis The present article seeks to advance the theoretical knowledge of entrepreneurial learning by reviewing and synthesizing available research into a conceptual framework that explains the process of entrepreneurial learning as an experiential process. The framework identifies three main components in the process of entrepreneurial learning: entrepreneurs’ career experience, the transformation process, and entrepreneurial knowledge in terms of effectiveness in recognizing and acting on entrepreneurial opportunities and coping with the liabilities of newness. Based on the arguments in the article, five major propositions were developed to refine our understanding of entrepreneurial learning. Finally, theoretical and practical implications were discussed. Entrepreneurship Theory and Practice 2005 PDF Download
The Nature of Entrepreneurial Opportunities: Understanding the Process Using the 4I Organizational Learning Framework Dev K Dutta
Mary M Crossan
In this article, we drew upon insights from two rather disparate streams of literature—entrepreneurship and organizational learning—to develop an informed understanding of the phenomenon of entrepreneurial opportunities. We examined the nature of entrepreneurial opportunities from two contrasting views—Schumpeterian and Kirznerian—and delved into their ontological roots. By applying the 4I organizational learning framework to entrepreneurial opportunities, we were able to not only resolve the apparently conflicting explanations of opportunities arising out of the contrasting ontological positions but also to achieve a level of pragmatic synthesis between them. In highlighting the article’s contributions to theory and practice, we suggest that just as research on entrepreneurial opportunities benefits from applying organizational learning theory, so is organizational learning informed by research arising within the field of entrepreneurship studies. Entrepreneurship Theory and Practice 2005 PDF Download
Reconciling diverse approaches to opportunity research using the structuration theory Mike Chiasson
Chad Saunders
Structuration theory (ST) is used to reconcile six approaches to opportunity research that emphasize either the recognition or formation of entrepreneurial opportunity. While opportunity recognition focuses on the restricting role of business and social structure on entrepreneurial activity, opportunity formation emphasizes the creation of opportunities by the entrepreneur. In contrast to this dichotomy, ST argues that recognition and formation are recursively implicated because it dissolves the dichotomy between structure and agency, thus showing how entrepreneurial action is both enabled and constrained by the conscious selection, imitation, and modification of business scripts by entrepreneurs. The implications for opportunity research and practice are discussed. Journal of Business Venturing 2005  
New market creation as transformation. Saras Sarasvathy
Nick Dew
Is newmarket creation a search and selection process within the theoretical space of all possible markets? Or is it the outcome of a process of transformation of extant realities into new possibilities? In this article we consider new market creation as a process involving a new network of stakeholders. The network is initiated through an effectual commitment that sets in motion two concurrent cycles of expanding resources and converging constraints that result in the new market. The dynamic model was induced from two empirical investigations, a cognitive science-based investigation of entrepreneurial expertise, and a real time history of the RFID industry. Journal of Evolutionary Economics 2005  
Missing the boat or sinking the boat: a study of new venture decision making John W Mullins
David Forlani
Taking two conceptualizations of risk, Dickson and Giglierano’s [J. Mark. 50 (1986) 58] nautical analogy of entrepreneurial risk (sinking vs. missing the boat) to represent the likelihood of loss element of new venture risk, and March and Shapira’s [Manage. Sci. 33 (1987) 1404] risk as hazard (boat size) to represent the magnitude of loss element of new venture risk, we investigated how two contextual factors, the suitability of entrepreneurs’ skills and their sources of funds, and two individual differences factors, the entrepreneurs’ risk propensities and their perceptions of risk, influence their new venture decision making. Metaphorically speaking, we found that most entrepreneurs would rather risk missing than sinking the boat, and that they preferred to pilot bigger craft than smaller ones. Perhaps surprisingly, our sample of highly successful entrepreneurs made relatively risk-averse choices, with 83% choosing either of the two ventures for which the chances for loss were lowest. We also found that the source of new venture funding—the entrepreneur’s own money versus that of investors—influenced our subjects’ choices between ventures whose chances for loss or gain differed. A similar effect was found for the entrepreneur’s risk propensity. On the other hand, we found that the risk the entrepreneurs perceived in the choice set also influenced choices, but only where the magnitude of the new venture’s potential gain or loss varied. When viewed in total, our study and results suggest a risk- and reward-based typology of new venture opportunities, one that may provide a conceptual foundation for future explorations of a variety of questions relevant for entrepreneurs and theorists alike. Journal of Business Venturing 2005 PDF Download
Knowing what to do and doing what you know: Entrepreneurship as a form of expertise. Saras Sarasvathy
Stuart Read
The authors acknowledge that entrepreneurship is a complex phenomenon that merits a variety of approaches to study it. They add to extant approaches the study of entrepreneurial expertise–that is, a set of skills, models, and processes that can be … The Journal of Private Equity 2005 PDF Download
New Market Creation Through Transformation Saras Sarasvathy
Nick Dew
Is new market creation a search and selectionprocess within the theoretical space of all possible markets? Or is it the outcome of a process of transformation of extant realities into new possibilities? In this article we consider new market creation as a process involving a new network of stakeholders. The network is initiated through an effectual commitment that sets in motion two concurrent cycles of expanding resources and convergingconstraints that result in the new market. The dynamic model was induced from two empirical investigations, a cognitive science-based investigation of entrepreneurial expertise, and a real time history of the RFID industry. Journal of Evolutionary Economics 2005 PDF Download
Investment Practices and Outcomes of Informal Venture Investors Rob Wiltbank This study explores a model of venture investing developed from the literature on formal venture capital research in the setting of angel investing in the United States. The model explores the role of venture stage, due diligence, deal flow, co-investing, and post investment participation on the distribution of returns to angel investors. Doing so directly addresses an interesting question regarding the extent to which formal venture capital practices are appropriate and effective in the typical angel investment setting. In the process, results from the first relatively large scale study of angel investor outcomes in the U.S. are reported and related to earlier findings for U.K. angel investors. Venture Capital: International Journal of Entrepreneurial Finance 2005 PDF Download
Human capital theory and venture capital firms: exploring “home runs” and “strike outs” Dimo Dimov
Dean Shepherd
Using a human capital perspective, we investigated the relationship between the education and experience of the top management teams of venture capital firms (VCFs) and the firms’ performance. We found that although general human capital had a positive association with the proportion of portfolio companies that went public [initial public offering (IPO)], specific human capital did not. However, we did find that specific human capital was negatively associated with the proportion of portfolio companies that went bankrupt. Interestingly, some findings were contrary to expectations from a human capital perspective, specifically the relationship between general human capital and the proportion of portfolio companies that went bankrupt. Future research is suggested. Journal of Business Venturing 2005 PDF Download
Entrepreneurship Research in AMJ: What Has Been Published, and What Might the Future Hold? R Duane Ireland
Christopher R Reutzel
Justin Webb
This article describes the trends associated with publishing entrepreneurship research in the “Academy of Management Journal” (AMJ), identifies some of the characteristics of the entrepreneurship research that has been published in the past, and offers some expectations about the entrepreneurship research that may be published in the future. The authors state that the amount of entrepreneurship research AMJ is publishing continues to increase. The authors’ research indicates that scholars are increasingly interested in studying questions regarding new ventures, international entrepreneurship, and initial public offerings. Academy of Management Journal 2005 PDF Download
ENTREPRENEURSHIP Conference Paper Abstracts. effectuation This section presents abstracts of several papers on entrepreneurship. The first paper proposes a multi-dimension, multi-contingent fit perspective for examining different practices adapted by entrepreneurial firms in acquiring human resources. Another paper elaborates theoretical foundations for opportunity-based entrepreneurial discovery research and presents an empirical study providing evidence for examining the validity of an opportunity-based research approach. One more paper explores innovation as a corporate entrepreneurial outcome in recently established small firms. Academy of Management Proceedings 2005  
ENTREPRENEURSHIP AND STEREOTYPES: ARE ENTREPRENEURS FROM MARS OR FROM VENUS? Vishal K. Gupta
Daniel B. Turban
S. Arzu Wasti
ARIJIT SIKDAR
The goal of this study was to examine gender-role stereotypes in entrepreneurship and the relationship between such stereotypes and entrepreneurial intentions. Three forms of the 92-item Schein Descriptive Index were used to measure gender role stereotypes and characteristics of entrepreneurs in general. Data were collected from respondents at the pre-entrepreneurial stage in three countries, US, Turkey and India. The results revealed that, in general, entrepreneurs are perceived to have predominantly male characteristics. Further, although both men and women perceive entrepreneurs to have characteristics similar to those of males, only women also perceived entrepreneurs and females as having some similar characteristics. We also found that respondents who perceived themselves as more similar to males had higher entrepreneurial intentions than those who see themselves as less similar to males while no such difference was found for people who saw themselves as more or less similar to females. The results were consistent across the three national cultures in our sample. The implications of our findings for both research and practice are discussed. Academy of Management Proceedings 2005 PDF Download
Entrepreneurial logics for a technology of foolishness Saras Sarasvathy
Nick Dew
Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this essay we use empirical data from two separate studies of entrepreneurial expertise, one involving the creation of new ventures and the other the birth of a new industry to identify three logics that constitute working elements of a technology of foolishness: (1) the logic of identity, as opposed to the logic of preferences; (2) the logic of action, as opposed to the logic of belief; and (3) the logic of commitment, as opposed to the logic of transaction.   2005  
Entrepreneurial logics for a technology of foolishness Saras Sarasvathy
Nick Dew
Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this essay we use empirical data from two separate studies of entrepreneurial expertise, one involving the creation of new ventures and the other the birth of a new industry to identify three logics that constitute working elements of a technology of foolishness: (1) the logic of identity, as opposed to the logic of preferences; (2) the logic of action, as opposed to the logic of belief; and (3) the logic of commitment, as opposed to the logic of transaction. Present and Future 2005 PDF Download
Entrepreneurial Learning: Researching the Interface Between Learning and the Entrepreneurial Context Richard T Harrison
Claire Leitch
The context for the research presented in this article arises from increasing interest, by academics and practitioners, in the importance of learning and knowledge in the knowledge-based economy. In particular, we consider the scope for applying concepts of learning within the field of entrepreneurship. While it has gained currency within the field of management, the application of these concepts to entrepreneurship has been limited. In this Introduction to the Special Issue, we review the development of the field of entrepreneurship as a context for the emergence of learning as an area of scholarly attention, summarize a number of key themes emerging from the organizational learning literature, and outline the article selection process and summarize the key elements of each of the included articles. The article concludes with some reflections on future research at the interface between learning and the entrepreneurial context. Entrepreneurship Theory and Practice 2005 PDF Download