a comprehensive review of strategic entrepreneurship
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University of Calgary
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Graduate Studies The Vault: Electronic Theses and Dissertations
2014-09-23
A Comprehensive Review of Strategic
Entrepreneurship Research: Integration and
Implications for Organizational Studies
Abousalem, Nadine
Abousalem, N. (2014). A Comprehensive Review of Strategic Entrepreneurship Research:
Integration and Implications for Organizational Studies (Unpublished master's thesis). University
of Calgary, Calgary, AB. doi:10.11575/PRISM/24674
http://hdl.handle.net/11023/1784
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UNIVERSITY OF CALGARY
A Comprehensive Review of Strategic Entrepreneurship Research:
Integration and Implications for Organizational Studies
by
NADINE ABOUSALEM
A THESIS
SUBMITTED TO THE FACULTY OF GRADUATE STUDIES
IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE
DEGREE OF MASTER OF BUSINESS ADMINISTRATION
HASKAYNE SCHOOL OF BUSINESS
CALGARY, ALBERTA
SEPTEMBER, 2014
© NADINE ABOUSALEM 2014
ii
ABSTRACT
While the origins of strategic entrepreneurship (SE) can be clearly traced and defined,
the current conceptualizations of the construct its boundaries are far less clear. There is
still much confusion about SE, and many potential gaps exist in the field. It becomes
less clear whether SE is a subfield within the entrepreneurship discipline, a subset of
strategic management or of corporate entrepreneurship, or an entirely separate domain
that simultaneously or sequentially straddles entrepreneurship and strategy.
The primary contributions of this research are the definition of strategic
entrepreneurship’s boundaries and the identification of the five critical dimensions of
strategic entrepreneurship:
1. The balance between exploration (i.e. opportunity-seeking behaviors) and
exploitation (i.e. advantage-seeking behaviors), where the former emerges from
entrepreneurship and the latter emerges from strategy
2. Value creation
3. Balancing short-term success with a long-term perspective
4. The continuous nature of strategically entrepreneurial activity
5. Innovation
iii
ACKNOWLEDGEMENTS
I would like to thank my supervisors, Dr. Jim Dewald and Dr. Olga Petricevic, for their
guidance, support, and feedback. You are both great teachers.
I would also like to thank my parents for supporting me throughout this long (and
sometimes difficult) writing process. Your advice has always kept me grounded and
focused.
I would also like to give a special thanks to Sandra Malach. I fell in love with
entrepreneurship after taking your ENTI 381 class in my sophomore year, and it was our
meeting a year and a half ago that gave me the final push to pursue graduate studies.
iv
DEDICATION
To Badr
v
TABLE OF CONTENTS
Abstract .................................................................................................................. ii
Acknowledgements ............................................................................................... iii
Dedication ............................................................................................................. iv
Table of Contents .................................................................................................. v
List of Tables ......................................................................................................... ix
List of Figures and Illustrations .............................................................................. x
List of Symbols, Abbreviations and Nomenclature ................................................ xi
Epigraph ............................................................................................................... xii
INTRODUCTION ................................................................................................... 1
RESEARCH QUESTIONS AND PROBLEM DEFINITION .................................... 4
INTRODUCTION TO STRATEGIC ENTREPRENEURSHIP ................................ 5
The Importance of Strategic Entrepreneurship .................................................. 8
METHODS .......................................................................................................... 11
Sampling Procedures ...................................................................................... 11
Literature Search Results ................................................................................ 15
GENERAL DISCUSSION .................................................................................... 19
The Origins and History of Strategic Entrepreneurship ................................... 19
The Genesis of the Strategic Entrepreneurship Field ................................. 24
Key Points ............................................................................................. 26
THE FIELD OF STRATEGIC ENTREPRENEURSHIP ........................................ 27
Integration of Strategy and Entrepreneurship .................................................. 30
Key Points ............................................................................................. 33
THE FOUR QUESTIONS .................................................................................... 34
Boundaries of Strategic Entrepreneurship ....................................................... 34
As a Separate Field of Study ...................................................................... 35
vi
As a Construct ............................................................................................ 39
Components of Strategic Entrepreneurship ................................................ 42
Innovation in Strategic Entrepreneurship .............................................. 50
Value Creation in Strategic Entrepreneurship ....................................... 54
Levels of Analysis ....................................................................................... 61
What All This Means ................................................................................... 65
Key Points ............................................................................................. 66
Brief Overview of Current Research ................................................................ 68
Themes in Extant Literature ............................................................................ 78
Value Creation ............................................................................................ 78
Exploration and Exploitation ....................................................................... 78
Middle Managers ........................................................................................ 79
Innovation ................................................................................................... 81
Knowledge Spillover ................................................................................... 81
Family Firms ............................................................................................... 82
Overview and Analysis of Conceptual Frameworks ........................................ 83
Early Conceptualizations and Descriptions ................................................ 85
More Complex Conceptual Frameworks ..................................................... 88
Later Conceptualizations and Descriptions ................................................. 91
Key Points ............................................................................................. 99
Other Frameworks ......................................................................................... 100
Knowledge Spillover View of Strategic Entrepreneurship (KSSE) ............ 101
Strategic Entrepreneurship in Family Firms .............................................. 102
Key Points ........................................................................................... 105
Strategic Entrepreneurship’s Limited Empirical History ................................. 106
Empirically-Tested Frameworks and Results ........................................... 106
The Need for an Accepted Measure of Strategic Entrepreneurship .............. 112
Qualitative Studies .................................................................................... 113
Entrepreneurial Orientation (EO) .............................................................. 114
Stevenson’s Model of Entrepreneurial Management ................................ 116
vii
Innovation ................................................................................................. 117
Key Points ........................................................................................... 118
Successful Implementation of Strategic Entrepreneurship ............................ 119
Key Points ........................................................................................... 125
Challenges of Strategic Entrepreneurship ..................................................... 126
Key Points ........................................................................................... 135
THE FIVE DIMENSIONS OF STRATEGIC ENTREPRENEURSHIP ................ 137
Content Analysis and Coding Method ........................................................... 140
The Dimensions ............................................................................................. 141
Other Results ............................................................................................ 147
Key Points ........................................................................................... 150
WHERE DOES STRATEGIC ENTREPRENEURSHIP FIT? ............................. 152
Key Points ........................................................................................... 155
Findings ......................................................................................................... 155
Recommendations ......................................................................................... 162
FUTURE RESEARCH DIRECTIONS ................................................................ 165
DISCUSSION AND IMPLICATIONS ................................................................. 177
Implications for Scholars ............................................................................... 177
Implications for Managers ............................................................................. 182
Short Example: Apple Incorporated .......................................................... 184
Concluding Thoughts ..................................................................................... 187
REFERENCES .................................................................................................. 189
APPENDIX A: LIST OF STRATEGIC ENTREPRENEURSHIP ARTICLES FROM
LITERATURE SEARCH PUBLISHED FROM 2001 TO 2014 ................... 210
viii
APPENDIX B: LIST OF DEFINITIONS AND DESCRIPTIONS OF STRATEGIC
ENTREPRENEURSHIP USED IN ACADEMIC PAPERS FROM 2001 TO 2014
.................................................................................................................. 219
ix
LIST OF TABLES
Table 1. Selected Definitions and Descriptions of Strategic Entrepreneurship ............ 139
x
LIST OF FIGURES AND ILLUSTRATIONS
Figure 1. Breakdown of Analyzed Papers by Journal .................................................... 16
Figure 2. Breakdown of Analyzed Papers by Field ........................................................ 17
Figure 3. Frequency of Strategic Entrepreneurship Publications from 2001-2014 ......... 18
Figure 4. Where Strategic Entrepreneurship Fits ......................................................... 153
xi
LIST OF SYMBOLS, ABBREVIATIONS AND NOMENCLATURE
Acronym Definition
AMJ Academy of Management Journal
CE Corporate entrepreneurship
ET&P Entrepreneurship Theory & Practice
EO Entrepreneurial orientation
IJTM International Journal of Technology Management
JIBS Journal of International Business Studies
JOM Journal of Management
KSSE Knowledge spillover view of strategic entrepreneurship
RBV Resource-based view
SE Strategic entrepreneurship
SEJ Strategic Entrepreneurship Journal
SMS Strategic Management Society
xii
EPIGRAPH
“Every advantage is temporary.”
Katerina Stoykova Klemer
1
INTRODUCTION
While the origins of strategic entrepreneurship (SE) construct can be clearly traced and
defined, the current frameworks for the construct and the construct’s boundaries (in
terms of its contributions to domains of strategy and entrepreneurship respectively) are
far less clear. There is still much confusion about SE and many potential gaps exist in
terms of its conceptualization (Schindehutte and Morris, 2009), which ultimately makes
its implications to organizational studies less understood. It becomes less clear whether
SE is a subfield within the entrepreneurship discipline, a subset of strategic
management or of corporate entrepreneurship, or an entirely separate domain that
simultaneously or sequentially straddles entrepreneurship and strategy (Schindehutte
and Morris, 2009). In fact, some go as far as to suggest that SE represents a benign
takeover of entrepreneurship by strategic management (Baker and Pollock, 2007;
Meyer, 2009). Strategic entrepreneurship, therefore, suffers many of the same
problems as strategic management and entrepreneurship before it, in that it is
characterized by a lack of construct legitimacy and undefined theoretical content and
boundaries as a field of study.
For the field of strategic entrepreneurship to become established and further developed,
and to identify the current research gaps and how they can be filled, the boundaries of
the field need to be defined in relation to similar constructs (such as corporate
entrepreneurship). Boundary definition requires identification and establishment of a
conceptual framework for SE, as there have been several attempts to change and
2
refine the initial seminal framework proposed by Ireland, et al. (2003) (i.e. Ireland and
Webb, 2007; Agarwal, et al., 2007; Agarwal, et al., 2010; Kyrgidou and Hughes, 2010;
Hitt, et al., 2011; Kraus, et al., 2011; Lumpkin, et al., 2011).
Many differing descriptions and opinions exist among scholars as to the nature of
strategic entrepreneurship and what constitutes SE activity. Kuratko and Audretsch,
(2009), for example, highlighted many of these differing perspectives on this emerging
concept by interviewing different management scholars. To answer the first question
and reconcile some of these perspectives, a definitional analysis has been conducted to
assess different scholars’ definitions and descriptions of strategic entrepreneurship and
the common themes emerging from those different definitions. Next, a comprehensive
literature search and review aims to help answer the latter three questions by
determining the boundaries of the strategic entrepreneurship construct and field and
providing an overview of how conceptual frameworks of strategic entrepreneurship have
emerged and evolved over the construct’s short history.
The primary contribution of this research is the identification of the five critical
dimensions of strategic entrepreneurship through a definitional content analysis. The
secondary contribution of this research is the integration all current knowledge of SE
into a comprehensive analysis. An overview of all conceptual frameworks in the field
thus far is given. A discussion on themes within the extant body of SE literature is also
included. Previous papers with a similar intent do not provide as a comprehensive
3
review of the field. The tertiary contribution of this research is to highlight the research
gaps within the field, including the need for more empirically-driven papers in this field.
Lastly, implications of the results for both academics and practitioners are discussed.
4
RESEARCH QUESTIONS AND PROBLEM DEFINITION
Foss and Lyngsie (2011) indicate that, “strategic entrepreneurship is still mainly a rather
loose amalgam of a number of insights from strategy and entrepreneurship,” confirming
the need for some clarity in this emerging field.
To determine the contributions and implications of SE in the organizational studies
domain, the following research questions need to be and will be answered in this
research:
1. What are the definitional boundaries of strategic entrepreneurship?
2. Where does strategic entrepreneurship fit in the domains of strategy and
entrepreneurship?
3. What does strategic entrepreneurship contribute to either of these domains?
4. Where is the field of strategic entrepreneurship now, and what does it need to
further develop?
5
INTRODUCTION TO STRATEGIC ENTREPRENEURSHIP
Entrepreneurial orientation and activity within large firms has been the subject of
academic literature for the past few decades. Corporate entrepreneurship (CE), for
example, as coined by Peter F. Drucker, occurs as a result of a firm’s entrepreneurial
orientation (i.e. pursuing growth or creating values through new ventures within a firm’s
organizational framework). Strategic Entrepreneurship (SE), a term coined by Ireland,
et. al. (2003), is a concept developed from the suggestion of an intersection between
strategic management and entrepreneurship, and building on contributions by
(Burgelman, 1983; Zahra, 1991; Covin and Miles, 1999). The SE domain is still in its
formative years (Ireland, 2007), and while scholars have spent time trying to define SE,
little attention has been given to identify the boundaries of SE and its distinctive place in
the fields of entrepreneurship and strategy respectively, especially in relation to other
constructs like corporate entrepreneurship. The need for conceptual clarity still exists,
even with the efforts of several scholars to shed light on the exact nature of strategic
entrepreneurship (Meyer, 2009; Kuratko and Audretsch, 2009; Schindehutte and
Morris, 2009; Hitt, et al., 2011; Kraus, et al, 2011; Van Rensburg, 2013).
Schindehutte and Morris (2009) described the need to answer the question of whether
SE is a “framework, model, theory, paradigm, concept or a simple point of interface;” by
concluding that strategic entrepreneurship is not “strategy that is entrepreneurial” or
“entrepreneurship that is strategic” or “entrepreneurship plus strategy.” None of these
phrases encompass the fundamental integration or intersection between
6
entrepreneurship and strategic management that Ireland, et al (2003) described in their
seminal paper on the topic. Schindeutte and Morris (2009) warn that SE is not a binary
construct and should be viewed as something beyond simple interfaces or
combinations of strategy and entrepreneurship.
In fact, the “inherently paradoxical” tensions in SE do not interact with each other as a
series of oppositions and differences such as exploration and exploitation—they are
also interdependent and complement each other in a movement between order and
chaos (Schindehutte and Morris, 2009). In support of this notion, Kyrgidou and Hughes
(2010) present an iterative model of strategic entrepreneurship as an improvement over
the linear model presented by Ireland, et al. (2003). The iterative model better
represents the constant tension between opportunity-seeking and advantage-seeking
behaviors and the need for firms to constantly balance the two behaviors for effective
SE (Ireland and Webb, 2009; Kyrgidou and Hughes, 2010; Siren, et al., 2011). In other
words, firms effectively using SE will not necessarily engage, for example, in exploration
activities exclusively at one point in time, and then engage in exploitation activities.
Rather, firms must engage in both types of activities. As Schindehutte and Morris
(2009) put it, SE “does not imply a compromise, integration, or balance of bipolar
tensions, but the simultaneous existence of two inconsistent states“. Additionally, the
iterative framework better captures the complexity of the strategic entrepreneurship
process, in that it is not a simple process within a firm. Furthermore, achieving the
complex balance between exploration and exploitation consists of more than merely
7
allocating resources evenly between the two processes; rather, each is a wholly distinct
and different process and transitioning between the two can prove to be challenging to
firms (Ireland and Webb, 2007). In fact, some organizational observers have noticed
that exploitation tends to drive out exploration (Ireland and Webb, 2007), making
achieving such a balance extremely difficult. However, more work has to be done on
studying this complex balance within an SE complex.
The fundamental question in the newly formed SE field is how firms create value. In
other words, how should firms combine entrepreneurial action that creates new
opportunities with strategic action that generates competitive advantage (Agarwal, et
al., 2007). Scholars have already attempted to answer this question in various ways,
building a strong theoretical base for the construct that has yet to be supported by a
strong empirical foundation (although two empirical studies exist to date that test SE in
a practical setting). For example, some papers have been written about the exploration
and exploitation balance inherent to SE as the key to value creation (Ireland and Webb,
2009). Other papers connect SE to knowledge spillovers, based on a creative
construction approach put forward by Agarwal, et al. (2007) that identifies knowledge
spillovers as a key mechanism underlying new venture formation and development at a
micro level, as well as economic growth at a macro level (this is what is known as the
knowledge spillover view of strategic entrepreneurship (KSSE)). However, these
attempts have not been able to offer a solid empirical test of how firms actually identify
and combine entrepreneurial action with strategic action that generates competitive
8
advantage (Agarwal, et al., 2007; Schindehutte and Morris, 2009; Foss and Lyngsie,
2011). The strategic management field is still trying to resolve conceptual and empirical
complexities of defining and measuring competitive advantage of firms (Durand, 2002;
Tang and Liou, 2010) while the entrepreneurship field still debates whether
entrepreneurial opportunities are created or recognized (Alvarez and Barney, 2007).
Nevertheless, these debates and conversations are particularly common when a field is
in its infancy stages (as SE is) and without a clear research paradigm (Ireland, 2007).
The field requires additional scholarly attention and identification of its contributions.
The establishment of a new journal on strategic entrepreneurship (namely the Strategic
Entrepreneurship Journal (SEJ)) tried to do just that. The scholarly articles appearing in
SEJ seeking to engage in the development and establishment of SE are increasing
numbers (Mathews, 2010) and impact. However, an increasing number of scholarly
contributions is facilitating the continuing development of an emerging research
paradigm (Ireland, 2007).
The Importance of Strategic Entrepreneurship
As firms continue to operate in increasingly dynamic, complex, and global competitive
environments, the issue of uncertainty about future market conditions is becoming
increasingly important (especially in fast moving industries such as high technology).
Many industries across the world have experienced and will experience severe
exogenous shocks that can change how firms do business (or even cause firms to fail).
9
Examples of these include the Great Recession of 2008 that affected American
businesses as well as other firms and economies globally and various technological
revolutions such as the emergence of the World Wide Web (and subsequent dotcom
boom and bust) and the smartphone revolution (which took down Blackberry).
Strategic entrepreneurship can be a tool to help firms mitigate the problems associated
with uncertainty (Ireland and Webb, 2007; Ireland and Webb, 2009; Kyrgidou and
Hughes, 2010) and better prepare firms for future exogenous shocks, like the ones
listed above. After all, firms have no control over their external environment; however,
SE literature posits that firms who successfully balance exploration and exploitation
activities are better prepared to deal with changes in the external environment.
Engaging in strategic entrepreneurship enhances organizational decision makers’
awareness of the uncertainty associated with their firms’ efforts to be competitively
successful, while simultaneously continuing to rely on the firm’s current competitive
advantages as the foundation for future success (Ireland and Webb, 2009; Kyrgidou
and Hughes, 2010). To battle uncertainty, decision makers must maintain their firm’s
proactive focus on opportunity-seeking behavior (behavior through which potential
opportunities are identified as sources of future competitive success for the firm) while
concentrating on advantage-seeking behavior (behavior where current competitive
advantages are exploited and opportunities for future advantages are strategically
pursued).
10
Therefore, the strategic entrepreneurship field is a very timely and relevant field in
management studies. The field combines perspectives from entrepreneurship and
strategy not only to answer the question of how firms create wealth or value, but also
how firms can enjoy long-term success in an uncertain and dynamic business
environment.
11
METHODS
To provide a comprehensive literature review on the field of strategic entrepreneurship,
47 scholarly (peer-reviewed) papers were analyzed that were published between 2001
and 2014, inclusive. The year 2001 was chosen because it corresponds to the year
when Hitt, et al. (2001) first published the seminal article on strategic entrepreneurship
and established the concept’s significance in the literature.
This literature search will provide the basis discussions on definitions and descriptions
of SE, definition of boundaries of the construct, the evolution of the conceptualization of
SE, and the identification of gaps and future research directions for the field included
herein. The following describes the methods followed to analyze these papers.
Sampling Procedures
A series of keyword searches were conducted in two databases: (1) ProQuest’s
ABI/INFORM – Complete (Business) database and (2) EBSCO’s Business Source
Complete. These databases were chosen as they focus exclusively on articles
pertaining to business and management studies.
This approach is established in the studies conducting similar searches about
entrepreneurship concepts (e.g. Busenitz et al., 2003; Grégoire et al., 2011). The
primary reason for choosing two widely available databases including a broad array of
journals was to increases the external validity of the final sample of articles that will be
12
analyzed in this research. This is a more reliable and a more efficient way of searching
compared to a manual search through an arbitrary list of target journals.
The goal was to build an exhaustive list of literature that has the phrase “strategic
entrepreneurship” in either the title or the abstract of the paper (or both). This search
returned 51 papers.
A check was made to ensure that all the papers meeting the first criteria were indeed
discussing the strategic entrepreneurship concept, as first outlined by Ireland, et al
(2003), rather than simply using the phrase without actually referring to the construct. I
made this check by ensuring that at least one core SE paper1 was cited in the reference
section of these papers (usually Ireland, et al., 2003).
Also, some papers that used the phrase “strategic entrepreneur” or “strategic
entrepreneurs” were omitted – these papers are not referring to the SE construct, but
rather, refer to entrepreneurs acting strategically (as a descriptor). Others using the
phrase “strategic entrepreneur” were included in the list, as they did refer to the correct
concept.
One paper using the phrase “strategic entrepreneurial” (Shulman, et al., 2011) was also
omitted from analysis as it does not cite Ireland, et al. (2003) and does not refer to the
1 A core strategic entrepreneurship paper is that which describes or refines a conceptual framework for strategic entrepreneurship. Ireland, et al. (2003) and Kyrgidou and Hughes (2010) are two examples.
13
construct in question. Another paper using the phrase “strategic entrepreneurial”
(Sharma, 2011) is simply an introductory article for an issue of a journal that focuses on
strategic behavior in a family business context, but does not discuss the SE construct.
Dhliwayo (2014) was omitted because the paper introduces and discusses a model for
a different construct (entrepreneurial competitive strategy) albeit using “strategic
entrepreneurship” in its abstract. Also, papers using the phrase “strategic
entrepreneurship” without referring to the SE construct (i.e., Zvirblis and Buracas, 2011)
were omitted from analysis. Also, Messeghem (2003) was omitted from analysis as it
uses “strategic entrepreneurship” in the title of the paper, but details an empirical study
that analyzes the relationship between SME managerial practices and their
entrepreneurial orientation – a related, but different, construct.
Lastly, Ketchen, et al. (2014)’s discussion on creating a research agenda for the
informal economy for the SEJ was omitted, as this article simple discusses future
research opportunities and gaps for the this very specific topic, rather than contributing
to the strategic entrepreneurship field (by identifying overall field gaps, for example).
Only scholarly papers from peer-reviewed journals (specifically journals listed in the
Association of Business School (ABS) Academic Journal Quality Guide – Version 4) are
included in this analysis. The main reason is to ensure that the journals included in the
analysis are only those that focus on publishing and disseminating the results of
academic research and scholarship. Works excluded from this analysis include (but are
14
not necessarily limited to): working papers, theses and dissertations, trade journal
articles, conference papers, book reviews, and magazine articles.
Google Scholar was used to double-check the exhaustiveness of the literature search of
the two above databases, as it easily provides the ability to search for papers citing a
particular paper. For example, a search of papers citing Ireland, et al. (2003) that may
potentially meet the criteria stated above was conducted. This search returned three
papers omitted from both the ABI Inform and EBSCO searches (Yan and Hu, 2008;
Lumpkin, et al., 2011; Obeng, et al., 2012).
For the first database (ABI/INFORM), a search was built using the following criteria: the
phrase “strategic entrepreneurship” must appear in either the title or the abstract of the
paper (or both). Initial search results totaled 84 results. By filtering results to display
scholarly journals only, there were 58 results.
For the second database (EBSCO), a search was built using the phrase “strategic
entrepreneurship.” Initial search results from scholarly journals totaled 47 results
(without additional filters).
Google Scholar results, after manually compiling and filtering the list, totaled 47 papers.
As previously mentioned, three papers from the Google Scholar search were not
included in the EBSCO or ABI Inform search results. The purpose of the Google
15
Scholar search was to catch any papers meeting the aforementioned criteria not found
by the other two databases.
All three lists of results were checked against each other to reconcile duplicates and
eliminate papers that did not meet the criteria. A final list of 47 scholarly papers about
strategic entrepreneurship that included the phrase “strategic entrepreneurship” in the
title and/or abstract was compiled and analyzed.
Literature Search Results
Of the 47 scholarly papers that met the criteria, 20 were empirical studies (16
quantitative and 5 qualitative) and 27 were theory papers, all written between 2001 and
2014 (inclusive). The fact that theory papers exceeded empirical papers is not
surprising, considering the newness of the strategic entrepreneurship field (and
ambiguity over its boundaries), resulting in a limited empirical history. Appendix A has
the full list of 47 academic papers analyzed.
Figure 1 shows a breakdown of the journals in which the analyzed papers were
published. The graph shows a fair spread of articles over a variety of journals, with the
Strategic Entrepreneurship Journal (34%) and Entrepreneurship Theory and Practice
(15%) taking the majority.
16
Figure 1. Breakdown of Analyzed Papers by Journal
Figure 2 shows the percentages of SE publications analyzed in strategy,
entrepreneurship, and other disciplines (as determined by journal topic types). Of the
nine topic areas identified, strategic entrepreneurship took the lead (34% of the papers
17
analyzed), entrepreneurship came in second (23%), and general management came in
third (15%). Strategy was the fourth most popular category (9%), but most of the
literature analyzed came from the latter three areas.
Figure 2. Breakdown of Analyzed Papers by Field
18
Figure 3 shows frequency of SE publications per year in academic journals from 2001
to 2014. The number of publications from 2001 to 2006 were not notable, with a
considerate spike in 2007 (probably because the SEJ was established that year).
Figure 3. Frequency of Strategic Entrepreneurship Publications from 2001-2014
Overall, 11 papers analyzed emerged out of the entrepreneurship domain, while only
four of the papers analyzed emerged out of strategy (i.e. strategic management). The
Strategic Entrepreneurship Journal published the most of the analyzed papers (16
total), making it the most popular field in the analysis. The field did not seem to gain
popularity until 2007, which featured a surge of papers published on the topic because
of the establishment of the SEJ.
1!0!
1! 1! 1! 1!
10!
1!
11!
7!
5! 5!
3!
0!
2001!2002!2003!2004!2005!2006!2007!2008!2009!2010!2011!2012!2013!2014!
19
GENERAL DISCUSSION
The Origins and History of Strategic Entrepreneurship
While strategic entrepreneurship itself has a relatively short history, the construct
originates from research traditions several decades in the making.
SE has its earlier roots in the field of economics (Kyrgidou and Hughes, 2010) with the
works of Joseph Schumpeter in the 1930s (then later in the field of management with
constructs such as corporate entrepreneurship and entrepreneurial orientation in the
1990s). Schumpeter (1942)’s writings on creative destruction, where industrial and
market dynamics “destroy” old business models and new ones emerge from innovative
entrepreneurial firms and less-innovative incumbents are replaced and a higher degree
of economic growth is achieved in the longer term, have greatly influenced the domain
of entrepreneurship. In Schumpeter (1942)’s framework, entrepreneurship refers to the
creation of new productive resource combinations through the act of innovation. The
Schumpeterian definition also views entrepreneurship contextually as the key factor
leading to fundamental shifts in entire production systems, thus implicitly making
entrepreneurship a fundamental strategic consideration for all types of organizations
(Kyrgidou and Hughes, 2010). Therefore, Schumpeter’s work suggests that continued
adherence to existing strategic frameworks in a performance-maximizing manner is
unsustainable and inadequate for guaranteeing the long-term profitability of a firm. The
Schumpeterian tradition is featured in studies that focus on entrepreneurship as a way
20
of describing and characterizing a firm’s actions. For value creation, entrepreneurial
firms focus on innovative, proactive and risk-taking behaviors conducive to the
formation of new business models and organizational forms (Lumpkin and Dess, 1996).
With contemporary origins in corporate entrepreneurship, the concept of applying
entrepreneurial actions or intentions within a large organizational context is nothing
new. Burgelman (1983) proposes “strategic corporate entrepreneurship” as an early
conceptual integration of administrated (”bureaucratic,” or corporate) economic activity
and entrepreneurial economic activity. He even provides a conceptual framework for his
theory. He empirically examined the relationship between strategic management and
entrepreneurship in large firms. Burgelman (1983) also provides a set of guidelines for
organizations to employ strategic corporate entrepreneurship. He emphasizes middle
managers as important in implementing strategic corporate entrepreneurship – an
emphasis that is echoed later in some recent SE literature (i.e. Ireland and Webb,
2007).
Other earlier studies explore the relationship between strategic management and
entrepreneurship. Zahra (1991) and Zahra and Covin (1995) led empirical studies to
prove a correlation between corporate entrepreneurship and firm performance. This
connection is echoed in seminal theoretical strategic entrepreneurship literature as well
– although no strong empirical foundation supporting the connection between SE and
improved firm performance currently exists. Luke and Verreynne (2006) and Luke, et al.
21
(2011) are two of the few empirical studies within the SE field and the only studies that
seek to create an empirically supported and driven framework for strategic
entrepreneurship. Nevertheless, both studies confirm the existence of SE within an
applied business setting (in this case, public enterprises) – an important first step in
advancing the field empirically.
Research on entrepreneurial orientation in the 1990s and 2000s has also provided
some basis for the SE construct. Corporate entrepreneurship (CE) is one conceptual
antecedent of strategic entrepreneurship. Barringer and Bluedorn (1999) wrote a
heavily-cited paper on the intersection between corporate entrepreneurship and
strategic management – a concept that anticipates strategic entrepreneurship (as the
intersection between entrepreneurship and strategic management). As Kyrgidou and
Hughes (2010) put it, “managers must maximize the pursuit of new business
opportunities while simultaneously maximizing the generation and application of
temporary competitive advantages to sustainably create organizational value. It is this
key management problem that has led to convergence in studies of entrepreneurship
(opportunity-seeking behavior) and strategic management (advantage-seeking
behavior); and strategic entrepreneurship …[is] a new concept [developed] to examine
this convergence.”
Shane and Venkataraman (2000) built on the Schumpeterian tradition by emphasizing
that entrepreneurship is a “nexus” that involves entrepreneurial individuals seizing and
22
exploiting lucrative opportunities. They described the field as “involv[ing] the study of
sources of opportunities; the processes of discovery, evaluation, and exploitation of
opportunities; and the set of individuals who discover, evaluate, and exploit them”. This
description highlights the importance of opportunity identification in value creation.
Furthermore, scholars agree that opportunity identification and pursuit needs to be
integrated in a strategic framework in order to lead to value creation (Luke and
Verreynne, 2006; Schindehutte and Morris, 2009; Kyrgidou and Hughes, 2010; Van
Rensburg, 2013).
In fact, for decades, scholars have noted the complementarities between the strategy
and entrepreneurship domains. Schendel and Hofer (1979) argued that “the
entrepreneurial choice is at the heart of the concept of strategy.” Stevenson and Jarillo
(1990) called for the establishment of clear links between the fields of entrepreneurship
and corporate management within a concept they termed “entrepreneurial
management”. Barringer and Bluedorn (1999) studied the relationship between
entrepreneurial intensity and five strategic management practices, finding statistically
significant results for the impact of scanning intensity, planning flexibility, locus of
planning, and strategic controls, proving a logical connection between entrepreneurship
and strategic management. Meyer and Heppard (2000) edited the first scholarly book
addressing the interface between entrepreneurship and strategy to uncover the
components of a firm’s entrepreneurial ‘dominant logic’ independent of firm size. In
essence, for decades, scholars have been discussing intersections between the
23
entrepreneurship and strategic management domains, leading up to the genesis of the
strategic entrepreneurship field.
Others have developed other related concepts to strategic entrepreneurship as
conceptual antecedents to the construct. Mintzberg (1973) first introduced the notion of
entrepreneurial strategy-making. Miller (1983) first described the concept of an
entrepreneurial firm. Pinchot (1985) introduced the concept of an “intrapreneur” as the
entrepreneur active within a large firm. Then Covin and Slevin (1989) coined the term
“entrepreneurial strategic posture,” defining it as a firm’s competitive orientation on a
spectrum from conservative to entrepreneurial. McGrath and MacMillan (2000)
integrated the thinking from both fields to develop the entrepreneurial mindset concept,
arguing that those with an entrepreneurial mindset passionately seek new opportunities
(i.e. entrepreneurship) but they also pursue only the best opportunities and then pursue
those with discipline (i.e. strategic management).
One major conceptual antecedent of strategic entrepreneurship is Lumpkin and Dess
(1996)’s construct of entrepreneurial orientation (EO). The dimensions of EO build on
Schumpeterian economic tradition, Covin and Slevin (1989), and Covin and Slevin
(1991). SE shares many parallels with the entrepreneurial orientation (EO) construct.
For example, in that increased EO within a firm ultimately leads to increased wealth
creation (i.e. firm profitability) (Lumpkin and Dess, 1996; Dess and Lumpkin 2005), just
as SE is posited to lead to long-term value creation. In fact, EO is a concept later
24
echoed in Ireland, et al. (2003)’s framework as “entrepreneurial mindset,” one of the
four essential components of strategic entrepreneurship.
Additionally, earlier work on the exploration/exploitation tradeoff “predicts” the formation
of the SE construct (e.g. March, 1991), as this tradeoff is central to the strategic
entrepreneurial process (Ireland and Webb, 2009). Organizational ambidexterity, or an
organization’s ability to be aligned and efficient in its management of today’s business
demands while simultaneously being adaptive to changes in the environment (Raisch
and Birkinshaw, 2008), is a similar construct to exploration and exploitation within SE
and emerges from exploration/exploitation literature previous to the emergence of SE
literature.
The Genesis of the Strategic Entrepreneurship Field
According to Van Rensburg (2013), Herbert and Brazeal (1989) were the first to
introduce the term “strategic entrepreneurship” in a conference paper. The strategic
entrepreneurship field was born with a dedicated 2001 special issue on strategic
entrepreneurship in the Strategic Management Journal with Hitt, et al. (2001)’s article,
“Strategic entrepreneurship: entrepreneurial strategies for wealth creation.” However,
the field only gained academic legitimacy and status with the creation of the Strategic
Entrepreneurship Journal (SEJ) in 2007.
25
Ireland et al. (2001) viewed strategic management as a context for entrepreneurial
actions and introduced strategic entrepreneurship as the intersection between
entrepreneurship and strategy. Hitt, et al. (2001) suggested that strategic
entrepreneurship (a new construct) is entrepreneurial action with strategic perspective,
involving the integration of entrepreneurial (i.e., opportunity- seeking behavior) and
strategic (i.e., advantage- seeking) perspectives in developing and taking actions
designed to create wealth. As the construct has developed over the past decade or so,
many different theoretical frameworks have been brought forth, presenting inconsistent
and changing dimensions of the construct (Luke, et al., 2011). These different
conceptualizations will be analyzed and discussed in later sections.
Earlier papers on SE emphasize that the appropriate application of SE can lead to value
creation (e.g. financial or otherwise) within firms (Hitt, et. al 2001; Ireland et. al. 2001;
Ketchen, et. al. 2007). Empirical studies explicitly linking SE to increased value creation
(such as those for corporate entrepreneurship discussed above; i.e. Zahra, 1991; Zahra
and Covin, 1995) have yet to be published.
In essence, the concept of strategic entrepreneurship highlights the complementarities
within strategy and entrepreneurship (Agarwal, et al., 2010). “Strategic” can be defined
as “that which relates to the long-term prospects of the company and has a critical
influence on its success or failure,” while “entrepreneurship” has found its most
enduring definition in the Schumpetarian notion of the creation of new products,
26
processes, markets, and organizational forms (Agarwal, et al., 2010). The field of
entrepreneurship and its formation is discussed in the next section.
Key Points
Strategic entrepreneurship emerges from economic, entrepreneurship and strategy
research traditions that are several decades in the making.
The relationship between strategic management and entrepreneurship has been
studied for many years, but strategic entrepreneurship is the first construct to explicitly
describe an integration of the knowledge and questions of both fields and lead to the
subsequent creation of a brand new field straddling both domains.
27
THE FIELD OF STRATEGIC ENTREPRENEURSHIP
Nag, et al. (2007) described strategic management as a relatively young academic field
“whose consensual meaning might be expected to be fragile, even lacking.” This exact
description can be applied to strategic entrepreneurship, a young and emerging
academic field requiring stricter boundary definitions and a stronger empirical
foundation. SE has also experienced many reconceptualizations (discussed in a later
section), just like strategic management.
An academic field is a socially constructed entity (Kuhn, 1962) and the body of
knowledge that constitutes a field is a socially constructed product (Astley, 1985). In
comparison to a formal organization, an academic field has socially negotiated
boundaries and only exists if a critical mass of scholars believe it to exist and adopt a
shared conception of its essential meaning (Astley, 1985). Shared meaning is not
assured, as consensus may become diluted or blurred for several reasons, including:
heterogeneity of members’ training, the intellectual pull and hegemony of adjacent
fields, and an ever-shifting body of knowledge and theory (Astley, 1985; Nag, et al.,
2007). However, the following discussion will show that certain milestones in the history
of strategic entrepreneurship provide evidence supporting the existence of consensus
among scholars for the existence of the field.
The establishment of a top-tier academic journal for the field is one such milestone and
could represent Astley (1985)’s notion of “critical mass.” The Strategic Management
28
Society (SMS) established the Strategic Entrepreneurship Journal (SEJ) in 2007 as a
sister publication of the Strategic Management Journal (SMJ; a top-tier management
journal) to fill a gap that existed in the coverage of the intersection and integration of
entrepreneurship and strategic management and to expand on the natural relationships
that exists between the two domains (Schendel and Hitt, 2007). The SMS posit that the
SEJ is positioned to fill the gap that exists by “expanding and developing the natural
relationship that exists between strategic management and entrepreneurship,” and will
do so with a level of scholarship and quality matching other top quality journals by using
the same high standards of the SMJ (Schendel and Hitt, 2007).
The first issue included an introduction by Schendel and Hitt (2007) that outlined the ten
key topic areas on which the journal will focus; these focus areas evolved out of the six
original domains proposed by Ireland, et al. (2001). These focus areas are:
1. Strategy vs. entrepreneurship
2. Creativity, imagination, and opportunities
3. Risk and uncertainty
4. Innovation
5. Change
6. Technology
7. Entrepreneurial actions, innovation, and appropriability
8. Behavioral characteristics of entrepreneurial activity
9. Entrepreneurship and economic growth
29
10. Social role of entrepreneurship
In essence, Schendel and Hitt (2007) defined the field using these ten broad subject
areas, although “defining the field in this way in an important sense avoids defining the
field – it provides little or no guidance to young scholars interested in contributing to an
emerging field, as it is unclear as to what is and not included within those field
boundaries” (Schendel and Hitt, 2007). However, these ten themes represent a
consensus among SE scholars as to what research in the field should look like, as well
as agreement that such a field indeed exists. The ten themes shall frame this paper’s
discussion on SE’s definition, boundaries, and nature, as well as the discussion on the
current state of research within the field and research gaps.
Furthermore, the citation counts of foundational SE articles such as Ireland, et al.
(2001), Hitt, et al. (2001), and Ireland, et al. (2003) are all in the several hundreds (the
second milestone for the field), meaning that these articles have had a significant
impact in management studies and point towards a consensus among scholars for
legitimacy of the field and construct.
A comprehensive review of existing conceptual frameworks and definitions of strategic
entrepreneurship contained in this paper reveals that the field is still growing,
accelerated by the establishment of the SEJ. Although some posit that strategic
entrepreneurship is a synonym for the better empirically-supported corporate
30
entrepreneurship, a valid and reliable empirical support-base for SE could help
differentiate the construct from CE, as SE is a unique concept (demonstrated in later
sections).
Integration of Strategy and Entrepreneurship
The SE field integrates theory and research from multiple disciplines – particularly from
entrepreneurship and strategic management. The implications of the SE construct are
important for scholars and managers alike for a better understanding of how firms
identify and exploit entrepreneurial opportunities, establish and sustain competitive
advantages, and create wealth (Ireland, et al., 2003). Entrepreneurship and strategic
management have been argued to explore complementary questions (Boone, et al.,
2013), and the symbiotic relationship between the two facilitates understanding of firms’
wealth-creating abilities (Ireland, et al., 2003; Ireland, 2007; Ireland and Webb, 2007).
This relationship is argued to exist because determining how firms adapt to
environmental change as a path to recognizing and exploiting opportunities created by
uncertainties and discontinuities is of central interest to each domain (Hitt, et al., 2001;
Ireland, 2007). There is less agreement among scholars regarding the degree to which
the domain is concerned directly or explicitly with explaining firms’ wealth-creating
abilities (Ireland, 2007).
Entrepreneurship is concerned with questions involving the search for competitive
advantages at entry, whereas strategic management studies focus primarily on the
31
sustainability of a competitive advantage over time. Scholars have begun investigating
the questions central to both strategy and entrepreneurship, including the formation of
new ventures, the origin and development of firm capabilities, strategic renewal efforts
of incumbents, and the dynamics of innovation and macroeconomic growth (Agarwal, et
al., 2010), but the SE field provides a much more specific and direct platform for this
sort of research.
Foss and Lyngsie (2011) note that SE appears to have dropped strategy’s search for
the conditions of single, sustainable competitive advantage, and instead focuses on the
entrepreneurial pursuit of a string of temporary advantages under the label of “wealth
creation.” Kyrgidou and Hughes (2010) hypothesize that managers must maximize the
pursuit of new business opportunities while simultaneously maximizing the generation
and application of temporary competitive advantages to sustainably create
organizational value. They suggest that this key management problem has led to the
convergence in the studies of both entrepreneurship (opportunity-seeking behavior) and
strategic management (advantage-seeking behavior) into the field of SE. SE research
has identified a large set of variables that may drive such firm-level entrepreneurship,
for example, borrowing (from strategic management) notions of “strategic intent” or
(from entrepreneurship) “entrepreneurial orientation.” Therefore, strategic
entrepreneurship emerges from the need to bridge both entrepreneurial and strategic
perspectives (Boone, et al., 2013) for successful performance, as noted by earlier
scholars (i.e. Stevenson and Jarillo, 1990).
32
Therefore, strategic entrepreneurship emerges from the notion that there is a logical
intersection between the two domains and deals with the “identification and exploitation
of opportunities while simultaneously creating and sustaining a competitive advantage”
(Kuratko and Audretsch, 2009). The intersection of entrepreneurship research
(opportunity seeking) and strategic management research (advantage seeking),
therefore, constitutes the new field. It deals with the actions a firm undertakes in
exploiting new innovations, which result from the firm’s efforts to continuously explore
opportunities (Ireland and Webb, 2007). SE literature integrates entrepreneurship and
strategy research to study the antecedents, effects, and mechanisms of exploring and
exploiting behaviors and suggests “the existence of positive performance effects
derived from the balanced application of these strategies” (Hitt, et al., 2011; Ireland, et
al., 2003; Hitt, et al., 2011; Siren, et al., 2012).
In essence, the SE field provides a venue for scholars to combine knowledge from both
disciplines to carry out studies that examine how firms create wealth and/or value.
Wealth (or value) creation is central to both strategy and entrepreneurship and is the
major connecting point between the two fields and consequently serves as the focus of
the strategic entrepreneurship field. In other words, strategic entrepreneurship
integrates knowledge from both disciplines to provide a richer understanding of how
firms can create wealth. After all, it can be argued that value creation is the primary
phenomenon that is of interest to organizational scholars (Ireland, 2007).
33
Key Points
The creation of the Strategic Entrepreneurship Journal (SEJ) in 2007 officially
established and legitimized strategic entrepreneurship as an academic field of study
within management studies. Schendel and Hitt (2007) outlined ten key topic areas that
provide a loose definition for the field.
The strategic entrepreneurship field emerges from the recognition that both strategy
and entrepreneurship seek to answer many of the same questions and the notion that
there is a logical intersection between the two domains. Thus, this field provides
scholars a venue to combine knowledge from both disciplines to gain a richer
understanding of how firms create wealth or value.
Wealth creation is central to both strategy and entrepreneurship and is the major
connecting point between the two fields and consequently serves as the focus of the
strategic entrepreneurship field.
In essence, strategic entrepreneurship as a construct is derived from the logical
intersection and integration of both entrepreneurship and strategy disciplines,
combining the knowledge from both academic research streams, as both fields seek to
answer many of the same research questions.
34
THE FOUR QUESTIONS
Boundaries of Strategic Entrepreneurship
To preface this part of the discussion, the arguments made herein (just as in the “Field”
section) operate from the premise that the body of knowledge that constitutes
administrative science is a socially constructed product (Astley, 1985). As such,
consensus among scholars is the primary driver of the existence of new constructs,
new fields of research, or new paradigms within management studies. In other words,
consensus drives the legitimacy of a new field and construct such as strategic
entrepreneurship. Therefore, consensus as the standard by which one could determine
academic field or construct legitimacy shall form the basis for the discussion of the
boundaries of the SE field and related construct.
Additionally, it is important to note that while some scholars take a narrower view on
defining strategic entrepreneurship (i.e. they define SE as a subdomain of corporate
entrepreneurship (which lies firmly in the domain of entrepreneurship) that includes
entrepreneurial activities that do not necessarily include the creation of new business
units, such as strategic renewal, sustained regeneration, domain redefinition,
organizational rejuvenation, and business model reconstruction (Sharma and Chrisman,
1999)), this research assumes a broader view on SE (as proposed by Ireland, et al.,
2003). This broader view puts SE at the intersection of the fields of strategy and
entrepreneurship, integrating perspectives and knowledge from both fields (see “Where
35
Does Strategic Entrepreneurship Fit?”). This section will explain how this broader view
is overwhelmingly supported by the extant literature.
As a Separate Field of Study
In a special issue of the Strategic Management Journal (SMJ), Hitt, et al. (2001)
described strategic entrepreneurship as “entrepreneurial action with a strategic
perspective.” In short, strategic entrepreneurship is the integration of entrepreneurial
behavior (i.e., opportunity- seeking) and strategic mindset (i.e., advantage- seeking) in
developing and taking value-creating actions. Hitt, et al. (2001)’s paper can be seen as
the culmination of the literature discussing the possibility of an intersection between
strategic management and entrepreneurship before it (i.e. Burgelman, 1983; Covin and
Slevin, 1989; Zahra, 1991; Barringer and Bluedorn; Covin and Miles, 1999; Ireland, et
al., 2001). Hitt, et al. (2001) argue that firms need to strategically leverage
entrepreneurial to sustain a competitive advantage (Foss and Lyngsie, 2011). Thus, a
firm’s strategic intent must be to continuously discover and exploit entrepreneurial
opportunities, in order “to continuously create competitive advantages that lead to
maximum wealth creation” (Kuratko and Audretsch, 2009; Kyrgidou and Hughes, 2010;
Hitt, et al., 2011; Foss and Lyngsie, 2011).
In essence, Hitt, et al. (2001) established strategic entrepreneurship both as a field of
study and as a specific construct (Kyrgidou and Hughes, 2009; Foss and Lyngsie,
2011), although a great deal of work prior to 2001 eventually led to the creation of the
36
field. The emergence of the SE field is in response to research gaps in the neighboring
fields of entrepreneurship and strategic management (Hitt, et al., 2011; Ireland, et al.,
2003; Foss and Lyngsie, 2011). Hitt, et al. (2001) describes how the fields of strategic
management and entrepreneurship have “both focused on how firms adapt to
environmental change and exploit opportunities created by uncertainties and
discontinuities in the creation of wealth.” They present strategic entrepreneurship as an
important concept suggesting that new ventures and established firms need to be
simultaneously entrepreneurial and strategic. They also suggest that firms require
certain types of critical resources and capabilities to achieve this integration and to
create wealth.
The question of how firms create and sustain a competitive advantage (emerging from
the strategic management academic tradition) while simultaneously identifying and
exploiting new opportunities (from the entrepreneurship academic tradition) is “at the
heart” of strategic entrepreneurship research (Siren, et al., 2012).
Meyer and Heppard (2000) argue that strategic and entrepreneurial thinking are
inseparable, as insights from strategic management cannot be understood without an
understanding of the insights from entrepreneurship, and vice versa. Hitt, et al. (2001)
argue that entrepreneurial and strategic perspectives should be integrated to examine
entrepreneurial strategies that create wealth and deem this approach “strategic
entrepreneurship.” Therefore, the field of strategic entrepreneurship emerges from the
37
understanding that strategic management provides context for entrepreneurial actions,
and value creation is at the heart of both entrepreneurship and strategic management.
In fact, other scholars previous to Hitt, et al. (2001)’s paper have called for an
integration of strategic and entrepreneurial thinking. Entrepreneurship and strategic
management discuss value creation with different focuses and viewpoints, but
combining the two disciplines’ perspectives can provide a deeper understanding of how
firms can create and achieve wealth, hence the emergence of strategic
entrepreneurship as a field of study. Hitt, et al. (2001) submit that strategic
entrepreneurship can provide entrepreneurship with a commonly accepted and well-
developed paradigm for research in the field, but also submit that the integration of
theory and research from the two fields can enrich the research and practice of both
strategic management and entrepreneurship.
Ireland, et al. (2003) built on Hitt, et al. (2001)’s early definition of the SE field and
construct. They suggest that firms create wealth by identifying opportunities in their
external environments and then developing competitive advantages to exploit them.
They conclude that strategic entrepreneurship results from the integration of
entrepreneurship and strategic management knowledge, and the field’s primary
purpose is to help advance the understanding of how firms create wealth (new ventures
and established firms alike).
38
The central idea of the field is opportunity-seeking behaviors and advantage-seeking
behaviors – the former as the central subject of entrepreneurship and the latter as the
central subject of strategic management (Foss and Lyngsie, 2011). This emerging field
itself is very young, existing for little more than a decade, culminating in the
establishment of the Strategic Entrepreneurship Journal (SEJ) in 2007 – the first formal
top-tier journal dedicated to advancing the SE field. The establishment of the SEJ is the
singular major event that legitimized SE as a valid academic field of research. This
event is a sign of a consensus among influential scholars that strategic
entrepreneurship is not only an important construct to study, but also a an important
and legitimate field of study that needs a separate journal to help advance the field.
After all, the Strategic Management Society (SMS) established the SEJ and are the
same group that established the Strategic Management Journal, a top-tier business
journal held in high regard.
Hitt, et al. (2001) further posit that the integration of the theoretical perspectives from
strategic management and entrepreneurship will help develop a commonly accepted
and well-developed paradigm for entrepreneurship, as they submit that this field of
study currently enjoys no such paradigm. They also posit that the integration of
entrepreneurial thinking benefits strategic management. Firms that do not engage in
“dreaming, exploring, creating, pioneering, and inventing” risk other firms taking their
“markets, customer, best employees, …their assets”, (Hitt, et al., 2001) and ultimately,
their profits. Firms require certain types of critical resources and capabilities to achieve
39
this integration and to create wealth (for example, slack resources) (Ireland, et al.,
2003).
Although the SE field is still extremely young, progress has been made in defining a
research agenda that seeks to merge the opportunity seeking perspective of the
entrepreneurship literature with the advantage seeking perspective of strategic
management (Foss and Lyngsie, 2011). The establishment of the SEJ has further
clarified the research agenda of the field, with the aforementioned ten key topic areas of
interest (see previous sections) outlined in Schendel and Hitt (2007)’s introduction to
the first edition of the journal. Foss and Lyngsie (2011) submit that the field’s research
agenda has been established because the phenomenon of interest (i.e. the dependent
variable) as firm value creation has been defined, as well as scholars beginning to
analyze various antecedents in terms of variables such as entrepreneurial orientation
and other firm-level variables that capture the firm’s motivation and ability to engage in
the discovery of opportunities and the exploitation of those opportunities that are
highest in value creation.
As a Construct
While Ireland, et al. (2003) clearly define the strategic entrepreneurship construct in
relation to itself, its place in the field of strategic management (SM) and entrepreneurial
studies and in relation to other constructs (such as corporate entrepreneurship,
40
intrapreneurship, and entrepreneurial orientation) has not yet been clearly defined or
determined.
Although the discussion and elaboration of key elements of strategic entrepreneurship’s
definition provided in one of the coming sections is an extremely important intellectual
exercise in the analysis of the nature of the SE construct and its description, a review of
the literature suggests that the boundaries of strategic entrepreneurship must also be
defined to establish its place within the domains of entrepreneurship and strategic
management, respectively. This is especially relevant since there has been great
discussion among scholars on whether strategic entrepreneurship and corporate
entrepreneurship (a construct with a much longer academic tradition) are referring to
the same domain (Meyer, 2009; Schindehutte and Morris, 2009; Van Rensburg, 2013).
The boundaries and parameters of SE remain largely unspecified (Schindehutte and
Morris, 2009; Klein, et al., 2013). Thus, the following discussion will clarify the
boundaries of SE, both within respect to entrepreneurship and strategic management
and in relation to other constructs, such as corporate entrepreneurship.
As a construct, SE also has a relatively short research history, although several
scholars have come up with different domains and conceptual frameworks (even a
couple of qualitative empirical studies testing conceptual frameworks) in attempt to
define and describe the components and antecedents of strategic entrepreneurship
within a firm (an overview and analysis of these different frameworks and
41
conceptualizations is included in a later section.) Hitt, et al. (2001) posit that strategic
entrepreneurship is “an important concept suggesting that new ventures and
established firms need to be simultaneously entrepreneurial and strategic.” Ireland, et
al. (2003) firmly argue that SE is a distinctive and unique construct through which firms
can create wealth and that SE also contributes to the understanding of how firms can
create wealth. This research posits that early research efforts to differentiate SE as a
unique construct do not adequately describe its distinctive dimensions; thus, this
research identifies the five critical dimensions of SE to better explicate it as a unique
construct. In essence, Ireland, et al. (2003) submit that SE is a very important construct
for scholars and managers to contribute to a better understanding of how firms identify
and exploit entrepreneurial opportunities, establish and sustain competitive advantages
and create wealth.
Ketchen, et al. (2007) give these four main assertions about the nature of strategic
entrepreneurship. This rest of this section will build on these assertions to provide
clearer boundary definitions for the construct. First, strategic entrepreneurship, as a
field, is the melding of the strategy and entrepreneurship domains. Secondly, firms
pursuing engage in both the opportunity-seeking activities required by entrepreneurship
and the advantage-seeking activities required by strategy. Firms desiring to create
wealth on a continual basis cannot rely exclusively on the activities associated with
either entrepreneurship or strategy. The reason for this is that actions taken to
implement a chosen strategy enable a firm to extract value from existing domains. As
42
such, these actions foster value creation in the short run. Third, an appropriate
managerial mindset is required in a firm that wishes to employ strategic
entrepreneurship. Finally, strategic entrepreneurship requires a continuous flow of
innovations.
The following subsections will also show that strategic entrepreneurship promotes long-
term value creation; not just short-term performance gains, as suggested by Ketchen, et
al. (2007) above. But continuous innovation is still one of the keys to successful
strategic entrepreneurship. The most important element missing from the above
description of SE is that SE is the continuous balance of opportunity-seeking and
advantage-seeking behaviors, as supported by other extant (Ireland, et al., 2003;
Ireland and Webb, 2009; Kyrgidou and Hughes, 2010; Hitt, et al., 2011).
Components of Strategic Entrepreneurship
Strategic entrepreneurship involves both the opportunity-seeking behavior that is largely
the province of corporate entrepreneurship (a subdomain of entrepreneurship), as well
as advantage-seeking behavior from strategic management. SE encompasses a set of
activities that allow firms to consistently and effectively manage their resources to
combat uncertainty in the external environment through the exploration of future
competitive advantages while exploiting current advantages (Ireland and Webb, 2009).
The exploration versus exploitation construct (March, 1991; Gupta, et al., 2006; Raisch,
et al., 2009) is an extremely important building block used for strategic
43
entrepreneurship. Exploration and exploitation behaviors are a distinct part of different
definitions and descriptions of SE (Ireland, et al., 2003; Ireland and Webb, 2007; Ireland
and Webb, 2009; Schindehutte and Morris, 2009; Kyrgidou and Hughes, 2010; Hitt, et
al., 2011; Kraus, et al., 2011). Strategic entrepreneurship combines the creative and
entrepreneurial qualities of exploration with the discipline of strategic exploitation
activities.
On top of the balance of opportunity-seeking (exploration) and advantage-seeking
(exploitation behaviors as a key feature of strategic entrepreneurship, the original
framework for SE as described by Ireland, et al. (2003) describes SE as having four
components:
1. An entrepreneurial mindset
2. An entrepreneurial culture and entrepreneurial leadership
3. The strategic management of resources and applying creativity
4. Developing innovation
Exploration and exploitation (i.e. organizational ambidexterity – the joint pursuit of
exploration and exploitation strategies) are the antecedents of the opportunity-seeking
and advantage-seeking behaviors mentioned in the original conceptual framework for
strategic entrepreneurship by Ireland, et al. (2003). The latter terminology is echoed in
other definitions given for SE, such as those by Hitt, et al. (2001), Ketchen, et al.
(2007), and Kyrgidou and Hughes (2010) (refer to Appendix B). Given the structural,
44
cultural, and operational differences between exploration and exploitation, another
tension associated with strategic entrepreneurship concerns the transition process
between exploration and exploitation. Ireland and Webb (2009) posit that the
differences in the activities of exploration and exploitation call for an additional
extensive, time-consuming, and resource-intensive transition process. After all,
exploration and exploitation are antagonistic processes in nature (Schindehutte and
Morris, 2009). However, prior empirical research supports the assertion of positive
performance impacts of ambidexterity, which bodes well for the possibility of future
empirical support for increased performance impacts from effective SE.
In other words, SE involves the effective integration of entrepreneurial actions and
strategic management actions to create wealth. SE allows those leading and managing
firms to simultaneously address the dual challenges of exploiting current competitive
advantages (the purview of strategic management) while exploring for opportunities (the
purview of entrepreneurship) for which future competitive advantages can be developed
and used as the path to value and wealth creation (Hitt, et al., 2011). Entrepreneurial
actions are those actions oriented to novelty; they are newly-fashioned behaviors
through which companies exploit opportunities others have not yet identified or explored
(Ireland, et al., 2001). In other words, entrepreneurial actions are a fundamental
behavior by a firm that allows them to move into new markets, gain new customers,
and/or combine existing resources in new and innovative ways (Ireland, et al., 2001).
Entrepreneurial actions are often regarded as an essential behavior to facilitate firm
45
survival in a rapidly-changing market environment (Ireland, et al., 2001) and to combat
uncertainty created by such an environment (Ireland and Webb, 2009). Hitt, et al.
(2011) suggest that successfully using SE challenges large, established firms to learn
how to become more entrepreneurial and challenges smaller entrepreneurial ventures
to learn how to become more strategic.
In other words, if entrepreneurship is understood as the identification and creation of
new opportunities, and if strategic management is understood as the transformation of
these opportunities into a sustainable competitive advantage, then entrepreneurial
opportunity seeking can also be regarded as strategic behavior with the aim of value
creation (Kraus, et al., 2011).
Strategy is the process of planning that emphasizes improved decision-making through
effectively managing resources within a framework of structures, systems and
processes (Kyrgidou and Hughes, 2010). Strategy is also considered a primary
advantage that differentiates entrepreneurial firms and creates organizational
excellence and can provide the context within which firms can exploit identified
opportunities through their current strategic platform and through structured strategic
actions, thereby aiding firms to specialize and gain competitive advantage. (Kyrgidou
and Hughes, 2010). Strategic actions are taken to select and implement the firm's
strategies. Often enough, many of these strategies are framed around the pursuit of
entrepreneurial opportunities by taking entrepreneurial actions (Ireland, et al., 2001).
46
Strategic actions provide the context within which innovations, which often are the
product of newly fashioned behaviors, are developed and commercialized. These action
types intersect; indeed, analysis of various aspects of this intersection is the focus of
this special issue. Successfully integrating entrepreneurial and strategic actions
improves a firm's ability to grow and create wealth. Finally, wealth creation is concerned
with developing sustainable income streams.
Entrepreneurial firms risk focusing excessively on opportunity recognition and risk-
taking activities; lacking a balanced strategic focus can then undermine the benefits and
value their entrepreneurial initiatives might generate. As such, they become incapable
of gaining the advantages that entrepreneurial behavior has to offer. Still, the excessive
formalization of firm organizing activity that strategy entails can create conditions that
restrict rapid adaptation to change and tolerance of frame-breaking ideas, which in turn
might prevent the firm from capturing the benefits that its entrepreneurial behavior could
create. Balancing entrepreneurship and strategic management through the use of
strategic entrepreneurship, consequently, can help firms avoid the trap of excessive
risk-taking activities while preventing inertia caused by iteratively adding to present
advantages (Kyrgidou and Hughes, 2010).
SE results from combining attributes of strategy and entrepreneurship. Here, the firm
combines exploration-oriented attributes with exploitation- oriented attributes to develop
consistent streams of innovation and to create and maintain competitive advantages
47
(Ireland and Webb, 2007). Thus, SE is concerned with actions the firm intends to take
to exploit the innovations that result from its efforts to continuously explore for
innovation-based opportunities (i.e., new organizational forms, new products, new
processes, etc.) (Ireland and Webb, 2007). An ability to anticipate and then properly
respond to environmental change is one of the important outcomes of effective SE. With
SE, the firm intends to rely on innovation and the exploitation of innovations as the
source of sustainable competitive advantages and effective responses to continuous
environmental changes (Ireland and Webb, 2007). Because “concentrating on either
strategy or entrepreneurship to the exclusion of the other enhances the probability of
firm ineffectiveness or even failure” (Ketchen et al., 2007; Hitt, et al., 2011), SE involves
both entrepreneurship’s opportunity-seeking behaviors and strategic management’s
advantage-seeking behaviors and is useful for all organizations, including family-
oriented firms (Webb, et al., 2010) and new ventures or smaller firms (Kyrgidou and
Hughes, 2010).
Strategic management and entrepreneurship are concerned with creating value and
wealth (Ireland, et al., 2001; HItt, et al., 2011; Ireland, et al., 2003; Hitt, et al., 2011).
Entrepreneurship contributes to a firm’s efforts to create value primarily by identifying
opportunities that can be exploited in a marketplace. In fact, Hitt, et al. (2001) define
entrepreneurship as “the identification and exploitation of previously unexploited
opportunities.” Strategic management (i.e. the full set of commitments, decisions, and
actions required for a firm to achieve strategic competitiveness and earn above-average
48
returns) contributes to value- and wealth-creation efforts primarily by forming the
competitive advantages that are the foundation on which a firm competes in a
marketplace (Ireland, et al., 2003; Hitt, et al., 2011). Therefore, entrepreneurship
involves identifying and exploiting opportunities (i.e. opportunity-seeking activities in
SE), and strategic management involves creating and sustaining one or more
competitive advantages as the path through which opportunities are exploited (i.e.
advantage-seeking activities in SE). Also, the effectiveness of strategic
entrepreneurship depends on how firms deploy competence exploration and
competence exploitation processes, described further below (Kyrgidou and Petridou,
2011). However, firms use different processes to explore and to exploit, a fact that
complicates efforts to balance exploration- and exploitation- oriented behaviors (Ireland
and Webb, 2009).
The entrepreneurial components of SE are entrepreneurial mindset and creating
innovation, as per Ireland, et al. (2003)’s framework. The strategic components are the
strategic management of resources and the execution of competitive advantage
(Kyrgidou and Hughes, 2010).
Opportunity-seeking or exploration (i.e. entrepreneurship) includes the set of activities
through which firms seek to recognize new ideas and opportunities that serve as the
foundation for future sources of competitive advantage (Ireland and Webb, 2009).
Creativity, experimentation, and a broad search of knowledge stocks beyond what is
49
captured in the firm’s existing competencies are examples of the activities that are a
part of the exploration process (March, 1991; Ireland and Webb, 2009). Investments in
processes promoting experimentation, play, and discovery are vital (Kygridou and
Petridou, 2011). Exploration activities have long-term outcomes; therefore, significant
uncertainty is associated with these activities. Therefore, the key to successful
exploration processes is being able to efficiently manage a breadth of resources while
managing the uncertainty that surrounds the potential effectiveness of the resources
(Ireland and Webb, 2009), as well as the firm’s ability to acquire new, diverse
knowledge and subsequently integrate it with existing knowledge (Ireland and Webb,
2007). Identifying ways to position a firm in one or more market spaces to deal with
environmental change is a key outcome sought through exploration (Ireland and Webb,
2007).
Advantage-seeking or exploiting activities (i.e. strategic management) include the
refinement, focusing, and efficiency-based routines that serve as the foundation for the
firm’s current sources of competitive advantage (Ireland and Webb, 2009). More
specifically, exploitation activities are used to incrementally enhance the firm’s existing
competitive advantages. These activities require investments in processes behind
exploitation, the refinement and improvement to augment the firm’s efficiency at
leveraging limited resources, and historical advantages (Kyrgidou and Petridou, 2011).
Because the firm is building on existing advantages, exploitation processes are
characterized by fewer and less influential sources of uncertainty; for example, the
50
market size and location may already be well known, or the technology base may be
accepted by suppliers, partners, and customers (Ireland and Webb, 2009). The key to
exploitation involves being able to efficiently manage a relatively narrow set of
resources to facilitate speed and accuracy while managing sources of uncertainty that
affect how the firm engages its competitors in marketplace battles (Ireland and Webb,
2007; Ireland and Webb, 2009). In essence, Ireland and Webb (2009) suggest that
exploration and exploitation have different operational, structural, and cultural attributes.
Innovation in Strategic Entrepreneurship
Hitt, et al. (2001) also suggest a strong interrelationship between innovation and
entrepreneurship; an entrepreneurial mindset (i.e. view to innovation) is required for
founding of new businesses and saving old ones. If firms employ strong innovative
programs to implement entrepreneurial strategies, they can create wealth. Ireland and
Webb (2007) suggest that continuous innovation is at the core of what firms are able to
achieve as a result of balancing exploitation and exploitation (i.e. SE). This continuous
innovation allows for increased firm performance and value creation, as well as the
creation and maintenance of successive competitive advantages to achieve this end.
Thus, SE is concerned with actions the firm intends to take to exploit the innovations
that result from continuous exploration for innovation-based opportunities (Ireland and
Webb, 2007).
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Many papers that conceptualize or describe SE discuss absolute importance of
innovation for strategic entrepreneurship (Ireland, et al., 2001; Hitt, et al., 2001; Ireland,
et al., 2003; Ketchen, et al., 2007; Ireland and Webb, 2007; Ireland and Webb, 2009;
Kuratko and Audretsch, 2009; Schindehutte and Morris, 2009; Kyrgidou and Hughes,
2010; Hitt, et al., 2011). Therefore, continuous innovation is a key component of
strategic entrepreneurship.
Innovation has long been part of the entrepreneurship domain and research tradition.
For example, Schumpeter’s classic work (1934, 1942) highlighted the importance of
creativity and innovation within the context of market dynamics. In his view, innovation
stimulates economic development, corporate growth, and wealth creation. Hitt, et al.
(2011) suggest that entrepreneurs create value by leveraging innovation to exploit new
opportunities and to create new product-market domains. Entrepreneurship literature
teaches us that there are at least two types of innovation in which firms can engage—
disruptive and sustaining (Christensen, 1997). Disruptive innovations introduce “new
ways of playing the competitive game”—ways that are different from and conflict with
current business models (Ireland, et al., 2003). Firms committed to disruptive
innovations seek to locate entrepreneurial opportunities to try to proactively influence
their competitive destiny rather than waiting to be influenced by the evolution of the
markets in which they compete (Ireland, et al., 2003). “Radical or disruptive innovation
is derived from identifying and exploiting entrepreneurial opportunities through new
52
combinations of resources to create new capabilities that lead to competitive
advantages” (Ireland, et al., 2003).
Incremental or sustaining innovation is the product of learning how to better exploit
existing capabilities that contribute to competitive advantages. Sustaining innovation.
These innovation help incumbents earn higher margins on their products. They are
either simple, incremental engineering improvements or drastic performance
improvements (Christensen, et al., 2002). Incremental improvements can be thought of
as “creative creations” (Ireland, et al., 2003).
Through effective SE, firms are able to engage in both disruptive and sustaining
innovation (Ireland, et al., 2003). Without practicing SE, the firm might overly
concentrate on sustaining innovations and exploit its current advantages, meaning the
firm may miss future opportunities and potential for future competitive advantages for
long-term success. Effective use of SE leads to a comprehensive and integrated
commitment to both sustaining and disruptive innovations as drivers of value creation.
(Ireland, et al., 2003)
Strategic management teaches us that innovation that are the focal points of strategic
entrepreneurship initiatives represent the means through which opportunity is
capitalized upon and can happen “anywhere or everywhere” in a firm (Kuratko and
Audretsch, 2009). In a strategy context, innovation represents a fundamental change
53
from the firms’ past strategies, products, markets, organization structures, processes,
capabilities, or business models to new firm strategies or otherwise. Additionally, these
innovations can represent or form the bases for competitive advantages that
fundamentally differentiate a firm from its rivals (Kuratko and Audretsch, 2009). By
emphasizing an opportunity-driven mindset, management seeks to achieve and
maintain a competitively advantageous position for the firm. Kuratko and Audretsch
(2009) provide two possible reference points that can be considered when a firm
exhibits strategic entrepreneurship in relation to innovation:
1. How much the firm is transforming itself relative to where it was before (e.g.,
transforming its products, markets, internal processes, etc.)
2. How much the firm is transforming itself relative to industry conventions or
standards (again, in terms of product offerings, market definitions, internal
processes, and so forth)
In essence, innovation in an entrepreneurship context is described with more focus on
the nature of the product or service itself (in relation to existing markets; i.e. disruptive
or sustaining innovation), while within a strategic management context, these
innovations are described at the firm level of analysis as part of the overall firm strategy
or strategic direction. Combining both these perspectives forms the basis for
innovation’s place within the field of strategic entrepreneurship, forming the potential for
a more comprehensive analysis of how innovations can create firm wealth.
54
Value Creation in Strategic Entrepreneurship
Ireland, et al. (2001) posit that entrepreneurial and strategic actions are at the core of
wealth (or value) creation. Entrepreneurial actions occur when companies exploit
opportunities others have not identified or exploited – a “fundamental behavior” of firms
when they move into new markets, seize new customers and/or combine resources in
new ways. Strategic actions are taken to choose and implement a firm’s strategy.
Taken together, both these kinds of actions can help a firm grow and increase its
wealth, or sustainable, long-term income. Both firm leaders and local, state, and federal
governments influence the ability for firms to consistently and continuously create
wealth.
Wealth creation is central to both entrepreneurship and strategic management (Ireland,
et al., 2001; Ireland, et al., 2003) and provides a link between the two disciplines
(although the each field has a slightly different focus on the topic - strategy is concerned
with a firm’s long-term development and entrepreneurship is concerned with actions
taken to create newness (Ireland, et al., 2003; Ireland and Webb, 2007)). Strategic
management scholars seek to understand the causes of performance differentials
across firms, while entrepreneurship scholars study the creation of wealth through the
creation of value (Hitt, et al., 2011). Entrepreneurs are posited to create value by
leveraging innovation to exploit new opportunities and to create new product-market
domains (Hitt, et al., 2011). Managing capabilities and resources to identify and pursue
marketplace opportunities is a central theme for both entrepreneurs and strategists
55
(Ireland, et al., 2001). Strategic entrepreneurship can be practiced by organizations
large and small, public and private (in contrast to corporate entrepreneurship, which has
generally been described in the context of larger firms). SE literature submits that
wealth is created only when firms are able to effectively combine opportunity-seeking
behavior (i.e., entrepreneurship) with effective advantage-seeking behavior (i.e.,
strategic management) (Ireland, 2003). In essence, value creation is the link between
strategy and entrepreneurship, thereby making the strategic entrepreneurship construct
a logical integration and connection between the entrepreneurship and strategic
management domains.
In other words, SE crystallizes the mutual support and interdependence that exists
between entrepreneurship and strategic management (Hitt et al., 2002). Strategic
entrepreneurship can be seen as entrepreneurial action that is taken with a strategic
perspective. The integration of entrepreneurial and strategic actions is necessary for
firms to create maximum wealth (Ireland et al., 2001) and to promote strategic growth
(Obeng, et al., 2012). Furthermore, firms desiring to continuously create wealth cannot
rely on either strategy or entrepreneurship alone; rather, firms must successfully
engage in strategic entrepreneurship (Ireland, et al., 2003; Webb, et al., 2010).
Strategic entrepreneurship literature also emphasizes the close relationship between
underlying capabilities and value creation and capture (Klein, et al., 2013). Therefore,
there is a need for entrepreneurial action with strategic perspective.
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As a conceptual framework, strategic entrepreneurship offers a more expansive
perspective on value creation and maximization of firm performance than do the
traditional constructs of strategic management and entrepreneurship alone (Audretsch,
et al., 2009). As a field of study, strategic entrepreneurship aims to examine how new
and established ventures explore and exploit innovative opportunities to create and
sustain competitive advantage (Obeng, et al., 2012). The combination of perspectives
from strategy and entrepreneurship can provide a better picture as to how firms create
wealth – a primary aim of the field.
According to Sharma and Chrisman (1999), corporate entrepreneurship is “the process
whereby an individual or a group of individuals, in association with an existing
organization, create a new organization or instigate renewal or innovation within that
organization.” Ireland, et al. (2003) describe entrepreneurship as the process through
which newness is created. The entrepreneurship process involves combining resources
in novel ways, leading to newness in the form of innovative products or services,
processes, administrative techniques, or structural manifestations, which may, in turn,
serve as a source of value (Ireland and Webb, 2009). Therefore, corporate
entrepreneurship is differentiated from individual entrepreneurship, but is still a subset
of entrepreneurship (Sharma and Chrisman, 1999) as its definition centers around
entrepreneurial newness – a key difference between it and SE. While SE lies at the
intersection between entrepreneurship and strategy, CE is firmly rooted in the
entrepreneurship domain.
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Therefore, firms that engage in corporate entrepreneurship can also engage in strategic
entrepreneurship, but these are two different activities and mindsets (Ireland and Webb,
2009). Corporate entrepreneurship is a form of entrepreneurship, but strategic
entrepreneurship involves the integration of both entrepreneurial and strategic activities
(i.e. balancing exploration and exploitation). Ireland and Webb (2009) submit that a
strategic entrepreneurship mindset is more comprehensive (with a deliberately strong
focus on both opportunity-seeking and advantage-seeking behaviors) than a corporate
entrepreneurship mindset (featuring a stronger emphasis on opportunity-seeking, rather
than advantage-seeking behavior). This makes sense, as opportunity-seeking
behaviors are traditionally seen as falling within the domain of entrepreneurship, while
advantage-seeking behaviors are strategic in nature.
Nag, et al. (2007) define the field of strategic management as dealing with “the major
intended and emergent initiatives taken by general managers on behalf of owners,
involving utilization of resources to enhance the performance of firms in their external
environments.” Firms acting strategically will take into account their resources and
assess the internal and external environments in which they compete when formulating
and implementing such initiatives. This definition lends clear connections between
strategic management and strategic entrepreneurship.
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Firstly, “enhanced performance” in the definition is referring to value creation – central
to SE. Exploration and exploitation activities draw upon a firm’s limited stock of
resources (Ireland and Webb, 2009). Strategic entrepreneurship is more “forward-
thinking” than strategic management; as strategically entrepreneurial firms will both
invest in leveraging current sources of competitive advantage (i.e. advantage-
seeking/exploiting behaviors) while balancing investment in developing future sources
of competitive advantage (i.e. opportunity-seeking/exploring behaviors). The latter
exploring behaviors are taken from the field of entrepreneurship; therein lies the
integration between the two fields. As Ireland, et al. (2003) put it, firms create wealth by
identifying opportunities in their external environments and then developing competitive
advantages to exploit them – thus, strategic entrepreneurship results from the
integration of entrepreneurship and strategic management knowledge.
As Kuratko and Audretsch (2009) so eloquently put it, “entrepreneurship is more than a
course of action one pursues; rather it is more than a mindset.” Entrepreneurship can
provide a theme for a company’s entire operations and serve as an integral component
of a firm’s strategy and, in some instances, serve as the core or defining component of
corporate strategy (Kuratko, et al., 2001). In short, a strategy attempts to capture where
the firm wants to go and how it plans to get there. Entrepreneurship can greatly
enhance the possibility of firm success (Kuratko and Audretsch, 2009).
59
Again, SE should be differentiated from corporate entrepreneurship, where the latter
places less emphasis on advantage-seeking behaviors. A strategic entrepreneurship
mindset is more comprehensive (featuring strong foci on both opportunity seeking and
advantage seeking behavior) than a corporate entrepreneurship mindset (featuring a
stronger emphasis on opportunity seeking than advantage seeking behavior) (Ireland
and Webb, 2009). In essence, SE is definitely a process through which resources are
used for both exploration and exploitation purposes. Some also view corporate
entrepreneurship as a set of activities firms use to explore for future core competencies
for continued competitive success (Covin and Kuratko, 2008; Ireland and Webb, 2009).
Historically, when used for these purposes, corporate entrepreneurship may find firms
restructuring their operations as a foundation for organizational renewal. While such
restructuring falls within the domain of corporate entrepreneurship (Sharma and
Chrisman, 1999), the renewal only becomes obvious within organizations as they
engage in strategic entrepreneurship, a process through which resources are used for
both exploration and exploitation purposes.
In short, while corporate venturing (or CE) involves company involvement in the
creation of new businesses, strategic entrepreneurship corresponds to a broader array
of entrepreneurial initiatives that do not necessarily involve new businesses being
added to the firm (Covin and Kuratko, 2008; Meyer, 2009; Kuratko and Audretsch,
2009). All forms of strategic entrepreneurship have one thing in common: they all
60
involve the exhibition of organizationally-consequential innovations that are adopted in
the pursuit of competitive advantage (Kuratko and Audretsch, 2009).
Value creation in SE is not limited to financial value; rather, SE is better defined as a
construct that teaches us how firms create value (financial or otherwise). Short, et al.
(2013) called for scholars to explore SE in the context of social entrepreneurship, where
the value firms seek is often not necessarily monetary. Hitt, et al. (2011) included
societal value as an output in their conceptualization of SE, suggesting that the value
derived from successful SE goes far beyond financial gains. Lastly, as per the
definitional analysis earlier, the term “value creation” is popular for some descriptions of
SE. This research posits that this is a better term for what SE is trying to do and/or
describe.
Additionally, one should note that while strategic entrepreneurship incorporates an
entrepreneurial mindset as one of its elements, it is unlike the entrepreneurial
orientation (EO) construct in that EO deals with entrepreneurship as an organizational
culture, rather than entrepreneurship manifesting itself as action or implementation. EO
refers to the strategy-making practices that businesses use to identify and launch
corporate ventures (i.e. new venture creation; corporate venturing), representing a
frame of mind and a perspective about entrepreneurship that are reflected in a firm’s
ongoing processes and corporate culture (Lumpkin and Dess, 1996; Dess and
Lumpkin, 2005). Strategic entrepreneurship does not only deal with “new venture
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creation.” In fact, EO seems closer in spirit to CE, as per Sharma and Chrisman
(1999)’s definition. However, EO is clearly an antecedent of two components of SE (as
per Ireland, et al., 2003’s definition) – entrepreneurial mindset and entrepreneurial
culture.
Levels of Analysis
Strategic entrepreneurship transcends different levels of analysis, encompassing
actions of individuals, teams, and firms in an intra or inter-organizational perspective
(Foss and Lyngsie, 2011) and applies to both small and large firms and relates to both
established firms and new ventures (Ireland, et al., 2001; Ireland, et al., 2003; Kyrgidou
and Hughes, 2010; Agarwal, et al., 2010; Hitt, et al., 2011). Ketchen, et al. (2007)
submit that “small and large firms that learn how to integrate strategic entrepreneurship
and collaborative innovation are well positioned to create wealth.” Strategic
entrepreneurship can also be applied in both private and public contexts (Luke and
Verreynne, 2006; Luke, et al., 2011; Klein, et al., 2013). Luke and Verreynne (2006)
firmly posit that the concept of strategic entrepreneurship is not limited to private sector
organizations, as incidences clearly exist within a public sector context.
As Agarwal, et al. (2010) put it, “strategic entrepreneurship, however defined, clearly
relates to initiatives grounded in the search for competitive advantage and leading to
new entry into products, markets, processes, or technological innovations by both
incumbents and new ventures.” Therefore, strategic entrepreneurship deals with how a
62
firm’s strategic intent can enable a continuous entrepreneurial opportunity recognition
process while also facilitating the discipline to exploit the right opportunities (as a
strategic, advantage-seeking process). Strategic entrepreneurship also remains firmly
grounded in the resource-based view (RBV) of the firm, emphasizing the importance of
picking the resources in strategic factors markets and building the capabilities required
to support entrepreneurial opportunity-seeking behavior aimed at achieving a
sustainable competitive advantage (Makadok, 2001; Liu, et al., 2010).
While a majority of studies look at large firms (i.e. Luke and Verreynne, 2006; Ketchen,
et al., 2007; Burgelman and Grove, 2007; Luke, et al., 2011), a few other studies have
kicked off the research stream of SE in SMEs and new ventures (i.e. Yan and Hu, 2008;
Patzelt and Shepher, 2009; Obeng, et al., 2012). Shirokova, et al. (2013) even
developed and tested a model of SE based off of Ireland and Webb (2007)’s
conceptualization against Russian SMEs. This study confirmed the existence of SE
activity at SMEs.
Most extant research in the field, however, looks at strategic entrepreneurship at the
firm level of analysis. Schindehutte and Morris (2009) noted this in their
conceptualization of SE and posit that research thus far had been limited by its reliance
on a predominantly firm-level perspective. They call for scholars to treat SE as a
multilevel phenomenon, reflected by the emergence of more complex multi-level
conceptualizations by Hitt, et al. (2011) and Kraus, et al. (2011). The former framework,
63
specifically, discusses the outputs of SE as occurring at the individual, organizational,
and societal levels, reflecting Schendel and Hitt (2007)’s suggestion that beyond
benefiting simply the organization itself, strategic entrepreneurship can create advances
from which society can benefit “through new value propositions that better serve the
needs of some segment, or the whole, of society.”
Others have discussed SE at the individual level of analysis, such as Companys and
McMullen (2007) and Levie and Autio (2011). The latter even provided a definition for a
“strategic entrepreneur” based off of Ireland, et al. (2003)’s conceptualization of SE.
Also, some extant research brings SE up into a broader macroeconomic level of
analysis (i.e. Mathews, 2010), whereby the performance of an entire economy (as an
aggregate of many firms) is studied in the context of SE.
The inter-firm level of analysis has also been briefly explored in the field. Burgelman
and Grove (2007) provide a case study analysis that discusses inter-firm and inter-
industry relations, using the SE construct as a backdrop. Dushnitsky and Levie (2010)
also discuss inter-firm relationships in relation to corporate venture capital investment
and strategic entrepreneurship. Both Schulze (2007) and Rosenkopf and Schilling
(2009) discuss introduce network theory to SE as other attempts to study SE at the
inter-firm level of analysis.
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As for the team or intra-firm levels of analysis, extant research has not explored this
area. Hitt, et al. (2011) discuss that this is a possible area of future research for the
field. They suggest that scholars look into where it is possible for individual business
units and departments to excel at both advantage- and opportunity-seeking behaviors
within a single organization (Hitt, et al., 2011). Research at this level of analysis could
provide very interesting insight on the nature of intra-firm, inter-departmental, or team
relations within a firm engaging in SE.
Scholars further posit that SE is relevant across the full life cycle of organizations (Hitt,
et al., 2011), although historically, strategic management has largely been associated
with mature organizations and entrepreneurship largely associated with young
ventures. As such, SE implies a long-term view of value creation that results from
simultaneously engaging in opportunity- and advantage-seeking behaviors – a longer-
term view and wider applicability than either domain by itself provides. SE is also very
unlike corporate entrepreneurship in this way, as CE falls only under the purview of
large, incumbent organizations (Sharma and Chrisman, 1999).
Therefore, it is easy to see that strategic entrepreneurship has a lot of research
potential for levels of analysis other than the firm (as it was conceptualized early on),
mainly because the construct’s boundaries reach far wider than strategy or
entrepreneurship alone, or even other constructs such as corporate entrepreneurship.
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What All This Means
Our understanding of SE has evolved since Ketchen, et al. (2007)’s paper with its four
assertions. Now we know that SE involves a balance between exploration and
exploitation behaviors. This balance can lead to long-term value creation – not just
short-term performance gains. This long-term value creation is made possible by
continuous innovations, which allow firms to gain successive competitive advantages. A
combination of incremental and disruptive innovation is key to effective SE. Finally,
effective SE can help firms mitigate the ill-effects of uncertainty and operating in
dynamic environments.
The strategic entrepreneurship is also fundamentally different from corporate
entrepreneurship. While CE is firmly rooted in the domain of entrepreneurship, SE
straddles the domains of entrepreneurship and strategy, integrating knowledge from
both to give a more comprehensive view of how firms create wealth. Additionally, SE
goes beyond financial performance gains and also seeks to describe and prescribe how
firms can achieve values other than financial value. While CE only applies to large,
incumbent firms and is heavily focused on new business creation, SE is applicable to
any type of firm (large or small, incumbent or new venture) and applies to a wider array
of entrepreneurial pursuits. Therefore, the strategic entrepreneurship field has a broader
reach than corporate entrepreneurship ever had and has the potential to provide insight
on value creation in a more far-reaching manner (i.e. different types of firms, firm
contexts, environments, values being created, etc.).
66
Lastly, it is valuable to briefly touch on what strategic entrepreneurship is not, as this
section mostly described the construct and what it is and what it does. While this is a
more difficult task, the key to this question lies in the fact that the strategic
entrepreneurship field explicitly seeks to describe how firms create value/wealth.
Strategic entrepreneurship does this by combining knowledge from strategy (i.e.
advantage-seeking) and entrepreneurship (i.e. opportunity-seeking). Thus, SE is not
just one or the other – SE is the combination of both strategic management and
entrepreneurship. As such, any descriptions of the construct must reflect this and any
further research done in the field must also meld these two perspectives in its analyses.
Furthermore, the current descriptions of the field suggest that the field is only trying to
answer questions that pertain to how firms create wealth or value; therefore, questions
where the ultimate dependent variable is not wealth or value creation are not within the
purview of the SE field.
Key Points
Previous attempts to define SE’s boundaries, both as a field and a construct, have not
been comprehensive enough in order to understand SE’s place in management studies.
In a special issue of the Strategic Management Journal (SMJ), Hitt, et al. (2001)
established strategic entrepreneurship as both a field of study and an academic
construct. As a field, SE lies at the intersection of the strategy and entrepreneurship
67
domains, integrating knowledge and perspectives of both domains so scholars can
better understand how firms create wealth. The question of how firms create and
sustain a competitive advantage (emerging from the strategic management academic
tradition) while simultaneously identifying and exploiting new opportunities (from the
entrepreneurship academic tradition) is “at the heart” of strategic entrepreneurship
research (Siren, et al., 2012). The strategic entrepreneurship field was officially
legitimized as an academic field of study with the creation of the Strategic
Entrepreneurship Journal in 2007.
As a construct, SE is a distinctive and unique construct through which firms can create
wealth and contributes to the understanding of how firms can create wealth. The
construct combines ideas and concepts from entrepreneurship with ideas and concepts
from strategy to provide a more comprehensive picture (or conceptualization or model)
of firms achieve value creation.
SE is not synonymous with corporate entrepreneurship. First, while SE lies at the
intersection between entrepreneurship and strategy, CE is firmly rooted in the
entrepreneurship domain. Secondly, CE only applies to large, established firms; in
contrast, SE applies to firms of all sizes, ages, and characteristics – large or small,
incumbent or new venture. Thirdly, strategic entrepreneurship corresponds to a broader
array of entrepreneurial initiatives that do not necessarily involve new businesses being
added to the firm, whereas CE is focused on entrepreneurial newness (i.e. new venture
68
creation). Overall, it is important to note that firms engaging in SE may also engage in
CE activities – the two are not mutually exclusive.
Furthermore, SE is unlike EO, as the EO concept is simply a precursor to
entrepreneurial mindset, one of four components of SE as outlined by Ireland, et al.
(2003).
Overall, SE addresses a long-term view of value creation that results from
simultaneously engaging in opportunity- and advantage-seeking behaviors – a longer-
term view and wider applicability than either strategy or entrepreneurship domains
provide by themselves. Further, strategic entrepreneurship has research potential for
levels of analysis other than the firm, mainly because the construct’s boundaries reach
far wider than strategy or entrepreneurship alone for explaining value creation, or even
other constructs such as corporate entrepreneurship.
Brief Overview of Current Research
This section will provide an extensive overview of much of the extant literature on
strategic entrepreneurship. Later sections will deal specifically with papers that
introduce different conceptualizations and models of SE. This brief overview will provide
the basis for the discussion on gaps and themes within the literature, as well as
suggested future research directions to advance the field in later sections.
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Currently, much of the work published on advancing the SE field has been done on a
purely theoretical context; only two of the 20 empirical studies included in this literature
review aim to advance the field by providing empirical support for previous
conceptualizations of SE (as well as confirming SE’s existence in a practical context).
Consequently, the relatively young SE field has yet to have a strong empirical
foundation like other constructs and fields similar to it (such as corporate
entrepreneurship).
Currently, many papers discuss strategic entrepreneurship within the context of large,
publicly traded firms, such as Cisco and UPS (Ireland and Webb, 2007) and Raytheon
and Apple (Ketchen et al., 2007; Burgelman and Grove, 2007), as well as within a
public organization context (Luke and Verreynne, 2006; Luke, et al., 2011). Other work
has been done on discussing SE within a family firm context (Webb, et al., 2010;
Lumpkin, et al., 2011) and the knowledge spillover view of SE (KSSE), as coined by
Agarwal, et al. (2007) (Liu, et al., 2010; Agarwal, et al., 2010; Kotha, 2010). Below is an
elaboration of the different topics covered in the field.
With regards to connecting the concept of knowledge spillovers in entrepreneurial
contexts to strategic entrepreneurship, a special issue of SEJ was dedicated to this
topic. Kotha (2010) sensitizes researchers to examine the nuanced and complex
interplay among knowledge generation, knowledge spillovers and spill-ins, and strategic
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entrepreneurship within a specific industry context to explain performance. This paper
examines the impact these spillovers had on opportunity- and advantage-seeking
behaviors (i.e., strategic entrepreneurship) of the leading American incumbents:
Douglas, Lockheed, Boeing, and a new entrant, de Havilland of Great Britain. Liu, et al.
(2010)’s findings provide new insights into the source of the resources and capabilities
required for innovative opportunity seeking behavior for strategic entrepreneurship, with
particular emphasis upon the knowledge embodied in individual returnee entrepreneurs
(Liu, et al., 2010). Agarwal, et al. (2010) attempts to refine the KSSE framework initially
put forward by Agarwal, et al. (2007).
Several papers on SE have emerged from the domains of finance and economics. Two
papers have explored SE through the lens of agency theory (Audretsch, et al., 2009;
Meuleman, et al., 2009). Audretsch, et al. (2009) aim to advance the SE field by
discussing linking the SE construct to agency theory through an empirical study based
on patent ownership. Meuleman, et al. (2009) discusses SE in the context of private
equity-backed buyouts (PE). Wright, et al. (2009) discusses PE and corporate
governance, exploring the topic from a strategic entrepreneurship perspective. Dew, et
al. (2009) discuss the implications of affordable loss for the economics of strategic
entrepreneurship. Dew, et al. (2009) discuss affordable loss and its effect on decision
making and discusses implications to the economics of strategic entrepreneurship.
Dushnitsky annd Lavie (201) discusses strategic entrepreneurship in the context of
corporate venture capital (CVC). This paper advances strategic entrepreneurship
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research by elucidating the tendency of established firms to engage in CVC investment
and by unpacking the complex association between different types of interfirm
relationships that these firms leverage (Dushnitsky and Lavie, 2010). Mathews (2010)
uses the radical subjectivist and disequilibrium framework of Ludwig Lachmann to
provide a foundation in strategic entrepreneurial studies that is focused on economic
concepts such as rents.
Scholars have even introduced the concept of a “strategic entrepreneur” as an
extension of the SE construct (which is more of a firm-level phenomenon) to discuss SE
at the individual level of analysis. Companys and McMullen (2007) talk about strategic
entrepreneurs in the context of the opportunity recognition/exploration process in a
discussion about the nature, discovery, and exploitation of entrepreneurial
opportunities. Levie and Autio (2011) provided a definition for a “strategic entrepreneur”
as per Hitt, et al. (2002)’s definition for SE: those who decide to pursue growth
opportunities through an entrepreneurial venture as an attempt to merge opportunity
pursuit with competitive advantage. In other words, “strategic entrepreneurs”
simultaneously seek opportunity and advantage. Levie and Autio (2011) further posit
that entry into entrepreneurship is a strategic act for individuals who seek an optimal
way to exploit their human, social, and financial capital. This paper also mentions that
KSSE entrepreneurs may be a major subset of strategic entrepreneurs. These concepts
are discussed in the context of business regulatory burdens.
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Burgelman and Grove (2007) developed the idea of a cross-boundary disruptor (XBD)
(defined as a powerful entrepreneurial change agent whose strategic actions materially
affect the equilibrium in an adjacent or neighboring industry) through a case study on
Apple Computer in the music industry and Walmart in the healthcare industry. The XBD
Paradox focuses attention on the failure of strategic entrepreneurship that stems from
being blind to XBD opportunities. This is particularly so in companies strong enough to
mount a XBD attack on another industry, which are rarely aware of the opportunity to do
so. This paper presents a unique contribution by explicitly discussing the failures of SE
and reasons for failures using case studies from well-known companies in different
industries.
Pisano, et al. (2007) adopted a contextual approach to integrate resource-based theory,
organizational learning theory, social capital theory, and strategic entrepreneurship in
order to present a theoretical analysis of the means firms employ to create and exploit
competitive advantages in emerging economies.
Two papers also discussed networks and alliances (a component of both Ireland, et al.
(2001)’s and Hitt, et al., (2011) conceptualizations of SE) in relation to strategic
entrepreneurship. Rosenkopf and Schilling (2009) built a comparative study in 32
industries about the variation in alliance network structures across industries. They
posit that although much research in strategic entrepreneurship has focused on the
consequences of network structure for firm performance, little is known about variation
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in network structure across industries, or about the antecedents of this variation. As
discussant comments, Schulze (2007) discussed how network theory is an important
topics in the fields of both strategy and entrepreneurship and provided some insight in
what has already been done on the topic and what needs to be done within the context
of strategic entrepreneurship.
As noted many times before, many differing descriptions and opinions exist among
scholars as to the nature of strategic entrepreneurship and what constitutes SE activity.
Kuratko and Audretsch, (2009) highlighted many of these differing perspectives on this
emerging concept by interviewing different management scholars in an early attempt to
reconcile some of these perspectives. This paper discusses SE from three
perspectives: strategic management, entrepreneurship, and economic policy.
Additionally, this paper discusses the integration of entrepreneurship with strategy and
the integration of entrepreneurship with leadership as a part of the discussion.
Monsen and Boss (2009) built an empirical study that tests how managers and staff
react to strategic entrepreneurship, concluding that both groups react differently, and
therefore, SE requires a correspondingly customized design philosophy in order to
minimize job stress and increase employee retention. These customized strategic
entrepreneurship systems, in turn, can better maximize wealth/value creation for
organizations, for their managers, and for their staff. This paper’s contribution is unique
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in the field, in that it provides an in-depth discussion and study on the human resources
aspect of SE by testing SE’s impact on job stress and employee retention.
Short, et al. (2009), in an article about research in social entrepreneurship and the state
of the field of social entrepreneurship, recommend that scholars embrace key themes in
strategic entrepreneurship and frame their research using established theories relevant
to strategic entrepreneurship research. Hitt, et al. (2011) used a non-profit program as
an example of how SE can create non-financial value that benefits society.
One paper explicitly discusses strategic entrepreneurship in the context of uncertainty.
Ireland and Webb (2009) (already discussed extensively in previous sections) suggests
that firms can use SE as an effective method for dealing with uncertainty. Dew, et al.
(2009) mentions the construct of uncertainty while discussing affordable loss as part the
paper’s contribution to the understanding of the economics of strategic
entrepreneurship.
Strategic entrepreneurship in family firms has also been a major topic within the
literature (Webb, et al., 2010; Lumpkin, et al., 2011; Kansikas, et al., 2012). Webb, et al.
(2010) provide a framework of strategic entrepreneurship within family-controlled firms,
as discussed earlier. Lumpkin, et al. (2011) explore the intersection between strategic
entrepreneurship and family business, suggesting that the development of strategic
entrepreneurship research has overlapped with growth in family business research and
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is emerging rapidly as a topic critical for value creation and economic strength. It is,
therefore, important to explore the role of strategic entrepreneurship within the context
of family firms. This paper explored two related questions: in what ways does the
influence of family matter to strategic entrepreneurship; and how can strategic
entrepreneurship contribute to understanding and strengthening family firms?”
Kansikas, et al. (2012) investigate how familiness and entrepreneurial leadership are
related to each other in family firms. This paper posits that family firms have a resource
that distinguishes them from non-family firms: familiness, which offers an opportunity for
the creation of competitive advantages. They define familiness as the unique bundle of
resources a particular firm has because of the systems interaction between the family,
its individual members and the business and suggest that familiness is defined
according to the resources available to the) family firm. In essence, this paper views
familiness and entrepreneurial leadership as resources for strategic entrepreneurship.
Two papers use strategic entrepreneurship frameworks to discuss academic
entrepreneurship. As previously mentioned, Patzelt and Shepherd (2009) studied
academic entrepreneurs, while Wright, et al. (2012) combined strategic
entrepreneurship perspectives (namely, Ireland, et al. (2003)’s framework for SE) and
resource orchestration theory we provide an integrated framework that explains the
heterogeneity of growth across different types of university spin-offs (USOs).
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Cunha (2007) discusses entrepreneurial decision-making using Ireland, et al. (2003)’s
model of strategic entrepreneurship as a framework. The four building blocks of
entrepreneurial activity as per this framework were considered in this study:
entrepreneurial mindset, entrepreneurial culture and leadership, strategic management
of resources and application of creativity and development of innovation.
Skuras, et al. (2005) use Hitt, et al. (2001)’s conceptualization of SE to discuss
business growth and development trajectories in lagging and remote areas of Southern
Europe by studying local entrepreneurship.
Some studies also contribute to the field by discussion strategic entrepreneurship in the
context of small and medium enterprises (SMEs). Yan and Hu (2008) applied Ireland, et
al. (2003)’s SE conceptualization in an empirical study about the Taiwan bicycle
industry. Patzelt and Shepherd (2009) discussed SMEs within an academic
entrepreneurship and strategic entrepreneurship concept. Obeng, et al. (2012) discuss
small firm growth models and investigates the determinants of small firm growth in
Ghana using concepts derived from strategic entrepreneurship. This paper presents a
two-pronged contribution to the field by also applying SE to SMEs in a developing
country context. Shirokova, et al. (2012) developed and tested a model of SE based off
of Ireland and Webb (2007)’s model of exploration and exploitation against Russian
SMEs. They tested for SE’s influence on performance and found that exploration,
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exploitation, and SE activities all have positive influence on the performance of the
Russian SMEs tested.
Three studies were focused on state-owned or public enterprise contexts. As previously
discussed extensively, Luke and Verreynne (2006) and Luke, et al. (2011) both
developed and empirically tested models of SE in against state-owned enterprises in
New Zealand. Klein, et al., (2013) contribute to the literature by presenting a theory
paper that studies public organizations with regards to SE (previously relatively
understudied in SE literature) and submit that public organizations are usefully analyzed
as entities that create and capture value in both the private and public sectors. They
submit that public organizations can act entrepreneurially by creating or leveraging
bundles of capabilities, which may then shape subsequent entrepreneurial action (Klein,
et al., 2013).
Finally, Siren, et al. (2012) introduce strategic learning as a mediating factor for SE
between exploration, exploitation, and firm's profit performance. They found that the
impacts of exploration and exploitation strategies on the firm’s profit performance are
fully mediated by the strategic learning process. They suggest that strategic learning is
important for firms operating in dynamic environments.
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Themes in Extant Literature
Some interesting themes emerge from the extant literature reviewed above about SE
and where the SE field has gone in terms of overlaps with other ideas and constructs.
Value Creation
Strategic entrepreneurship literature teaches us that combining entrepreneurial activity
with lessons from strategic management can lead to superior firm performance and
value creation; innovations can be positively managed in a way that maximizes wealth
and value potential for the firm. The question of how firms create wealth is at the heart
of the academic inquiry within the field and is the second critical dimension of SE.
The papers reviewed agree that strategic entrepreneurship leads to wealth or value
creation. As shown in the definitional analysis, different papers used different
descriptions or definitions for SE, but value creation is the second major descriptive
theme among these different definitions. Wealth or value creation is also the ultimate
dependent variable in all the frameworks and conceptualizations for SE in the literature
thus far.
Exploration and Exploitation
Burgelman (1983) proposed the concept of “order and diversity” as an early antecedent
of the concept of opportunity-seeking (exploration) and advantage-seeking (exploitation)
activities. In fact, there are different terms for this dichotomy, which is a fundamental
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characteristic of SE, but they are referring to the same concept. SE was originally
conceptualized around the concept of balancing these two types of activities to achieve
competitive advantages and value creation. Naturally, all other extant literature
emphasizes the importance of achieving the correct balance for firm success, as well as
the difficulty in reaching and maintaining a successful balance between the two
antagonistic sets of activities. The creation of more complex frameworks that
incorporate iteration (Kyrgidou and Hughes, 2010) and feedback and feedfoward loops
(Hitt, et al., 2011) reflect scholars’ understanding of the complexity of this balance. This
prominent idea within the literature also shows up as the first major descriptive theme of
strategic entrepreneurship found in the definitional analysis. This is the first critical
dimension of SE.
Middle Managers
Ireland and Webb (2007)’s recommendation whereby middle managers would be the
agents of strategic entrepreneurship within an organization is a particularly interesting
idea that emerges from the literature. This is reminiscent of Burgelman (1983)’s work
over two decades earlier, where he suggests middle level managers play a crucial role
in implementing corporate strategic entrepreneurship (an early antecedent of SE)
through their support for autonomous strategic initiatives early on, by combining these
with various capabilities dispersed in the firm's operating system, and by
conceptualizing strategies for new areas of business. By allowing middle level
managers to redefine the strategic context, and by being fast learners, top management
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can make sure that entrepreneurial activities will correspond to their strategic vision,
retroactively.
Of course, Burgelman made his recommendation in the time before the current trends
of organizational de-layering and decentralization became popular. However, Ireland
and Webb (2007)’s recommendation that firms “bring back” the middle manager as the
primary vehicle for balancing exploration and exploitation (i.e. operationalizing firm
strategy) within a firm is especially novel, considering in light of the mass layoffs of
middle-level managers in the late 1980s through the 1990s as part of the trend towards
flatter organizational structures.
Would middle management actually improve or hinder innovation (and consequently,
SE)? Kuratko and Audretsch (2009) raised the question of whether innovation is
expected to come from middle management at all, or some other level of management.
Bureaucracy has the stigma of promoting organizational inertia, which is not conducive
for SE and seems counterintuitive to entrepreneurial initiatives in general. Flatter
organizational structures have enjoyed increased popularity for this reason, as they are
touted for promoting firm responsiveness to external changes.
Further research needs to be done to consider the pros and cons of middle manager
emphasis, as well as on the specifics of how strategic entrepreneurship can and should
be operationalized within a firm.
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Innovation
The most overwhelming common theme with almost all of the literature reviewed is the
sheer importance of innovation as a part of value creation within both the CE and SE
constructs. Ultimately, continuous innovation is the key driver of value creation, in that it
provides the key to building and maintaining a competitive advantage within the
marketplace. A firm’s organizational structure must be conducive towards both
promoting innovation (exploring activities) and managing innovation (exploitation
activities). Innovation greases the wheels for SE, in essence, as without exploring,
opportunity exploitation could not occur. And without opportunity exploitation, a firm
would not be able to gain a succession of competitive advantages (they key to
operating in a dynamic and uncertain environment), and increased firm performance
(i.e. value creation) cannot be realized. Innovation is the fifth critical dimension of SE.
Knowledge Spillover
A good chunk of the literature reviewed specifically deals with the crossover between
strategic entrepreneurships and the concept of knowledge spillovers (i.e. Agarwal, et
al., 2007; Agarwal, et al., 2010; Liu, et al., 2010). A special of issue in SEJ in 2010 was
dedicated to the topic of knowledge spillovers. While initially a tangential research
direction for the SE field, this angle on the SE construct may see much further
development, especially with the development of the KSSE framework connecting the
two concepts by Agarwal, et al. (2007).
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Family Firms
Family firms also seems to be a hot topic in relation to SE, with scholars creating family
firm frameworks based of off Ireland, et al. (2003)’s initial conceptualization of SE. This
is not all too surprising, considering that since the early beginnings of the field, SE is
slated to be a construct applicable to all types of firms. The SE construct gives scholars
a unique construct that allows the concept of entrepreneurship combined with strategy
to be applied to a variety of different firm types. Therefore, similar themes within the
literature and frameworks may emerge for other firm types such as those operating in
heavily regulated industries or non-profits.
Multi-Level Outcomes
As Hitt, et al. (2011) suggest, effective strategic entrepreneurship creates benefits that
can accrue to multiple sets of stakeholders – hence their suggested multilevel
framework. Lumpkin, et al. (2011) also developed a similar framework based off of Hitt,
et al. (2011) that is specific to family firms but incorporates the concept of multilevel
outcomes. The emergence of multilevel analysis within the field opens the doors to
future research on different types of value (i.e. the second critical dimension of SE) that
can be created with effective SE, beyond financial gains at the firm level of analysis.
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Overview and Analysis of Conceptual Frameworks
To preface the next few parts of the discussion, it is important to note that other
constructs have experienced similar conceptual and empirical difficulties to those in the
SE field in their research history. For example, similar difficulties in strategy research
over the measurement of “competitive advantage” and “strategy” are prominent.
Performance remains to be an ill-defined concept to work with in strategic management
research. Performance and competitive advantage are often used synonymously
(Powell, 2001; Peteraf and Barney, 2003; Crook, et al., 2008), even though a
competitive advantage does not always translate to superior performance (Durand,
2002; Crook, et al., 2008). In addition to conceptual issues, there are also noted
empirical difficulties in measuring both competitive advantage (see Ketchen, Hult, and
Slater, 2007; Tang and Liou, 2010) as well as firm performance (see March and Sutton,
1997; Wiggins and Ruefli, 2002), just as these difficulties exist with strategic
entrepreneurship. In fact, scholars are still in the process of defining the boundaries for
many other constructs within strategy and entrepreneurship. Therefore, the current
weaknesses or gaps in the strategic entrepreneurship field are simply another indication
that neither the strategy nor entrepreneurship domains that gave birth to SE have
reached full maturity. The SE field should continue to progress and mature, just like the
strategy and entrepreneurship domains shall continue to progress.
Over the past decade, a few conceptual frameworks and descriptions have emerged for
SE, each new framework attempting to refine previous frameworks by adding more
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detail or redefining the components of SE (Hitt, et al., 2001; Ireland, et al., 2001;
Ireland, et al., 2003; Ireland, 2007; Ireland and Webb, 2007; Ketchen, et al., 2007;
Agarwal, et al., 2007; Agarwal, et al., 2010; Webb, et al., 2010; Kraus, et al., 2011). Just
as the definition of strategic entrepreneurship was ambiguous and under debate, a
divergence in conceptual frameworks and differences in perspective are apparent (Luke
and Verreynne, 2006). Different papers have described the key components of strategic
entrepreneurship (Ireland, et al, 2003; Ireland and Webb, 2007) and have detailed the
relationship between strategic entrepreneurship and other concepts such as wealth
creation (Hitt et al., 2001; Ireland et al., 2001), collaborative innovation (Ketchen et al.,
2007), knowledge spillovers (Agarwal, et al., 2007; Agarwal, et al., 2010), and
organizational learning (Siren, et al., 2011).
Currently, many papers discuss strategic entrepreneurship within the context of large,
publicly traded firms, such as Cisco and UPS (Ireland and Webb, 2007) and Raytheon
and Apple (Ketchen et al., 2007; Burgelman and Grove, 2007), as well as within a
public organization context (Luke and Verreynne, 2006; Luke, et al., 2011). Other work
has been done on discussing SE within a family firm context (Webb, et al., 2010;
Lumpkin, et al., 2011). Some of these papers introduce context-specific frameworks and
shall be briefly included in this discussion.
Below is a comprehensive analysis of all the conceptual frameworks found in this
literature review for strategic entrepreneurship. This analysis will show how the
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conversation in the field has shifted away from simple, linear models of SE (i.e. Ireland,
et al., 2003) at the field’s inception and towards much more complex conceptualizations
that incorporate concepts such as iteration and feedback mechanisms (i.e. Kyrgidou
and Hughes, 2010) and multiple levels of analysis (i.e. Hitt, et al., 2011). The discussion
below includes an overview of the different frameworks, as well as an analysis of the
contributions of the different frameworks to the field.
Early Conceptualizations and Descriptions
Ireland, et al. (2001) identified six domains at the intersection of entrepreneurial actions
and strategic actions (i.e. an early conceptualization of strategic entrepreneurship):
1. Innovation
2. Networks
3. Internationalization
4. Organizational learning
5. Top management teams and governance
6. Growth
They posit that successfully integrating entrepreneurial and strategic actions in these
six areas improves a firm’s ability to grow and create wealth; in other words, the
successful integration of entrepreneurship and strategic management in these six areas
is effective strategic entrepreneurship. These six areas are claimed to be at the
intersection of entrepreneurial actions and strategic actions.
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The intersection of the strategy and entrepreneurship domains proposed by Ireland, et
al. (2001) soon evolved to become the integration of the two domains by Hitt, et al.
(2001) as the defining nature of the strategic entrepreneurship construct. Hitt, et al.
(2001) subsequently revised the above domains to be:
1. External networks and alliances
2. Resources and organizational learning
3. Innovation
4. Internationalization
Ireland, et al. (2003) extend this previous work by presenting a framework that
reinforces the unique nature of strategic entrepreneurship while progressing the
development of strategic entrepreneurship as a measurable construct (Luke and
Verreynne, 2006). This linear model is the earliest full conceptualization of strategic
entrepreneurship; as such, it is very elementary in nature and treats SE as a linear and
sequential process that alternates between four dimensions (i.e. alternating between
entrepreneurial and strategic activities).
Ireland, et al., (2003) described strategic entrepreneurship (SE) as involving
simultaneous opportunity-seeking and advantage- seeking behaviors and results in
superior firm performance and long-term wealth creation. Secondly, they defined the
four distinctive dimensions of SE. Ireland, et al. (2003) posit that these four components
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(implemented linearly) will help firms achieve a competitive advantage that will
ultimately lead to wealth creation (the ultimate dependent variable for SE). In essence,
they argue that strategic entrepreneurship is a unique, distinctive construct through
which firms were able to create wealth. These four dimensions of strategic
entrepreneurship are:
1. An entrepreneurial mindset
2. An entrepreneurial culture and entrepreneurial leadership
3. The strategic management of resources (i.e. financial capital, human capital,
social capital) and applying creativity
4. Developing innovation
In essence, Ireland, et al. (2003) integrates strategy and entrepreneurship perspectives
to suggest that firms following this linear sequence of four components are, in effect,
strategically entrepreneurial and can create competitive advantages that lead to wealth
creation. They posit that entrepreneurial leadership is linked to the success of all sizes
and types of firms (an early suggestion that all firms can implement SE, echoed in later
research).
All four components put forth here are the critical building blocks of later SE models and
is the basis for more complex frameworks. For example, the importance of the fourth
component of innovation is heavily emphasized in this work and later works (i.e. Ireland
and Webb, 2007; Schindehutte and Morris, 2009; Kyrgidou and Hughes, 2010; Hitt, et
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al., 2011) as essential for the strategic entrepreneurship process. Furthermore, Ireland,
et al. (2003) builds on earlier entrepreneurship literature on innovation by
acknowledging that firms can engage in two types of innovation: disruptive and
sustaining. They further posit that without SE, firms would concentrate too heavily on
sustaining innovation (exploitation-oriented), rather than seeking to engage in disruptive
innovation. Thus, an integrated commitment to both drives real value creation and
provides the basis for forming and executing competitive advantages.
The above conceptualization remained unchanged and unchallenged for a few years.
More Complex Conceptual Frameworks
In the next few years, the strategic entrepreneurship conceptual framework was refined
and grew in intricacy and depth to reflect the complexity of the construct and the
antagonistic nature of the exploration and exploitation processes central to SE.
Scholars understood that Ireland, et al. (2003)’s linear framework does not quite capture
the complexity of firms balancing both opportunity-seeking and advantage-seeking
behaviors – therefore, later descriptions and models aim to give a richer understanding
of the SE process, as well as its effects.
Ireland and Webb (2007) define strategic entrepreneurship as a value-creating
intersection between strategy and entrepreneurship consisting of the following three
elements:
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1. Balancing exploration and exploitation
2. Balancing resources between exploration and exploitation
3. Continuous streams of innovation
They posit that SE is concerned with actions the firm intends to take to exploit the
innovations that result from its efforts to continuously explore for innovation-based
opportunities (i.e., new organizational forms, new products, new processes, etc.). Here,
innovation is re-emphasized as an important driver of value creation, just as in Ireland,
et al. (2003)’s conceptualization. They add that innovation and its exploitation is a firm’s
main source of sustainable competitive advantage (i.e. both today’s and tomorrow’s
competitive advantages) and effective responses to continuous environmental changes.
This paper builds on earlier descriptions by suggesting that the ability to anticipate and
then properly respond to environmental change is one of the important outcomes of
effective SE.
They further posit that successful organizations will use strategic entrepreneurship to
deal with the organizational tension that surfaces as firms try to simultaneously
emphasize today what they already do well (relative to competitors) while exploring for
opportunities to build the foundation for future success. Exploration allows a firm to
benefit from diverse investments, while exploitation allows a firm to benefit from focus –
exploiting a particular opportunity. Thus, superior firm performance will be a function of
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the degree to which firms learn how to combine the best of strategic management and
entrepreneurship.
In an attempt to gain some clarity on the boundaries of the SE construct, as well as its
components, Schindehutte and Morris (2009) used complexity theory as a tool for
assessing the interplay between different components of strategic entrepreneurship. As
a result of their analysis, Schindehutte and Morris (2009) have listed the following
variables of SE as the most essential, echoing some elements from previous lists:
1. Exploration and exploitation
2. Opportunity
3. Innovation (or newness)
4. Micro-macro interaction
5. Dynamics
Schindehutte and Morris (2009) submit that while the notion that organizations can
excel by more successfully integrating strategy and entrepreneurship is intuitively
appealing, the realities of how opportunity-seeking and advantage-seeking behaviors
relate to one another are more complex than allowed for in Ireland, et al. (2003)’s
conceptualization of SE. They submit that the issue lies in describing and explaining
phenomena that occur from multiple dynamics. They suggest that there is a danger in
SE becoming too reductionist or overly holistic in examining disparate entities and their
respective behaviors within in a single framework (Schindehutte and Morris, 2009).
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Schindehutte and Morris (2009) also posit that SE research (up to the point at which
their paper was written) is limited by its reliance on a predominantly firm-level
perspective. Thus, they call for scholars to treat SE as a multilevel phenomenon, just as
innovation has been argued to be a multilevel phenomenon (a major component of SE).
They posit that unilevel research greatly limits the impact of SE work, as well as its
ability to explain the impacts of strategic entrepreneurship (in terms of value creation).
This multilevel lens is reminiscent of Schumpeter (1942)’s work on creative destruction,
and also reflects a shift within management studies towards more multilevel analysis
methods (Hitt, et al., 2007) – a shift reflected in one of the next frameworks.
Later Conceptualizations and Descriptions
As the first attempt to provide a richer conceptualization of SE, Kyrgidou and Hughes
(2010) suggest a non-linear, iterative model to fill some suggested gaps in the first
model by Ireland, et al. (2003) and to address the limitations of a linear model. For
example, despite SE being defined as the simultaneous pursuit of opportunity-seeking
and advantage-seeking behaviors (Ireland et al., 2003), the first model is linearly
punctuated between episodes of entrepreneurial and strategic behavior and lacks a
defined feedback loop between the two. In essence, the linearity of the first model hides
the complexity of the balance between two antithetical sets of activities – exploration
and exploitation.
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Additionally, Ireland, et al. (2003)’s model is dependent on the effective deployment of
behaviors (i.e. an entrepreneurial mindset) rather than internal firm conditions that
provide the contextual and structural framework within which these behaviors take
place. Further, uncertain and dynamic environments reduce the resources for
entrepreneurial actions. Thus, Kygridou and Hughes (2010) posit that dynamic
capabilities are critical for activating and sustaining strategic and entrepreneurial
processes and to balance advantage- and opportunity-seeking behaviors. They also
suggest that the linear model does not explicitly describe the “triggers” of SE; they
suggest that “vision” of top management (e.g. a commitment to innovation and
entrepreneurial behavior) could act as the strategic driver of SE within a firm.
Therefore, Kyrgidou and Hughes (2010) suggest an improved model that retains the
main structure and sequencing of Ireland et al.’s (2003) stages but adds in iterative
mechanisms and bidirectionality. This model shows SE firms iterating episodes of
opportunity identification, managing resources strategically, and opportunity exploitation
through creating and deploying innovation. Feedforward mechanisms have been added
to the model for exploring activities, while exploiting activities now have iterative
feedback mechanisms. This bidirectionality accounts for the fact that firms need to carry
out these stages in an iterative way to refine decisions and prevent escalation of
commitment. The integration of iterative learning practices into the SE process better
conceptualizes how firms might sustain long-term value creation, as firms should be
managing their resources and activities dynamically (i.e. dynamic capabilities). Lastly,
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the addition of iteration better explains how firms can use SE to gain and enact today’s
and tomorrow’s competitive advantages, as initially suggested (i.e. Ketchen, et al.,
2007; Ireland and Webb, 2007).
Furthermore, they posit that strategic entrepreneurship is composed of six components,
which introduces acceptance of risk as a new component:
1. Opportunity identification
2. Growth
3. Innovation
4. Vision
5. Flexibility
6. Acceptance of risk
Finally, Kyrgidou and Hughes (2010) submit that there are two key internal firm
requirements for SE:
1. The organizational architecture within which employees operate, are controlled
by, and rewarded through dictates how they will engage with the process
2. A fundamental tension exists between explorative and exploitative activities –
thus, both require very different structures to work effectively (as also suggested
by Ireland and Webb, 2007). Therefore, the organizational environment should
be “ambidextrous” to allow both processes to work effectively.
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Another one of the latest conceptual frameworks for SE is detailed in Hitt, et al. (2011)’s
paper, which proposes a multilevel input-process-output model as another attempt to
capture the complexity of the SE process and the balance between exploration and
exploitation behaviors, as called for by Schindehutte and Morris (2009). This paper also
agrees with Kyrgidou and Hughes (2010) ‘s suggestion that Ireland, et al. (2003)’s
linear model lacks the robustness required to explain the strategic entrepreneurship
construct. Hitt, et al. (2011) submits that there is recent evidence supporting the
assertion that SE is broader in scope, multilevel, and more dynamic than originally
conceptualized. This conceptualization also echoes the importance of firm structure as
highlighted by Kyrgidou and Hughes (2010).
Therefore, Hitt, et al. (2011) has created a more complex model that gives a richer
understanding of the SE construct than a simple linear model would provide. This
conceptualization of SE aims to address the linearity problem of Ireland, et al. (2003)’s
original conceptualization, as well as gaps in Kyrgidou and Hughes (2010)’s framework.
The paper extends the original SE model to incorporate multiple levels of analysis and a
broader domain, integrating environmental influences, explaining how resources are
managed in the process of SE to create value across time, and describing value
creation at multiple levels of analysis (value is not necessarily financial).
The SE model they advance incorporates environmental, organizational, and individual
foci into the dynamic process of simultaneous opportunity- and advantage-seeking
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behaviors. When used effectively, these behaviors create value for societies,
organizations, and individuals. This framework assumes the various causal factors are
interconnected (Hitt, et al., 2011). This model outlines three dimensions: resource/factor
inputs, resource orchestration processes, and outputs. Inputs include environmental
factors, organizational resources, and individual resources. The penultimate output is
creating wealth, while the ultimate outputs are societal benefits, organizational benefits,
and individual benefits. The processes of SE are exploration and exploitation activities.
These processes occur primarily at the firm level, while outputs or outcomes vary
across the different levels described above, resulting in a multilevel framework.
Hitt, et al. (2011 describe the ultimate outcome as achieving competitive success (by
creating value for customers of an established firm) or the creation of a new business.
Over time, both of these outcomes are intended to create value for shreholders. While
creating wealth (i.e. financial wealth) for owners is a primary goal,
owners/entrepreneurs may also achieve other forms of wealth, such as “socioemotional
wealth” and personal happiness (at an individual level). SE can also have societal
benefits (Hitt, et al., 2011). For example, increasing the wealth of owners should
contribute positively to additional economic activity (e.g., job creation, technological
advancement, and economic stability and growth) and thereby benefit society.
To achieve these long-term major outcomes, several interim outcomes are critical, such
as creating new technologies or developing innovations with value-creating potential.
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One interim but critically important outcome is achieving a competitive advantage
(Ireland and Webb, 2007; Ireland and Webb, 2009; Hitt, et al., 2011). In fact, long-term
survival is unlikely for a firm that is unable to achieve at least competitive parity (Hitt, et
al, 2011). Innovation often contributes to a competitive advantage (Ireland and Webb,
2007), but there are other activities necessary to achieving such an advantage (e.g.,
strategically managing resources) (Ireland, et al., 2003; Hitt, et al., 2011).
Around the same time as the above multi-level conceptualization was created, Kraus, et
al. (2011) used a developmental configuration approach to identify domains for a new
conceptual model of SE. Just as Schindehutte and Morris (2009) put forward complexity
theory as a tool for better understanding the complex interplay of these variables,
Kraus, et al. (2011) chose a different theoretical lens for the same endeavor – the
configuration approach. The following domains were chosen using this approach:
1. Resources
o Scarce vs. available
2. Capabilities
o Routinized vs. dynamic
3. Strategy
o Aggressive vs. defensive
o Content: niche, differentiation, cost leadership
o Process formalization
4. The entrepreneur/entrepreneurial leadership
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o Visionary vs. day-to-day
o Entrepreneurial mindset
o Entrepreneurial culture
o Entrepreneurial orientation
5. The environment
o Dynamic vs. stable
o Benign vs. harsh
6. The organizational structure
o Organic vs. bureaucratic
Their model combines the SE process model proposed by Ireland et al. (2003), the
domains proposed by Miller (1987) and adapted by Harms et al. (2009). Kraus, et al.
(2011) has mapped these domains along a matrix to reflect the differences in the
situations of the firm along its growth process.
Kraus, et al. (2011) submit that large established firms, SMEs and start-up firms need to
be differentiated according to the situation they operate in, in terms of the general
availability of resources, and in terms of the acquisition of firm-specific resources.
Accordingly, differences need to be distinguished regarding the organizational
structures and capabilities of different types of firms. For example, considerable
differences exist between small, mature firms in stable and specialized niches on the
one hand and young, growth-oriented firms on the other hand. While the former need to
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guard their market positions, incrementally developing their products and technologies,
carefully satisfying their customers’ needs in order to stay in business, young, growth-
oriented firms first have to test their business models, their offerings and their niches
and then shift their focuses towards extending the market niches and increasing market
share. Therefore, several partly counteracting forces are at work in the development
from a small to a large firm in terms of the need for entrepreneurship or the need for
strategic management (i.e. bureaucracy).
These domains are reflective of both the multilevel conceptual model proposed by Hitt,
et al. (2011) with the incorporation of the entrepreneur, as well as discussions on the
importance of organizational structure to be conducive for allowing a firm to engage in
effective strategic entrepreneurship (Ireland and Webb, 2009; Kyrgidou and Hughes,
2010; Hitt, et al., 2011). The inclusion of environment on the list is reminiscent of Ireland
and Webb (2009)’s work on SE in within the context of uncertainty. Components from
Ireland, et al. (2003)’s original conceptualization have also been included, including
entrepreneurial mindset and culture. Lumpkin and Dess (1996)’s entrepreneurial
orientation has also been included in the list, as an ode to one of the antecedents of the
SE construct. Even Porter (1985)’s iconic work in the field of strategy has been included
in the proposed strategy domain.
Certainly, Kraus, et al. (2011)’s work can be taken as an attempt to amalgamate much
of the discussion over the nature and components of SE previous to the paper being
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written, as well other antecedents in the literature to the SE construct. However, the
paper does not provide a distinct or clear new framework.
Key Points
The first conceptualizations of SE by Ireland, et al. (2001) and Hitt, et al. (2001) were
very simple and simply introduced the concept of strategic entrepreneurship into
organizational studies to meet the need for a construct that address logical intersections
between strategy and entrepreneurship.
Ireland, et al. (2003) developed the first full conceptualization of strategic
entrepreneurship. This linear model has many gaps, addressed by many other later
models and conceptualizations that highlighted these gaps and suggested that strategic
entrepreneurship is a far more complex process than initially proposed. Overall, the
conversation in the field has moved from the simple initial model proposed by Ireland, et
al. (2003) to much more complex conceptualizations in recognition of the need for
models that better capture the broad boundaries of the SE construct in terms of
applicability to many types of firms and a broader set of entrepreneurial initiatives.
These complex models have also been proposed in recognition of the complexities
behind the process of balancing both opportunity-seeking and advantage-seeking
behaviors. In essence, recent model provide a richer understanding of what is SE.
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Perhaps the two most important and fully-developed models are Kyrgidou and Hughes
(2010)’s non-linear, iterative model and Hitt, et al. (2011) multi-level conceptualization
that addresses SE at other levels of analysis in addition to the firm. Both of these
models present a much more complete view on the strategic entrepreneurship process,
introducing complexities to the model that reflect the complex balance between
exploration and exploitation that is inherent to SE. For example, Kyrgidou and Hughes
(2010)’s model includes iterative qualities that address the notion that firms must
continuously balance both sets of behaviors. Hitt, et al. (2011) model pushes that notion
further, including not only feedback loops in their proposed model, but also a multi-level
view on SE inputs and outputs. This multilevel view answers Schindehutte and Morris
(2009)’s concern over the limiting nature of a predominantly firm-level view in extant
literature; Hitt, et al. (2011)’s model introduces other levels of analyses (i.e. individual
and societal) to address this concern.
Other Frameworks
The frameworks discussed in this section have been to developed in an attempt to
apply SE to specific contexts; these include the case of knowledge spillovers (Agarwal,
et al., 2007; Agarwal, et al., 2010) and family firms (Webb, et al., 2010). A brief
overview of these frameworks shall be given, although they will not be the focus of the
overall discussion.
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Knowledge Spillover View of Strategic Entrepreneurship (KSSE)
Agarwal, et al. (2007) developed the knowledge spillover view of strategic
entrepreneurship (KSSE) and a corresponding framework that emerges from the
knowledge-based view of the firm, which argues that competitive heterogeneity is
caused by the creation and application of privately held, tacit knowledge. This view puts
forward the notion that value creation in a firm is a function of its ability to create new
knowledge and exploit it in the market. Agarwal, et al. (2007) identify KSSE as the “key
mechanism behind the process of creative construction (a concept that emerges from
the Schumpeterian concept of creative destruction), where the growth of entrants is not
necessarily at the expense of the incumbent.
The concept of KSSE emerges from the link between the endogenous creation of
opportunities to new firm formation from the intersection of entrepreneurship and
knowledge spillovers (Audretsch and Keilbach, 2007; Agarwal, et al., 2007; Agarwal, et
al., 2010). Agarwal, et al. (2007) posit that creative construction leads to regional and
industry level growth because spillover benefits from knowledge investment can be
harnessed using strategic entrepreneurship. They link these concepts to strategy
literature by identifying the possibility (in theory) to strategically manage knowledge
spillovers (and spill-ins) to enhance competitiveness. In sum, Agarwal, et al. (2007)
conceptualized an alternative process of creative construction that combines knowledge
from the field of strategic entrepreneurship with knowledge spillover literature.
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Knowledge spillover strategic entrepreneurship (KSSE) is defined as the creation of
entrepreneurial opportunity based on knowledge generated by investments made by
incumbent organizations (Agarwal, et al., 2007). It stems from the symbiotic relationship
between incumbent firms and other organizations and the people they employ in the
knowledge-generation process, since knowledge investments by existing institutions
enable individuals to jointly create new knowledge, some of whose benefits may be
appropriated outside of current organizational structure. KSSE is posited to generate
regional and industry growth due to two endogenous processes: the first relates to the
knowledge investments made by existing organizations, while the second relates to the
entrepreneurial action of individuals embedded in these contexts that result in new
venture formation.
Strategic Entrepreneurship in Family Firms
Webb, et al. (2010) developed a rudimentary framework for strategic entrepreneurship
within family-controlled firms drawing on extant strategic entrepreneurship research.
Research previous to this study had yet to distinguish the role of family involvement in
shaping strategic entrepreneurship (Webb, et al., 2010). Since there are key differences
between family-controlled firms and those firms without family involvement, extant
knowledge about strategic entrepreneurship does not fully reveal the situation
confronted by family-controlled firms (Webb, et al., 2010). In response, Webb, et al.
(2010) have sought to help fill the gap at the intersection of family firms and strategic
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entrepreneurship with a simple model and theoretically tests it against different
dimensions typical of family firms.
The framework they present focuses on three elements taken from Ireland, et al.
(2003)’s original conceptualization of SE that they posit are highly relevant to family
firms. These elements are:
1. Strategic entrepreneurship mindset
2. Balance of exploration and exploitation
3. Continuous innovation
Webb, et al. (2010)’s overall description for the simple framework is as follows.
Strategic entrepreneurship in family-controlled firms begins with an appropriate mindset
among executives. The decisions that are then made with this mindset shape the
exploration and exploitation processes (i.e. firm-level actions). The balance of
exploration and exploitation results in the key outcome: continuous innovation. This
theoretical study tests dimensions of family-business interaction (i.e. family-firm identity,
nepotism, justice, and conflict) against the SE framework put forth by to determine
implications for SE in family-controlled firms.
Family-controlled firms are characterized by a high degree of family ownership,
management, and the intention to maintain family involvement in the firm. Because of
its managerial and ownership influence, the family represents a unique bundle of
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resources (i.e. familiness) that may act as a source of competency or rigidity. Thus,
family control creates unique opportunities and challenges with regards to strategic
entrepreneurship. Webb, et al. (2010) submit that the value created or lost because of
the family’s bundle of resources depends on the nature of interactions within the family
and between the family and business
Lumpkin, et al. (2011) noted that the development of strategic entrepreneurship
research has overlapped with growth in family business research and is emerging
rapidly as a topic critical for value creation and economic strength in an introduction to a
special issue of the SEJ that focuses on SE and family business.
Lumpkin, et al. (2011) takes a similar approach to developing a conceptual framework
as did Hitt, et al. (2011), in that they developed a multilevel input-process-output model.
The authors note that the strategic entrepreneurship process has an input-process-
output nature and especially so in the context of family firms. This model is more
comprehensive than Webb, et al. (2010) for conceptualizing SE in a family firm context.
Inputs in this proposed framework include: individual resources, family resources, and
organizational resources. Processes in this framework include: orchestrating resources,
creating economic value, and creating socioemotional wealth. The outputs of this model
include: individual benefits, family benefits, organizational benefits, and societal
benefits. Lumpkin, et al. (2011) also noted four key contextual dimensions relevant to
SE in family firms: institutional environment/family as an institution; local
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conditions/national culture and geography; ownership regimes/multigenerational
involvement and succession; and temporal considerations/planning horizons and
business life cycles. The framework reinforces that context is an important aspect of
firm survival and success.
Key Points
Work in developing specific frameworks that aim to apply strategic entrepreneurship to
different concepts is evident. Frameworks for both the knowledge spillover view of
strategic entrepreneurship (KSSE) (Agarwal, et al., 2007; Agarwal, et al., 2010) and
strategic entrepreneurship in family firms (Webb, et al., 2010; Lumpkin, et al., 2011)
have been introduced, indicating that both are viable areas for future research. This is
interesting, as a well-established and accepted conceptualization for SE (in general)
has not yet been reached, but specific frameworks have still been developed. It may not
be surprising to see additional frameworks like these for specific contexts pop up in in
the field in the near future.
One specific framework of note is Lumpkin, et al. (2011)’s SE framework for family
firms, as it takes a multilevel approach similar to Hitt, et al. (2011). Although this is only
the second conceptualization to push for a multilevel approach to studying and
conceptualization SE, the emergence of a second multilevel framework indicates that
this approach may actually become a popular one for the SE field.
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Strategic Entrepreneurship’s Limited Empirical History
This section will provide a brief summary and analysis of strategic entrepreneurship’s
limited empirical history as a construct and what that means to the field. Two
empirically-tested frameworks shall be discussed, as well as measures used for SE in
the literature reviewed.
Empirically-Tested Frameworks and Results
Although the empirical history of the strategic entrepreneurship field is extremely
limited, two of the 20 empirical studies included in this literature review aim to refine the
conceptual models of SE by testing them in an applied business setting (Luke and
Verreynne, 2006; Luke, et al., 2011). Luke and Verreynne (2006) and Luke, et al.
(2011) set out to test strategic entrepreneurship in applied business settings
(specifically, in the context of public organizations). Although their findings may not be
global in terms of applicability, the discussion up until this point has been wholly
focused on conceptual frameworks. However, it is valuable to discuss some of the
insights from the limited empirical work done within the SE field. These two studies are
important to include in this analysis, as they provide an empirical basis for some of the
conceptualizations discussed above that have only been theoretically conceptualized
and not yet tested. Additionally, these empirical studies provide evidence for the
existence of strategic entrepreneurship in applied business settings, meaning that SE is
not a concept that is completely divorced from reality or conceived in a vacuum.
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Luke and Verreynne (2006) submit that the inconsistencies in the different
conceptualizations of SE (analyzed above) suggest that the nature of strategic
entrepreneurship is still being uncovered and needs to be understood in a practical
setting – in other words, the theoretical conceptualizations formulated thus far needs to
be put to the test in an applied business setting. In other words, Luke and Verreynne
(2006)’s study emerges from the suggestion that further investigation is required to
develop a better understanding of SE by examining strategic entrepreneurship in
practice to ultimately develop a theoretical framework for SE that is empirically
supported and driven. Given the absence of empirical research on strategic
entrepreneurship and the emphasis on conceptual frameworks within contemporary
studies, a qualitative approach was considered appropriate. As such, Luke and
Verreynne (2006) put together a qualitative empirical study (using case studies of state-
owned enterprises in New Zealand) to come up with a list of empirically-supported
elements of strategic entrepreneurship as a step towards a model of SE for state-owned
enterprises (i.e. organizations in the public sector). However, the primary goal of the
study was to confirm the existence of strategic entrepreneurship as a phenomenon
within these firms.
Therefore, Luke and Verreynne (2006)’s study had two research goals:
Is there evidence of strategic entrepreneurship in state-owned enterprises?
What are the underlying elements that characterize strategic entrepreneurship?
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The results of the study reveal clear support for various elements within existing
strategic entrepreneurship frameworks such as innovation (Hitt et al., 2001) and growth
(Ireland et al., 2001). But, their findings revealed a distinct lack of support for other
elements presented as central to strategic entrepreneurship in earlier
conceptualizations such as internationalization (Hitt et al., 2001) and top management
teams and governance (Ireland et al., 2001). The elements identified also reinforce
several dimensions from previous conceptual studies (Hitt, et al., 2001; Ireland, et al.,
2001; Ireland, et al., 2003).
Additionally, the study establishes strategic entrepreneurship as a specific, observable
construct in an applied business setting. Strong associations between the case data
and SE literature provides practical support for the validity of results, while weak
associations between case data and the literature can point to either a validity problem
with the data analysis or a flaw with current SE theory. (Luke and Verreynne, 2006)
This clarification has provides a basis from which further examination of strategic
entrepreneurship may proceed (Luke and Verreynne, 2006), such as the duplication of
a similar study in a private sector organizational context (as the public sector setting of
this study was a noted weakness of the study). Therefore, based on the results of the
study, Luke and Verreynne (2006) submit that incidences of strategic entrepreneurship
clearly exist within a public sector context and are not limited to private sector contexts
(i.e. the contexts that other extant literature is discussing).
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Six elements of strategic entrepreneurship were supported by all three of the cases
included in the study. These six elements are posited to be empirically-supported
components of strategic entrepreneurship. These components are:
1. Opportunity identification
2. Innovation
3. Acceptance of risk
4. Flexibility
5. Vision
6. Growth
Luke and Verreynne (2006) also reveal six elements that assist in fostering and/or
supporting strategic entrepreneurship by establishing a strategic context for
entrepreneurial activity. These elements include:
1. Strategy-making processes
2. Culture
3. Branding
4. Operational Excellence
5. Cost efficiency
6. Transfer and application of knowledge
They posit that each of these six elements remained central to the project studied and
had effectively assisted each business in establishing a competitive advantage. Of
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course, further empirical studies would have to be conducted to ensure these claims are
far more global in nature and apply to other applied business contexts (other than public
enterprise contexts). Luke and Verreynne (2006) also reinforce the notion of strategic
entrepreneurship as representing the integration of entrepreneurial and strategic
actions, claiming that this is supported in an applied business setting.
Luke, et al. (2011) builds on Luke and Verreynne (2006) by introducing a more
comprehensive model of SE based on a large, qualitative study of state-owned firms in
New Zealand. The paper operates from the notion that strategic entrepreneurship is
entrepreneurial activity directly aligned with and leverages a business’s core
competencies. Luke, et al. (2011) propose a refined conceptual framework of strategic
entrepreneurship based on empirical data, comprised of four key concepts. First, they
define strategic entrepreneurship as “ a distinct process, founded on bringing something
new to the market; a combination of innovation, opportunity identification, and growth.”
They deem this the central entrepreneurial elements. Secondly, they define the
strategic context of SE in four parts:
1. Entrepreneurial activity
2. Applied in the strategic context of business
3. Which develop expertise within their core skills and resources, and
4. Leverage from that by transferring and applying their knowledge of those skills
and resources to new products, services, or markets.
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Third, they posit that the nature of strategic entrepreneurship may take various forms,
ranging from incremental to radical innovations, with deliberate to emergent
approaches. Lastly, they submit that strategic entrepreneurship offers the potential for
financial benefit, subject to managing changes in both internal and external forces (i.e.
external environment). This last point is reminiscent of Ireland and Webb (2009)’s
article about managing uncertainty, where SE is suggested as an effective way to
maintain firm success in dynamic environments.
This study revealed a few interesting findings. First, although Luke, et al. (2011)’s
findings somewhat support the notion that strategic entrepreneurship is associated with
value creation (in this case, wealth), their findings are neither exclusive nor conclusive.
Secondly, although scholars have argued that innovation within strategic
entrepreneurship must be both incremental and radical (Ireland et al., 2003), the
findings do not lend support to this notion; rather the strategic entrepreneurship
activities observed and examined were predominantly incremental in nature, indicating
incremental innovation is a viable pathway for strategic entrepreneurship. The study
also suggests that he nature of strategic entrepreneurship activity is not bound by its
roots and can change from incremental to radical, emergent to deliberate.
While neither of the studies discussed above are particularly groundbreaking in terms of
findings, they represent the humble beginnings of an empirical foundation for the
strategic entrepreneurship field. Perhaps the most important finding above is the
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evidence for strategic entrepreneurship existing within a practical business context.
Therefore, all the previous theoretical conceptualizations of SE (and even the mere
suggestion that such a construct exists and has a practical basis) have merit. Of
course, although the two previous studies have attempted to create an empirically-
supported framework for SE, specific limitations in the scope and resultant conclusions
of these reports highlights the need to further extend the work, and to generate a more
thorough conceptualization for the field.
The Need for an Accepted Measure of Strategic Entrepreneurship
As previously mentioned, the SE field has a limited empirical history and many of the
theoretical conceptualizations and descriptions of the construct still have yet to be
tested, although some have already attempted to test different components (Luke and
Verreynne, 2006; Monsen and Boss, 2009; Luke, et al., 2011). Foss and Lyngsie (2011)
also submit that the lack of direct empirical testing in the SE literature may result from
the tendency to carryover explanatory variables and constructs from the established
entrepreneurship literature. Although such variables and constructs may be accurate
and robust within the entrepreneurship literature (for example, entrepreneurial
orientation or EO), they may not be directly applicable in the analytic focus of strategic
entrepreneurship research. While opportunity discovery is also a critical element of SE,
entrepreneurship constructs and related explanatory variables are unlikely to capture
the continuous aspects of how firms strategically leverage these opportunities (Foss
and Lyngsie, 2011).
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Nevertheless, a few empirical studies borrow accepted measures from entrepreneurial
constructs as a proxy for measuring SE, although again, these empirical studies are
few. They are discussed in greater detail below. In essence, this problem of measures
is not one unique to strategic entrepreneurship alone; rather, other concepts and
constructs within strategic management and other fields have experienced some of the
same problems, hindering the empirical progress of the fields.
Qualitative Studies
As there is yet to be an accepted measure for strategic entrepreneurship, Luke and
Verreynne (2006) and Luke, et al. (2011) carried out qualitative studies in the form of
case studies as the basis of their empirical analysis. A qualitative approach was
considered appropriate given the absence of empirical research on strategic
entrepreneurship and the emphasis on conceptual frameworks within contemporary
studies. Other than these two studies, as a distinct research field SE does not yet
include much robust empirical testing of its main constructs and/or dominant conceptual
models. Even empirical studies relating SE to other concepts (i.e. Kansikas, et al., 2013
and familiness in family firms) have employed qualitative methods. Although SE has
been rather quick to converge on an overall generally accepted theoretical model with
wealth creation as its dependent variable (e.g. Ireland, et al., 2003; Ireland and Webb,
2007; Foss and Lyngsie, 2011), few empirical studies test conceptualized causal
relationships.
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Entrepreneurial Orientation (EO)
Monsen and Boss (2009) used the existing entrepreneurial orientation (EO) scale
originally put forth by Lumpkin and Dess (1996) – a reliable and valid scale used in
many other studies – as a proxy for measuring some aspects of SE. They posit that the
multidimensional concept of EO (e.g., risk taking, innovativeness, proactiveness) most
closely represents these two SE components from Ireland, et al. (2003)’s framework:
1. The strategic management of resources and applying creativity
2. Developing innovation
Monsen and Boss (2009) suggest that given that the strategic entrepreneurship is a
domain in its infancy (Ireland, 2007), scholars need to be creative and innovative in
selecting constructs and measures to empirically investigate the various aspects of their
model of strategic entrepreneurship. They selected the EO scale as the history and
origins of the construct is quite similar to that of SE. Both constructs also have some
similar logic behind them, where EO can be regarded as the degree to which a firm acts
entrepreneurially in terms of innovativeness, risk-taking, and proactivity is related to
dimensions of strategic management (Barringer and Bluedorn, 1999; HItt, et al., 2001;
Monsen and Boss, 2009). Covin and Slevin (1991) proposed a conceptual model of
entrepreneurship as firm behavior similar to Ireland, et al. (2003)’s conceptualization of
SE in which external variables, strategic variables, and internal variables impact a firm’s
entrepreneurial posture and in turn firm performance. Monsen and Boss (2009) posit
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that while this particular application of EO is relatively new (i.e. as a proxy for
measuring SE), the logic is rooted in a long and ongoing research tradition. They treat
EO as a multidimensional construct in their study, assuming it has three dimensions
that can vary independently of one another:
1. Risk taking
2. Innovativeness
3. Proactiveness
Shirokova, et al. (2012) also employed EO as part of a proxy for measuring SE, but
within a larger model that they define for SMEs. This paper defined a model of SE
where the components of SE are exploration and exploitation (both measured).
Exploration is defined as being composed of EO and entrepreneurial values, and
exploitation is defined as investments in internal resources, knowledge-related
resources, organizational learning, developmental changes, and transitional changes.
The components of exploration and exploitation (including EO) described by Shirokova,
et al. (2012) were the independent variables of the study.This paper based their scale
for EO off of Covin and Slevin (1989)’s operationalization of EO. The goal of their study
was to determine whether Russian SMEs can develop SE as a source of competitive
advantage.
Foss and Lyngsie (2011) also discuss how EO has been used as a proxy for SE. They
suggest that EO is an example of a construct that however aligns closely with the focus
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of SE (but also antedates the SE view). They suggest that EO “... refers to the strategy-
making practices that businesses use to identify and launch corporate ventures” (Dess
and Lumpkin, 2005). The clear overlap between the dimensions of EO and SE
illustrates why EO has been one of the favorite empirical constructs in strategic
entrepreneurship research (Foss and Lyngsie, 2011). Foss and Lyngsie (2011) note
that Rauch, et al. (2009) found that the EO construct had been used in more than a
hundred studies and that the relationship between EO and firm performance was robust
across studies and to minor alterations of the measurement scale. However, as
previously mentioned, carrying over explanatory variables and constructs from extant
entrepreneurship literature raises a critical concern regarding whether or not firms’
continuous leveraging of entrepreneurial opportunities is actually being empirically
captured by the explanatory variables (Foss and Lyngsie, 2011). Foss and Lyngsie
submit that accurately testing conceptual SE models would require longitudinal
examination of how firms’ strategic intent affects their ability to transform flashes of
wealth creation, from exploited entrepreneurial opportunities, into sustained competitive
advantage.
Stevenson’s Model of Entrepreneurial Management
Kyrgidou and Petridou (2011) studied the effect of competence exploration and
competence exploitation on strategic entrepreneurship. Recognizing the lack of an
accepted scale for SE, they used Brown, et al. (2001)’s scales that operationalize
Stevenson (1983)’s model of entrepreneurial management as a proxy for SE,
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suggesting that they are akin to the components of SE. This scale contrasts
entrepreneurial with administrative (or strategic, according to Kyrgidou and Petridou
(2011)) behavior. Kyrgidou and Petridou (2011) reorganized these Likert scales to
capture the four components of SE. The original scales had polar ends representing
entrepreneurial behaviour and strategic behaviour, but Ireland, et al. (2003)‘s model
does not specify that a firm is either more entrepreneurial or less strategic on a scale;
rather, it specifies that a firm’s relative expertise at the entrepreneurial and strategic
components of their model is what determines the degree of strategic entrepreneurship.
Therefore, Kyrgidou and Petridou (2011) altered the scales accordingly for their study.
The variables measured include: entrepreneurial mindset, managing resources
strategically, innovation, competitive advantage, competence exploration, and
competence exploitation.
Innovation
Foss and Lyngsie (2011) also discussed the possibility of innovation being used as a
measure for SE – however, they quickly strike down this notion, even though innovation
is perhaps the most examined dimension of entrepreneurial orientation. However, unlike
the extant literature exclusively focusing on firms’ innovativeness and innovative
capabilities (i.e., the innovation literature), innovation by itself does not deem a firm
entrepreneurial (Covin and Miles, 1999; Foss and Lyngsie, 2011). Instead, firms must
engage in both exploration (opportunity-seeking activities) and exploitation (advantage-
seeking activities) in order to create sustained competitive advantage, according to SE.
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Therefore, innovation by itself cannot possibly be a good measure for SE within an
organization.
Key Points
Strategic entrepreneurship, both as a field and as a construct, lacks a solid empirical
foundation. However, two studies (Luke and Verreynne, 2006; Luke, et al., 2011) have
contributed to the field as being the first two studies that have studied strategic
entrepreneurship in an applied business setting. In fact, the first provides an early
empirical confirmation that strategic entrepreneurship is indeed an observable
phenomenon that exists in a practical setting – a major step in advancing the field
empirically. However, both of these studies are limited by two items: they test
conceptualizations primarily based on Ireland, et al. (2003)’s model of SE (a very basic
and linear model), and both studies are conducted in a public organization context.
Nevertheless, the studies represent the humble beginnings of an empirical foundation
for the field. Many more studies that test more complex models of SE (such as those by
Kyrgidou and Hughes (2010) or Hitt, et al. (2011)) in other organizational settings are
needed.
Furthermore, no accepted measure of strategic entrepreneurship yet exists. Others
have used proxies such as EO and a scale based on Stevenson’s Model of
Entrepreneurial Management; however, scholars posit that these proxies are
insufficient, as they are unlikely to capture key elements of SE (such as the continuous
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balance of exploration and exploitation). Luke and Verreynne and Luke, et al. (2011)
used qualitative methods to address this issue.
Successful Implementation of Strategic Entrepreneurship
A review of the extant literature on SE reveals key insights as to how firms can
successfully implement strategic entrepreneurship within their organizations, as well as
the various benefits of effective strategic entrepreneurship. Both new ventures and
established firms can and need to be simultaneously entrepreneurial and strategic (Hitt,
et al., 2001); in other words, firms of all sorts should engage in SE in order to secure
long-term value creation. Those firms, large and small, that “learn how to integrate
strategic entrepreneurship and collaborative innovation are well positioned to create
wealth…[because] concentrating on either strategy or entrepreneurship to the exclusion
of the other enhances the probability of firm ineffectiveness or even failure”(Ketchen, et
al., 2007). SE is useful for all organizations, including family-oriented firms (Webb, et
al., 2010) and public organizations (Luke and Verreynne, 2006; Luke, et al., 2011).
Overall, SE can be a tool for firms to remain successful in uncertain and dynamic
competitive environments.
The discussion below outlines some key take-away points from the literature as to what
effective SE within a firm entails and how SE can lead to value creation. Additionally,
Schendel and Hitt (2007) posit that beyond benefiting simply the organization itself,
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strategic entrepreneurship can create advances from which society can benefit “through
new value propositions that better serve the needs of some segment, or the whole, of
society.” However, one should keep in mind that the current descriptions of SE are
nowhere near perfect. Therefore, the discussion below outlines some general features
of effective strategic entrepreneurship, but keep in mind that these claims have not yet
been empirically tested in applied business settings. Future research can validate these
claims.
SE allows those leading and managing firms to simultaneously address the dual
challenges of exploiting current competitive advantages (the purview of strategic
management) while exploring for opportunities (the purview of entrepreneurship) for
which future competitive advantages can be developed and used as the path to value
and value creation. Successful strategic entrepreneurship results from the correct
balance of exploration and exploitation activities, which ultimately leads to value
creation (Ireland and Webb, 2007; Ketchen, et al., 2007; Ireland and Webb, 2009; Hitt,
et al., 2011). This balance positions a firm to take advantage of existing and future
opportunities. Continuous innovation (i.e. a stream of newness) is at the core of what
can be achieved with a successful balance between exploration and exploitation
(Ireland and Webb, 2007). Innovation in the form of new products, new processes, and
new markets are drivers of wealth creation. Effective SE can lead to a combination of
both effectiveness and efficiency-oriented forms of newness. Since competitors will
eventually determine how to imitate a firm’s value-creating competitive advantages,
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continuous innovation can be the source of sustained value and wealth creation over
time (Hitt, et al., 2011). Relatively speaking, “successfully using SE challenges large,
established firms to learn how to become more entrepreneurial and challenges smaller
entrepreneurial ventures to learn how to become more strategic” (Hitt, et al., 2011).
Kraus, et al. (2011) suggest that SE promotes strategic agility, flexibility, creativity and
continuous innovation. They also posit that strategic entrepreneurship increases the
number of new start-up firms and enhances the success of start-up firms and SMEs.
Additionally, they suggest that SE is an instrument in transforming administration-
oriented employees into intrapreneurs who exercise entrepreneurial behavior within
their respective organizations (Hitt et al., 2002; Hitt, et al., 2011).
Ireland and Webb (2007) posit that successful organizations shall be the ones in which
strategic entrepreneurship will be used to deal with the organizational tension that
surfaces as firms try to simultaneously emphasize today what they already do well
(relative to competitors) while exploring for opportunities to build the foundation for their
future success. An ability to anticipate and properly respond to environmental change is
one of the important outcomes of effective SE (Ireland and Webb, 2007; Ireland and
Webb, 2009). With SE, firms rely on innovation and the exploitation of innovation as the
source of sustainable competitive advantages and effective responses to continuous
environmental changes.
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Exploration allows a firm to benefit from diverse investments, while exploitation allows a
firm to benefit from focus (i.e. exploiting a particular opportunity). Exploitation enhances
current levels of performance by incrementally extending the firm’s established
knowledge base, supporting the firm’s exploration efforts. Exploration occurs as the firm
integrates diverse knowledge with existing knowledge stocks (i.e. innovation through
recombination). Absorbing new knowledge to which the firm gains access while
exploring becomes the foundation for future competitive advantages (Ireland and Webb,
2007). In fact, Kyrgidou and Hughes (2011)’s study concluded that both competence
exploration and exploitation positively influence all four components of strategic
entrepreneurship as proposed by Ireland, et al. (2003). Therefore, it is necessary for
firms to master both of these types of activities and to transition between the different
types as necessary in order to achieve long-term growth and value creation.
Balancing entrepreneurship and strategic management can help firms avoid
excessively engaging in risk-taking activities while preventing organizational inertia
caused by iteratively adding to present advantages (Kyrgidou and Hughes, 2010). The
successful balance between opportunity-seeking and advantage-seeking activities by
firms can help firms look for future competitive advantages in periods of uncertainty,
while still managing to continue to exploit current competitive advantages.
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It is important to recognize that the right balance between exploration and exploitation
varies across different industries and across different firms. The most effective balance
may be partially dependent on the type of competitive environment in which the firm
competes (Hitt, et al., 2011). Achieving this balance also requires an organizational
structure capable of supporting the twin needs of exploitation and exploration (Hitt, et
al., 2011). The structure of the firm should always reflect an entrepreneurial culture and
should foster and support the continuous search for entrepreneurial opportunities that
can be exploited and enacted as sustainable competitive advantages (Kraus, et al.,
2011). Lastly, a balance must be continuously maintained for a firm to be successful;
SE is a continuous process (the fourth critical dimension).
Given that firms typically seek radical innovations when exploring, exploration activities
are often characterized by long-term outcomes and significant uncertainty that tends to
be associated with technological capabilities, market interest, competition, availability of
raw materials, and so forth (Ireland and Webb, 2009). Therefore, the key to successful
exploration processes is being able to gauge the potential effectiveness of the
resources (Ireland and Webb, 2009) and strategically managing those resources
(Ireland, et al., 2003) while managing uncertainty to mobilize them for SE activities.
Siren, et al. (2012) posit that successful strategic entrepreneurship process also
requires the continuous development, utilization, and even radical renewal of its
resources and capabilities. They describe the importance of organizational strategic
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learning for the SE process, and submits that learning how to acquire, bundle, leverage,
and renew the firm’s strategic resources is critical to achieving a competitive advantage
and creating value (Hitt et al., 2011). This makes sense, as the SE construct emerges
from the resource-based view (RBV) of the firm and emphasizes the strategic
management of resources. They also submit that the importance of learning is
particularly evident for firms operating in dynamic environments, such as the
information technology industry. In these environments, organizations that can convert
information into knowledge and learning will succeed over those that do not (Siren, et
al., 2012).
As Ireland and Webb (2009) put it, “the successful use of strategic entrepreneurship,
however, requires more than a shift in the mindset of the firm’s decision
makers…[i]mplementing strategic entrepreneurship involves corresponding shifts in the
firm’s structure, culture, and operations.” They go on to discuss how the transition
between exploration and exploitation activities within an organization is a vital part of
strategic entrepreneurship (as discussed extensively above). Effective SE should
facilitate the firm’s management of both resources and uncertainty to efficiently and
effectively meet current demands while positioning the firm to successfully meet future
demands. Thus, the entire organization of a strategically entrepreneurial firm differs
from that of reactive firms that choose to only respond to changes in the external
environment (Ireland and Webb, 2009).
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As a final note for this section, Kansikas, et al. (2012) submit that the drivers of
strategic entrepreneurship are entrepreneurial leaders who focus on developing actions
that lead to opportunity-driven decision-making. They describe entrepreneurial leaders
as “…stress-resistant, unselfconscious, assertive, non-experimental in their actions,
conscientious, conformist and competitive.”
Key Points
Successful strategic entrepreneurship centers on striking the right balance between
opportunity-seeking and advantage-seeking behaviors. This balance differs across
firms and across industries – there is no one-size-fits-all solution. Successful SE also
requires a comprehensive shift within an organization in order for it to be successful;
shifts in a firm’s structure, culture, and operations are needed to achieve an effective
balance.
Successful implementation of strategic entrepreneurship allows firms to maximize
wealth or value creation – a primary benefit. SE allows those leading and managing
firms to simultaneously address the dual challenges of exploiting current competitive
advantages (the purview of strategic management) while exploring for opportunities (the
purview of entrepreneurship) for which future competitive advantages can be developed
and used as the path to value and wealth creation.
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In essence, because “concentrating on either strategy or entrepreneurship to the
exclusion of the other enhances the probability of firm ineffectiveness or even failure”
(Ketchen et al., 2007), SE involves both entrepreneurship’s opportunity-seeking
behaviors and strategic management’s advantage-seeking behaviors and can useful for
all organizations.
Finally, entrepreneurial leaders are the drivers of effective strategic entrepreneurship.
Challenges of Strategic Entrepreneurship
Successfully using strategic entrepreneurship as a path to enhance firm
competitiveness is challenging (Ireland and Webb, 2007; Ireland and Webb, 2009).
Much of the challenge of balancing exploration and exploitation is due to the
antagonistic nature of the two activities, which has been highlighted at the conceptual
level in much of the literature (Schindehutte and Morris 2009). Both small and large
firms face challenges while pursuing strategic entrepreneurship (Ketchen, et al., 2007).
Because both the exploration for future sources of competitive advantage and the
exploitation of existing sources of competitive advantage draw upon firms’ limited
stocks of resources, decision makers face a tension concerning how to balance their
firm’s current and future needs (Ireland and Webb, 2009). Given the suggested
importance of strategic entrepreneurship, it is critical for firms to learn how to effectively
transition from exploration to exploitation processes (Ireland and Webb, 2009).
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Kyrgidou and Petridou (2011) also note that the tendency of competence exploitation to
crowd out competence exploration risks compromising the entrepreneurial components
of strategic entrepreneurship. Equally, the effect of competence exploration and its
tendency towards discovery, experimentation, and radical change might inhibit a firm
from capitalizing on its current resources and advantages in increasingly optimal ways.
Also, managers tend to invest more resources into competence exploitation than
competence exploration since the latter’s benefits are distant and uncertain. This bias
can create a dysfunctional emphasis on one set of activities over another that becomes
self-reinforcing over time. Under this condition, the balance between entrepreneurial
and strategic activity may shift, disrupting strategic entrepreneurship.
Tushman and O’Reilly (1996) specify that competence exploration and exploitation
generate differing behavioral and structural demands (and accompanying investment
requirements), which creates dysfunction that compromises organizational endeavors.
By extension, this tension may cause competence exploitation to disrupt the
entrepreneurship components of strategic entrepreneurship and competence
exploration to disrupt its strategy components, in theory (Kyrgidou and Petridou, 2011).
The entrepreneurial components of strategic entrepreneurship require flexibility and
novelty, while the strategic management components seek stability and predictability
(Hitt, et al., 2011). Achieving this balance is challenging because firms have finite
resources, meaning that trade-offs often must be made regarding the amount of
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resources allocated to exploiting current competitive advantages and those allocated to
exploring for opportunities and new sources of advantage for the future. Therefore, an
organizational structure capable of supporting the twin needs of exploitation and
exploration is required (Kyrgidou and Hughes, 2010; Hitt, et al., 2011).
Additionally, while SE seems to be a promising source of finding, creating, and
maintaining sustainable competitive advantages, the complexity of the individual sets of
actions, as well as the actions taken to transition from exploration to exploitation (and
vice versa) poses significant challenges (Ireland and Webb, 2007). Further, firms use
different processes to explore and to exploit, a fact that complicates efforts to balance
exploration- and exploitation- oriented behaviors (Ireland and Webb, 2009). The
exploration process involves the set of activities through which firms seek to recognize
new ideas and opportunities that serve as the foundation for future sources of
competitive advantage. While Ireland, et al. (2003)’s initial linear conceptualization of
SE did not reflect the complexities of SE and its individual components, later and richer
conceptualizations since then to capture the complexities and nuances of the strategic
entrepreneurship process (i.e. Kyrgidou and Hughes, 2010; Hitt, et al., 2011; Kraus, et
al., 2011).
Although a combination of both behaviors is required to achieve maximum results and
value creation (Ireland, et al., 2001; HItt, et al., 2001; Ireland, et al., 2003; Ireland and
Webb, 2007; Ireland and Webb, 2009; Hitt, et al., 2011), SE poses different challenges
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for different firms of different sizes or in different stages of their life cycle (Ketchen, et
al., 2007; Kyrgidou and Hughes, 2010). For example, new venture firms find it difficult to
obtain and manage resources strategically to establish and sustain a competitive
advantage (Ireland, et al., 2003). In the initial stages of venture creation and launch,
entrepreneurs often have to do more with less and use what abilities and resources
they have at their disposal with a minimum of capital and a maximum of ingenuity and
improvisation (Kyrgidou and Hughes, 2010). Additionally, while small firms’ opportunity-
seeking skills may be strong, their limited knowledge stocks and lack of market power
inhibit their ability to enact the competitive advantages necessary to appropriate value
from opportunities the firms choose to pursue (Ketchen et al., 2007). Entrepreneurial
ventures (of any size) are characterized by high degrees of uncertainty because of the
emphasis on innovation and entrepreneurial outmaneuvering. Therefore, managers
must simultaneously maximize their ability to recognize and pursue new business
opportunities while minimizing the strategic risk related to venture development by
improving the formation, management, and leverage of temporary competitive
advantages (Ireland et al., 2001; Kyrgidou and Hughes, 2010) – a problem of creating
and sustaining SE. In essence, new ventures are more likely to be flexible and
entrepreneurial, but less likely to have the needed resources and capabilities to build
competitive advantages.
Established mid-to-large firms face very different conditions (Ireland, et al., 2003;
Ketchen, et al., 2007; Kyrgidou and Hughes, 2010). Large firms are skilled at
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establishing competitive advantages, but their heavy emphasis on the efficiency of their
existing businesses often undermines their ability to continuously explore for additional
opportunities. Therefore, it is difficult for established firms with competitive advantages
to continue to seek and exploit entrepreneurial opportunities (Kyrgidou and Hughes,
2010). Although their resource base is greater, their entrepreneurial capacity for
innovativeness and risk-taking are constrained by structures, systems and processes
set-up over time to formalize their operations towards achieving efficiency and
effectiveness (Mintzberg, 1979; Kyrgidou and Hughes, 2010). Still, established and
larger sized firms do have considerably greater knowledge and competence at creating,
shaping and deploying competitive advantages but nevertheless, there exists an
entrepreneurial imperative for firms to innovate and adapt rapidly to change or face
obsolescence and failure (Hitt et al., 2001). Established firms lack the administrative or
other flexibility (Ireland, et al., 2003). For example, some opportunities might
cannibalize the sales of existing products and services. Additionally, established firms
risk losing market to a disruptive innovation introduced by a smaller entrepreneurial firm
(Ireland, et al., 2003). Competitive advantages are temporary, and firms must
continuously explore new opportunities over and above merely exploiting its resource
advantages over other firms, which explains why small firms and new entrants can
outmaneuver larger market incumbents (Kyrgidou and Hughes, 2010). On the other
hand, smaller firms need to establish a market foothold before an established
competitor takes market share by introducing substitute products. Nevertheless, SE is
relevant across the full life cycle of organizations (Hitt, et al., 2011).
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Ketchen, et al. (2007) suggest that collaborative innovation (the pursuit of innovations
across firm boundaries through the sharing of ideas, knowledge, expertise, and
opportunities) can help small and large firms overcome their respective challenges. For
small firms, pursuing entrepreneurship collaboratively allows them to preserve their
creativity and flexibility while mitigating the inherent liabilities of smallness. For large
firms, collaborative innovation permits them to exploit their advantage-creating skills
while concurrently exploring for opportunities outside their current domain.
Ireland and Webb (2007) claim that, to date, few of today’s firms have been able to
achieve an entrepreneurially-effective balance between exploration and exploitation.
The desired balance between exploration and exploitation also differs among firms
because each firm has a unique mix of resources and capabilities. They offer the
following advice to managers to help offset the challenge of implementing strategic
entrepreneurship. Managers can take three key actions to positively contribute to help
firms achieve a better balance between exploration and exploitation:
1. Understanding the exploration and exploitation balance
o By no means does this firms should try to achieve a 50/50 balance in terms
of resource allocation; rather the balance is dependent on how dynamic the
external environment is in which a firm operates
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2. Identifying the optimal balance
o Analyses of the firm’s external and internal environments are required to find
the optimal balance
o Firm strengths and weaknesses
o Environmental opportunities and threats
3. Reintroducing the middle-level manager, who play two vital roles in SE
o First, these managers bridge the gap between operational- and strategic-
level managers. Because of this, middle-level managers are instrumental in
how a firm’s strategy becomes operationalized, as well as in keeping top
management teams aware of opportunities identified in lower organizational
levels.
o Second, middle-level managers are ideally positioned to separate the
operationally, structurally, and culturally different processes of exploration
and exploitation
Ireland and Webb (2007) noted that in spite of the benefits of strategic
entrepreneurship, firms may find balancing exploration and exploitation to be difficult for
several reasons. First, although exploration contributes to strategic flexibility (a skill
through which the firm is able to acquire and subsequently use information to
appropriately respond to change) (Hitt, et al., 2011), the outcomes of investments made
in the firm’s exploratory capabilities are uncertain. Because some stakeholders often
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are uncertainty avoiders, exploratory actions may lack appeal, due to their experimental
nature and the lack of certainty that positive outcomes will accrue from them.
Employees (another stakeholder group) may find exploratory actions to be difficult and
undesirable, as exploration typically calls for employees to use novel routines to
complete their work instead of continuing to use familiar patterns of organizational
action. In other words, employees may be more comfortable with the known, rather than
the unknown. Therefore, exploitation, which takes place by exercising familiar
organizational routines, is preferred at the expense of exploration, which takes place by
exercising unfamiliar routines (March, 1991; Ireland and Webb, 2007). Some
organizational observers label this a condition in which exploitation tends to drive out
exploration (Ireland and Webb, 2007).
The fragility of the process used to transition from exploration to exploitation is a second
reason companies find developing an appropriate balance between the two types of
actions to be difficult (Ireland and Webb, 2007). Operational, structural, and cultural
changes must take place for a firm to transition from exploring for new opportunities for
future successes to exploiting current competitive advantages as the source of today’s
competitive success (Ireland and Webb, 2007). Part of the challenge is the differences
in the operational, structural, and cultural attributes associated with exploration and
exploitation activities (Ireland and Webb, 2009). Thus, when transitioning, the firm
moves from a concentration on diversity with the intent of creating newness (i.e.,
seeking new opportunities, new market space, and new advantages) to a concentration
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on successfully using current skills and routines as the source of today’s advantages
(i.e. exploitation) (Ireland and Webb, 2007; Kyrgidou and Hughes, 2010). The transition
process challenges a firm as organizational changes reintroduce liabilities of newness,
and the process is often time-consuming and can be resource-draining (Ireland and
Webb, 2009).
Finally, Ireland and Web (2009) provide some guidelines as to how firms should
manage the transition between exploration and exploitation in dynamic and uncertain
environments. They posit that firms in all types of industries face uncertainty created by
highly dynamic environments, and what constitutes an efficient and effective balance
between exploitation and exploration depends on factors such as the level of
dynamism, the market cycle, and the firm’s strengths and weaknesses. The five key
tools that they suggest to help firms overcome the challenges in transitioning are:
1. Forming and transforming teams
2. Setting expectations
3. Establishing a clear timeline with milestones
4. Developing contingency plans
5. Justifying changes
Although this list is helpful as a first stab at the problem, more research needs to be
done in determining the most effective methods for mitigating the challenges associated
with transitioning from opportunity-seeking to advantage-seeking activities (and vice
135
versa). Empirical support for some of these suggestions would further develop this area
of research.
Key Points
The biggest challenge firms face in implementing SE is achieving the right balance
between exploration and exploitation activities. Finding the right balance is such a
challenge because of the inherent antagonistic nature of the two sets of activities. The
transitioning process between exploration and exploitation is also fragile, as both
activities have different cultural, structural, and operational requirements.
Both large, incumbent firms and small, new venture firms face different sets of
challenges regarding this balance. In general, larger firms tend to be stronger at
advantage-seeking activities (i.e. enacting competitive advantages) and smaller firms’
strengths lie with opportunity-seeking activities. Overall, however, competence
exploitation tends to crowd out competence exploration within firms.
While more research is needed to understand what can be done to achieve the right
balance and to mitigate the challenges of strategic entrepreneurship, scholars have
identified a few methods to help firms through the challenges. For example, Ireland and
Webb (2007) have suggested reintroducing the middle manager as the ideal agent to
help operationalizing SE within organizations. Ketchen, et al. (2007), for example,
suggest that collaborative innovation can help combat some of the challenges of SE for
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both small and large firms. Future research should investigate the effectiveness of
these suggested strategies.
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THE FIVE DIMENSIONS OF STRATEGIC ENTREPRENEURSHIP
Although scholars have been discussing an intersection between strategic management
and entrepreneurship for decades, work on strategic entrepreneurship only began in
2001 (Hitt, et al., 2001; Ireland, et al., 2001). Creating value and wealth are at the heart
of both strategic management and entrepreneurship, although each domain seeks to
address this topic in different ways. Strategic entrepreneurship is based on the following
primary question: how do firms create and sustain a competitive advantage while
simultaneously identifying and exploiting new opportunities (Hitt, et al., 2011)? SE
theory posits that access to resources and capabilities is important in effectively
increasing performance, and especially value creation through growth (Ireland, et al.,
2003; Meuleman, et al., 2009).
As corporate entrepreneurship before it (Sharma & Chrisman, 1999), the exact nature
of strategic entrepreneurship remains unknown, even though several scholars have
already developed initial models of SE in an attempt to describe its exact nature
(Ireland, et al., 2003; Kyrgidou and Hughes, 2010; Luke, et al., 2011; Hitt, et al., 2011).
As it is based on a symbiotic relationship between strategic management and
entrepreneurship (Ireland, 2007), strategic entrepreneurship has been described as the
activities through which firms ‘‘simultaneously exploit today’s competitive advantages
while exploring for the innovations that will be the foundation for tomorrow’s competitive
advantages’’ (Ireland and Webb, 2007; Ireland and Webb, 2009). Other scholars have
also offered their own definitions for strategic entrepreneurship; therefore, an analysis
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and clarification of the definition and critical dimensions of SE is the first step needed in
order to establish the boundaries of the construct. As Schindehutte and Morris (2009)
put it, “what lies at the interface of strategy and entrepreneurship is not a simple fusion.”
Table 1 lists papers from the literature search results that either introduce or refine the
strategic entrepreneurship conceptual framework by providing their own definitions or
views on the nature of SE. Only unique definitions from the 47 papers in the literature
results were included, as repetitive definitions offer no additional value. From this list, a
discussion of the commonalities and differences of different definitions will be offered.
From this analysis, a list of five critical dimensions of strategic entrepreneurship has
been determined. This discussion is offered a major step in reaching a definitive
definition of strategic entrepreneurship, as well as determining the boundaries of the
field and construct. See Appendix B for a full list of definitions and descriptions found in
the literature search. Table 1 includes some selected definitions and descriptions for
this discussion.
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Table 1. Selected Definitions and Descriptions of Strategic Entrepreneurship AUTHOR JOURNAL DEFINITIONS CODING Ireland,
Hitt, and
Sirmon
(2003)
Journal of
Management
Strategic entrepreneurship (SE) involves
simultaneous opportunity-seeking and advantage-
seeking behaviors and results in superior firm
performance and long-term wealth creation. The
four distinctive dimensions of SE are: an
entrepreneurial mind- set, an entrepreneurial
culture and entrepreneurial leadership, the
strategic management of resources and applying
creativity and developing innovation.
1, 2, 3, 5
Ireland
and
Webb
(2007)
Business
Horizons
Strategic entrepreneurship is a value-creating
intersection between strategy and
entrepreneurship, balancing exploration and
exploitation of opportunity; balancing resources
between exploration and exploitation; and
maintaining continuous streams of innovation.
Thus, SE is concerned with actions the firm
intends to take to exploit the innovations that result
from its efforts to continuously explore for
innovation-based opportunities (i.e., new
organizational forms, new products, new
processes, etc.).
1, 2, 3, 4, 5
Strategic entrepreneurship (SE) is a term used to
capture firms’ efforts to simultaneously exploit
today’s competitive advantages while exploring for
the innovations that will be the foundation for
tomorrow’s competitive advantages.
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AUTHOR JOURNAL DEFINITIONS CODING Kyrgidou
and
Hughes
(2009)
European
Business
Review
SE can be defined as a process that facilitates firm
efforts to identify opportunities with the highest
potential to lead to value creation, through the
entrepreneurial component and then to exploit
them through measured strategic actions, based
on their resource base. The entrepreneurial aspect
contributes to the ability of identifying opportunities
and to the willingness of firms to pursue new
opportunities, whilst the strategic perspective
enables them to isolate and exploit those
opportunities most likely to lead to sustainable
competitive advantage and subsequent means by
which to form advantage.
1, 2, 3
Content Analysis and Coding Method
Of the 47 papers analyzed, 14 papers offered unique definitions and descriptions for
strategic entrepreneurship. These 14 definitions were tabulated, and a content analysis
for the results was conducted. An additional definition (for a total of 15) was added from
Hitt, et al. (2002)’s academic book on strategic entrepreneurship, as this book was an
early attempt to define the SE construct.
Each definition and description contains different elements or components. The interim
goal of this analysis was to assess commonalities between the definitions. These
different elements were manually noted. Certain elements were found to be common to
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several definitions. These elements were then coded, and through a manual, iterative
method, these coded elements were checked for against all 15 definitions. A list of five
elements was eventually chosen as the most common themes among the definitions.
This paper posits that these five elements are the five dimensions of strategic
entrepreneurship. Results of the analysis are elaborated on below.
Both Table 1 and Appendix B have a column showing the coding of the different
dimensions to demonstrate the commonalities between the definitions.
The Dimensions
As Agarwal, et al. (2010) put it, “strategic entrepreneurship, however defined, clearly
relates to initiatives grounded in the search for competitive advantage and leading to
new entry into products, markets, processes, or technological innovations by both
incumbents and new ventures.” Furthermore, SE clearly implies a successful balance of
opportunity and advantage seeking behaviors (Kyrgidou and Petridou, 2011) –
successful strategic entrepreneurship is discussed further in a later section. Hitt, et al.
(2001) initially defined strategic entrepreneurship as entrepreneurial action with a
strategic perspective, resulting from the integration of entrepreneurship and strategic
management knowledge. Ireland, et al. (2001) posit that the successful integration of
entrepreneurial and strategic actions improves a firm’s ability to grow and create wealth.
Hitt, et al. (2002) elaborates by positing that integrating entrepreneurial and strategic
actions is necessary for firms to create maximum wealth. Strategic entrepreneurship
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also addresses how firms should combine and synthesize opportunity-seeking and
advantage-seeking behaviors (Ketchen, et al., 2007; Ireland and Webb, 2007; Ireland
and Webb; 2009; Monsen and Boss, 2009).
Therefore, a few common themes emerge from definitions within the literature. These
five themes are required for any definition of SE to correctly describe the construct and
the nature of SE activity. Therefore, these themes form the basis for the five critical
dimensions of strategic entrepreneurship.
The five critical dimensions of strategic entrepreneurship are:
1. A balance between exploration (i.e. opportunity-seeking behaviors) and
exploitation (i.e. advantage-seeking behaviors), where the former emerges from
entrepreneurship and the latter emerges from strategy (coded as 1)
2. Wealth creation, value creation, or superior performance (coded as 2)
3. Balancing short-term success with a long-term perspective (coded as 3)
4. The continuous nature of strategically entrepreneurial activity and innovation
(coded as 4)
5. Emphasis on innovation (coded as 5)
The first dimension common among these definitions is the mention of opportunity-
seeking and advantage-seeking behaviors (or exploration and exploitation,
respectively). These components of the definition reflect strategic entrepreneurship’s
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inherent nature as being representative of the intersection between strategic
management (advantage-seeking behaviors or exploitation) and entrepreneurship
(opportunity-seeking behaviors or exploration). In fact, the balance between these two
almost antithetical behaviors is a major challenge of SE (Ireland and Webb, 2007;
Schindehutte and Morris, 2009; Kyrgidou and Petridou, 2011), as well as an important
topic of academic discussion among SE scholars. Nevertheless, these behaviors are
key components of SE. As Hitt, et al. (2002) put it, “entrepreneurial and strategic actions
are complementary, not interchangeable.” In other words, SE involves taking
entrepreneurial actions with a strategic management orientation, where both
perspectives are necessary for value creation; neither is sufficient on its own. In
essence, the defining characteristic of SE is “a sustained attempt to link opportunity-
seeking with advantage-seeking” (Foss and Lyngsie, 2011). This balance also implies
that there is a connection between SE and organizational flexibility, a concept similar to
organizational ambidexterity, where organizations must be adaptive to changes in the
environment (Raisch and Birkinshaw, 2008).
The second dimension deals with the notions of wealth creation, value creation, and
superior performance. As previously mentioned, strategic entrepreneurship aims to
broaden our understanding of how firms create wealth (Hitt, et al., 2001). The term
“value creation” encompasses the meaning of wealth creation, but also allows for
flexibility in terms of what the organization deems as a value. This opens the doors for
allowing SE to applied in organizational contexts (such as public enterprises, social
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enterprises, or not-for-profits) where wealth creation is not the primary value being
created by the organization. As Hitt, et al. (2011) suggest, effective strategic
entrepreneurship creates benefits that can accrue to multiple sets of stakeholders.
Therefore, in these cases, increased wealth creation is not the measure of superior
long-term performance; rather, measures such as social values take the place of wealth
when measuring firm performance. Thus, “value creation” is a much better phrase to
describe and capture the potential of SE across different kinds of organizations – which
is the original spirit of the construct (in that it can be applied to organizations large or
small, public or private, and even social organizations). In short, “value creation” is a
critical dimension of strategic entrepreneurship and is a term that includes wealth
creation and superior performance, but also other non-financial value that can be
created by a firm.
The third dimension is an emphasis on a long-term perspective on value creation, while
still managing to create short-term success. Kuratko and Audretsch (2009) submit that
SE “starts when the entrepreneur is less concerned with issues linked to short-term
survival and more with those related to long-term success.” Furthermore, strategic
entrepreneurship literature firmly suggests that a firm’s strategic intent must be to
continuously discover and exploit entrepreneurial opportunities, in order to continuously
create competitive advantages that lead to maximum value creation (Kuratko and
Audretsch, 2009; Kyrgidou and Hughes, 2010; Hitt, et al., 2011; Foss and Lyngsie,
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2011). This continuous creation of competitive advantages can only be achieved if the
firm maintains a long-term view on success.
The fourth dimension describes the continuous nature of SE activity (Hitt, et al., 2002;
Ireland, et al., 2003; Ketchen, et al., 2007; Kuratko and Audretsch, 2009; Hitt, et al.,
2011), in that maintaining the balance between opportunity-seeking and advantage-
seeking behaviors (Hitt, et al., 2001; Hitt, et al, 2002; Ireland, et al., 2003), as well as
the balance between maintaining short-term competitive advantages and exploring for
future competitive advantages (Webb, et al., 2010; Hitt, et al., 2011) is indeed a never-
ending process (at least for successful SE). This dimension points to a key difference
between the strategic entrepreneurship construct and corporate entrepreneurship
(elaborated on in the “Boundaries” section), in that SE is a continuous balance or
process, while corporate entrepreneurship implies a specific action has been taken at a
certain point in time (where the end product is always a new venture, product, or
process). Sharma and Chrisman (1999) describe CE as the “creation” of new
organizations or instigating renewal or innovation within an organization, but a
continuous balance or process is not central to the CE construct as it is part of SE.
Agarwal, et al. (2010), for example, describe SE as having a continuous opportunity
recognition process. Further, continuous innovation is positioned as the source of
sustained value creation over time (Hitt, et al., 2011). Thus, the continuous nature of SE
is the fourth critical dimension.
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The fifth and last dimension is the sheer importance of innovation for successful
strategic entrepreneurship. (In this analysis, “recombination of resources” and
“newness” were treated as synonyms for innovation; see Johannessen, et al., 2001).
Many strategic entrepreneurship scholars emphasize the importance of innovation for
value creation (Hitt, et al., 2001; Ireland, et al., 2003; Ireland and Webb, 2007; Ketchen,
et al., 2007; Kuratko and Audretsch, 2009; Kyrgidou and Hughes, 2010; Luke, et al.,
2011). Hitt, et al. (2001) suggest a strong interrelationship between innovation and
entrepreneurship; an entrepreneurial mindset (i.e. view to innovation) is required for
founding of new businesses and saving old ones. Ireland and Webb (2007) posit that
continuous innovation is “at the core” of what firms can achieve with SE (i.e. the
balance between exploration and exploitation activities). In other words, SE deals with
“actions the firm intends to take to exploit the innovations that result from its efforts to
continuously explore for innovation-based opportunities” (Ireland and Webb, 2007).
Luke, et al. (2011) further submit that innovation within SE may take various forms,
ranging from incremental to radical innovations. Innovation is central to opportunity
recognition (Boone, et al., 2013). If firms employ strong innovative programs to
implement entrepreneurial strategies, they can create wealth. In essence, innovation is
a central theme within the field and a critical dimension of the construct. In essence,
continuous innovation allows for long-term value creation as it allows for firms to remain
technologically ahead of their competitors by continuously building and maintaining
competitive advantages as different opportunities arise in the marketplace.
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As this discussion has shown, all these components are necessary for a full and
complete definition of SE that would differentiate the construct from other seemingly
similar constructs. Each component depends on the other components in order to
provide a complete picture of strategic entrepreneurship and its potential. Not a single
one of these components can be left out. For example, one cannot describe SE as
being the balance of exploration and exploitation activities without describing SE as a
continuous process that leads to long-term value creation. To leave out the latter two
components would be to omit the potential of SE (i.e. value creation now and in the long
term) and its very nature (i.e. a continuous process). But even this description is not
complete without the mention of continuous innovation, as innovation is a major way in
which firms can become strategically entrepreneurial (i.e. the “how”) in order to achieve
long-term value creation. In other words, innovation greases the wheels for SE and
helps firms find the right opportunities, exploit them, and enjoy the benefits of long-term
value creation.
Other Results
While many commonalities exist with most of these definitions, some notable
differences also exist in how authors choose to define or describe SE. Some unique
components within these definitions include:
1. Creativity (Ireland, et al., 2003)
2. Emphasis on resources and resource base (Ireland and Webb, 2007; Kyrgidou
and Hughes, 2010)
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3. Uncertainty (Ireland and Webb, 2009)
4. Description of SE within a broader economic context (Mathews, 2010)
The first idea comes straight out of the entrepreneurship research tradition. Creativity is
an entrepreneurial quality and is part of the third component of Ireland, et al. (2003)’s
early conceptual framework for SE. The concept of creativity was not echoed in other
scholars’ definitions for SE. While creativity is loosely mentioned in some of the extant
literature (Schindehutte and Morris, 2009; Hitt, et al., 2011; Kraus, et al., 2011), it has
never been a focal point of discussion within the field (as corroborated by the
conceptual analysis contained herein).
The second idea reinforces the fact that the SE construct finds its origins in the
resource-based view (RBV) of the firm (Ireland, et al., 2003; Kyrgidou and Hughes,
2010; Liu, et al., 2010), although RBV has fallen out of favor within the field in favor of
the concept of dynamic capabilities (which better reflects the nature of SE – elaborated
on in the conceptual analysis). For example, Schindehutte and Morris (2009) cite RBV
as having serious shortcomings in that it remains largely antithetical to a dynamic,
continuous conception of change over time and perhaps may not be well-suited to
describe SE as innovation (or newness) emerges from dynamic behavior. But the
strategic management of resources is one of the four components of SE that Ireland, et
al. (2003) mentioned in their seminal paper with the first conceptual construct of SE,
suggesting that “the purpose of bundling tangible and intangible resources is to
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organize them in ways that contribute to recognizing and exploiting entrepreneurial
opportunities and lead to the development of competitive advantages.” Nevertheless,
the emphasis on resources, while mentioned in other papers analyzed, has not been
put front in center in many of these definitions. Considering this component’s
underrepresentation in the results of the definitional content analysis, as well as
scholars favoring a more dynamic view of the firm in the context of SE, resources and a
resource base are not a critical dimension of SE.
The third idea emerges from the positioning of the SE construct as a tool to help
organizational decision makers to manage uncertainty in dynamic competitive
environments. Ireland and Webb (2009) describe SE in the context of uncertainty, a
concept with a history in both strategic management and entrepreneurship literature.
However, uncertainty is not a component reflected in other definitions of SE; thus, it is
not a critical dimension of the construct.
Lastly, unlike most other scholars who describe SE at the firm level of analysis,
Mathews (2010) chose to describe SE within a broader economic context and level of
analysis, whereby he credits SE for driving the economy in new directions. While he
presents an interesting application of SE in a different context than generally
researched, the definition he provides is somewhat limiting and inconsistent with the
general direction of the field. Therefore, the economic implications of SE are not a
critical dimension of the construct. However, researching SE within an economic or
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financial context may prove to be a fruitful research direction, as others have also
pursued this research stream (e.g. Audretsch, et al., 2009; Meuleman, et al., 2009).
Key Points
Over strategic entrepreneurship’s short history, scholars have come up with many
differing definitions and descriptions for the construct. Previous studies have not
attempted to reconcile these descriptions into a single definition. After a thorough
content analysis of every unique definition and description for SE, five key themes
emerge that are common to these definitions.
These key themes are posited to be essential to be included in any complete definition
for strategic entrepreneurship, as these themes are at the heart of the construct. As
such, this research posits that these form the basis of the five critical dimensions of
strategic entrepreneurship.
Therefore, the five critical dimensions of strategic entrepreneurship are:
1. A balance between exploration (i.e. opportunity-seeking behaviors) and
exploitation (i.e. advantage-seeking behaviors), where the former emerges from
entrepreneurship and the latter emerges from strategy.
2. Value creation
3. Balancing short-term success with a long-term perspective
4. The continuous nature of strategically entrepreneurial activity
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5. Emphasis on innovation
These five dimensions accurately and adequately describe the construct, as well as
differentiate this construct from other seemingly similar constructs. These critical
dimensions also provide a starting point for the discussion on the boundaries of
strategic entrepreneurship – both as a field and as a construct.
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WHERE DOES STRATEGIC ENTREPRENEURSHIP FIT?
As previously mentioned throughout this paper, strategic entrepreneurship is the value-
creating integration between strategic management and entrepreneurship research that
lies at the intersections between the two fields (Ireland, et al., 2001; Ireland, et al.,
2003; Ireland and Webb, 2007; Kraus, et al., 2011), unlike corporate entrepreneurship,
which falls firmly within the entrepreneurship domain (See Figure 1). Meyer (2009) (a
self-described contrarian) questioned the meaning of the words “intersection” and
“integration” with regards to defining strategic entrepreneurship; nevertheless, the
Meeks-Meyer Illustration of the Strategic Management and Entrepreneurship Historical
Intersections puts strategic entrepreneurship in the middle intersection of a Venn
diagram between entrepreneurship and strategic management. The illustration included
herein shall show a more process-oriented or dynamic illustration of SE, placing the
field in the middle of the two domains, with arrows demonstrating how SE both borrows
from and contributes to strategy and entrepreneurship.
However, beyond an integration of strategic management and entrepreneurial
perspectives, strategic entrepreneurship also represents a connection between the two
domains. In other words, the strategic entrepreneurship construct connects the
advantage-seeking behaviors of strategy with the opportunity-seeking behaviors of
entrepreneurship into a single model or framework that provides a holistic view of how
firms create value. The arrows in Figure 4 also represent this connection and the
continuous nature of the process of balancing both types of behaviors.
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Figure 4. Where Strategic Entrepreneurship Fits
Strategic entrepreneurship, however, should not be taken as an attempt to combine
entrepreneurship and strategic management into a single discipline, nor does SE imply
that entrepreneurship and strategic management are a single discipline that has been
subdivided (Ireland, et al., 2003). Both entrepreneurship and strategic management
research streams have provided unique and valuable contributions to management
studies (Ireland, et al., 2003). Although their foci differ (strategy is concerned with a
firm’s long-term development and entrepreneurship is concerned with actions taken to
create newness (Ireland, et al., 2003; Ireland and Webb, 2007)), both are inevitably
interrelated and are concerned with value creation (Ireland et al., 2003; Kraus and
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Kauranen, 2009). The two fields are inseparable, as the research results of the one
cannot fully be understood without the other, and in this way, are mutually supportive
(Meyer and Heppard, 2000; Ireland, et al., 2003; Kraus and Kauranen, 2009). In other
words, since the two disciplines are inseparable, it is difficult to understand one field’s
research findings without simultaneously studying the results reported in the other
(Meyer and Heppard, 2000) and combining the perspectives of both to better
understand how firms create wealth. Barney and Arikan (2001) suggested that there is
a close, although not fully specified relationship between theories of competitive
advantage and theories of creativity and entrepreneurship. They posit that
understanding the complementarities between entrepreneurship and strategic
management provides promising research questions on how firms create value.
In sum, strategic entrepreneurship allows for the knowledge from both fields to be
combined into a unique construct (and a unique field of study) with five critical
dimensions that recognizes the logical intersections and overlap between the two
domains. After all, strategic entrepreneurship theory combines the creative exploration
activities (originating from entrepreneurship) with the strategic discipline to exploit the
right opportunities. Nevertheless, the evident intersection between these two research
fields has been largely left uncovered so far (Kraus and Kauranen, 2009), even with the
development of SE as a new field of research and academic inquiry.
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Key Points
Strategic entrepreneurship (characterized by five critical dimensions) firmly lies at the
intersection of strategic management and entrepreneurship. The intersection between
the two fields is the concept of wealth or value creation; thus, the integration of both
entrepreneurial and strategic perspectives within the strategic entrepreneurship field
allows for a richer understanding of how firms create wealth or value. The strategic
entrepreneurship field serves as the connector between the strategy and
entrepreneurship domains.
While the placement of the field is certain in relation to these two domains, the strategic
entrepreneurship field is still very new, and intersections between the two domains have
been largely left uncovered.
Findings
Overall, scholars have firmly moved away from a linear conceptualization of SE
(Ireland, et al., 2003) and towards more complex conceptualizations that emphasize the
iterative (Kyrgidou and Hughes, 2010) and multilevel (Hitt, et al., 2011) nature of the
strategic entrepreneurship process. While these frameworks have not experienced
extensive empirical testing and analysis, it is clear that scholars are tending towards a
far richer explanation of SE and how firms create value. These richer frameworks also
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capture the notion that balancing exploration and exploitation activities (the first critical
dimension of SE) is an extremely complex matter and finding the right balance may
prove challenging (Ireland and Webb, 2007; Ireland and Webb, 2009; Schindehutte and
Morris, 2009; Kyrgidou and Hughes, 2010; Kyrgidou and Petridou, 2011) (see
“Challenges of Strategic Entrepreneurship” section). In essence, although Ireland, et al.
(2003) provides a very clear and concise initial model for SE, the conversation in the
field seems to be moving towards much more complex frameworks (i.e. Kyrgidou and
Hughes, 2010; Hitt, et al., 2011; Lumpkin, et al., 2011) that use the linear model as a
basis in order to capture the nuanced and complex nature of balancing opportunity-
seeking (exploration) and advantage-seeking (exploitation) activities. After all, this
balance is at the heart of SE and leads to the four other critical dimensions of the
construct.
Most importantly, one should note that Hitt, et al. (2011) and Lumpkin, et al. (2011) both
propose multilevel input-process-output conceptualizations of SE, reflecting the shift
within management studies as a whole towards multilevel frameworks (Hitt, et al.,
2007). In fact, Lumpkin, et al. (2011) cites Hitt, et al. (2011), basing their modelf of SE
for family firms off of Hitt, et al. (2011)’s general conceptualization. Again, more
complex, iterative conceptualizations seem to be more the fashion in the field now, in
contrast to the basic linear framework initially proposed by Ireland, et al. (2003).
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Kyrgidou and Hughes (2010) were the first the offer a richer model of SE in a framework
that incorporate iterative qualities as well as feedforward and feedback mechanisms.
They are also the first to propose the importance of dynamic capabilities for SE, shifting
the field’s focus away from its origins in the static RBV of the firm. This paper reinforces
many of the ideas presented by Ireland, et al. (2003) while adding some depth to the
description of SE by aiming to provide a more realistic model that better captures the
complex balance between entrepreneurial and strategic behaviors (the first critical
dimension of SE). They were also the first to suggest the “trigger” of SE within an
organization – vision from top management. They suggest two items would determine
the success of SE in a firm: the internal environment of the firm and the perception of
employees regarding how things are meant to be done. Their model also lends support
to other critical dimensions of SE by confirming that value creation is the ultimate
outcome in their model; describing how SE promotes the balance between short-term
and long-term successes through iterative processes; and suggesting that innovation is
the main driver of value creation.
At first glance, it seems like each paper discusses introduces a completely different list
of domains/components that they posit to be at the heart of strategic entrepreneurship.
While much of these models still need to undergo extensive empirical testing for a more
definite or complete list of domains, many of these conceptualizations in the extant
literature support the identification of the five dimensions of SE in this paper.
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Perhaps the dimension with the most overwhelming amount of support from the
different conceptualizations is for the fifth dimension: innovation. Innovation has been
described as a major component of SE in almost all the frameworks discussed, and has
been empirically tested by Luke, et al. (2011). Innovation (or continuous innovation or
newness) is perhaps the most interesting component discussed by scholars in the field,
as it seems to have gained widespread theoretical support as an essential component
of SE from different conceptualizations, as well as empirical support thus far in the
construct’s history. Innovation is the fifth critical dimension of SE and is the key to
implementing successful strategic entrepreneurship. In essence, scholars seem to
agree that innovation is a fundamental component of the strategic entrepreneurship
process and must be part of the description of the nature of SE. So a conceptualization,
model, or definition of SE is not complete without including this dimension of innovation,
either as a descriptor for how value creation is achieved with SE (in the case of a
definition), or as the driver of value creation in the SE process and its place within that
process (in the case of a model or conceptualization).
The first critical dimension of SE is also overwhelmingly supported by the
conceptualizations analyzed. Ireland and Webb (2007) and Schindehutte and Morris
(2009) both explicitly suggest that the balance between exploration and exploitation
activities is an essential component of SE, and Ireland and Webb (2009) suggest that
the correct balance between the two would help firms mitigate uncertainty. Work by
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Kyrgidou and Hughes (2010) and Hitt, et al. (2011), which incorporates iteration and
feedback/feedforward mechanisms in their models, supports this notion of a balance
and provides richer detail on how this balance is achieved and maintained. Therefore,
the balance between opportunity-seeking and advantage-seeking behaviors is definitely
a defining feature and a critical dimension of the construct. While this dimension of SE
is the most critical for implementing successful strategic entrepreneurship, it also
proves to be the most challenging for firms. Finding and maintaining the right balance
between the two antagonistic behaviors is no easy task, but one thing is certain – a
continuous balance (fourth dimension) between the two behaviors must be kept for firm
success, both in the short term and the long term (third dimension).
Value creation (sometimes referred to as wealth creation in some conceptualizations),
the second critical dimension, is also a part of all the conceptualizations analyzed as
the ultimate outcome or dependent variable of SE. HItt, et al. (2011)’s multi-level
conceptualization is also the first to describe the outcomes of SE at different levels of
analysis, supporting the notion that SE can create non-financial value in addition to
wealth, providing support for the idea that value creation (not just wealth creation) is a
critical dimension of the construct. Conceptually, the SE field has been quick to
converge on the notion that value or wealth creation is the ultimate dependent variable
of strategic entrepreneurship (Foss and Lyngsie, 2011). They submit, however, that
lower-level causal mechanisms underlying this relationship are not clearly defined and
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operationalized, presenting an opportunity for future research that could also help refine
the SE construct and provide a richer explanation of this dimension.
The conceptual framework overview also revealed other themes within the extant
literature. For example, the importance of organizational structure emerges from the
literature (Kyrgidou and Hughes, 2010; Hitt, et al., 2011; Kraus, et al., 2011) as the
“missing piece” of Ireland (2003)’s entrepreneurial mindset and culture as per Kyrgidou
and Hughes (2010). Organizational structure is posited as an internal firm requirement
for SE to occur and allows for the four original components of SE (an entrepreneurial
mindset, an entrepreneurial culture and entrepreneurial leadership, the strategic
management of resources and applying creativity, and developing innovation) to be
possible. Organizational structure is also slated to be the key to achieving an effective
balance between exploration and exploitation, where the structure must be capable of
supporting the needs for both activities. Kyrgidou and Hughes (2010) suggest that an
ambidextrous organizational structure would allow a firm to balance both exploration
and exploitation behaviors; however, further research has yet to be done on the ideal
organizational structure (and for different organization types, such as SMEs, new
ventures, or larger organizations) for SE to be as effective as possible (Hitt, et al.,
2011).
Other overlaps include the mention of growth in the domain lists of Ireland, et al (2001)
and Kyrgidou and Hughes (2010). Interestingly enough, the notion of growth as being a
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domain or essential component of SE has not been echoed in any of the other
conceptualizations. Additionally, Luke and Verreynne (2006) posit that growth is an
empirically-supported component of SE. Further research can and should be done to
support or refute this conclusion.
Additionally, other importance of opportunity and opportunity-recognition has been
reflected in a few frameworks (Schindehutte and Morris, 2009; Kyrgidou and Hughes,
2010) and has some empirical supported as a component of SE (Luke and Verreynne,
2006).
Overall, strategic entrepreneurship’s contribution to the broader domain of management
studies is the potential for a far richer explanation of how firms can create value – a
better explanation than either strategy or entrepreneurship can provide on their own.
Strategy primarily deals with how firms create financial value and enact competitive
advantages; entrepreneurship is wholly concerned with opportunity and opportunity-
recognition, as well as the creation of non-financial value. By combining knowledge and
perspectives from the two, scholars have been able to come up with conceptualizations
that start at the beginning of the opportunity-exploration process, connecting it to the
opportunity-exploitation process, and then ending with the ultimate outcome of value
(financial and non-financial) creation. Of course, this process is continuous and
iterative, with firms balancing both exploration and exploitation activities for maximum
firm performance. Therefore, strategic entrepreneurship’s boundaries are wide enough
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to describe the entire value creation process of firms, giving scholars the freedom to
import knowledge from both strategy and entrepreneurship in their research on this
topic.
Recommendations
The definitional content analysis contributes to the literature by identifying the five
critical dimensions of strategic entrepreneurship. The conceptual overview analysis
shows how descriptions and conceptualizations of SE have increased in complexity,
comprehensiveness, and detail over time, as scholars continuously build on previous
work to provide a fuller conceptual view of strategic entrepreneurship and what it
entails. Further, the conceptual overview analysis provides overwhelming support for
the critical dimensions identified by the definitional content analysis.
The strategic entrepreneurship field, while possessing great potential as an emerging
field, still has many research gaps. Therefore, two recommendations on how to
advance the strategic entrepreneurship field emerge:
1. The creation of a solid empirical foundation in the field that validates the claims
of the extant literature
o Future empirical studies must continue to validate the existence of SE, but
in multiple contexts (i.e. large firms, small firms, new ventures, not-for-
profits, private firms, public firms, social ventures…)
o This includes the creation of a valid and reliable accepted measure for SE
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2. The field must converge on a single, general framework for the strategic
entrepreneurship construct
o Currently, there are a few choices scholars can use in their research,
which can result in fragmented future research
o The field can only advance when a commonly-accepted framework for the
construct is reached
The five dimensions identified in this paper can help advance the field in terms of both
recommendations. First, part of the difficulty in measuring SE is that the dimensions
and critical elements of the construct have not been agreed upon within the field (as
evidenced by the conceptual framework overview). Thus, the identification of the five
critical dimensions of SE within this paper can assist in future empirical studies by
giving scholars five concrete dimensions to measure as a means of reaching an
accepted measure for SE. This will help the field progress empirically, as other
constructs (like EO) are insufficient proxies for SE. These five dimensions provide a
complete description of strategic entrepreneurship; therefore, measuring these
dimensions should provide the basis for a valid measure.
Secondly, the five dimensions identified (resulting from an integration of knowledge and
consensus in extant literature) can be used as a precursor for a convergence of
frameworks into a single, accepted framework for the SE construct. These five
dimensions already represent a convergence of definitions and descriptions; the next
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step would be using findings from the conceptual framework overview to create such a
model. A multilevel approach that integrates iteration, feedback loops, and feedforward
mechanisms is recommended. Multilevel outputs strongly correlates with the concept of
value creation (the second critical dimension). The addition of iteration, feedback
mechanisms, and feedforward mechanisms reflects the consensus among scholars that
these components reflect the complexity behind the balance of exploration and
exploitation (the first critical dimension), as well as the continuous nature of strategic
entrepreneurship (the fourth critical dimension) and the need to balance the short-term
with the long-term (the third critical dimension).
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FUTURE RESEARCH DIRECTIONS
SE is a relatively new field and a new construct, making it a highly viable research area
with many promising research opportunities. Current research directions involving SE
are highly fragmented (as evidenced by the previous section), with just 47 papers using
the term strategic entrepreneurship (or a slight variation of) in their title and/or abstract
(see: Appendix A). While strategic entrepreneurship is posited to apply to organizations
of different sizes and ages (Ireland, et al., 2001; Ireland, et al., 2003; Kyrgidou and
Hughes, 2010; Agarwal, et al., 2010; Hitt, et al., 2011), much of the current research is
focused on larger organizations, although some work on SMEs is evident. Additionally,
research addressing the core construct itself is popular, as many papers aim to refine
the original linear conceptualization for SE as proposed by Ireland, et. al. (2003).
Perhaps the absolute most glaring gap within the field is the lack of a strong empirical
foundation for many of the conceptualizations and frameworks for strategic
entrepreneurship, albeit having a strong theoretical basis for the construct. While the
theoretical conceptualizations for SE have been reworked on more than one occasion
(see: “Overview and Analysis of Conceptual Frameworks”), the empirical foundation for
many of these conceptualizations is lacking. Only two studies (Luke and Verreynne,
2006; Luke, et al., 2011) have aimed to provide an empirically supported and driven
model for the construct (the first, in fact, has provided an empirically-supported
confirmation of the existence of SE in an applied business setting). However, the
emphasis within the field overall remains theoretical, and specific limitations in the
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scope and resultant conclusions of the above empirical studies highlights the need to
further extend the work, and to generate a more thorough conceptualization for the field.
In other words, proposed frameworks and conceptualizations need to be rigorously
tested in empirical studies. Ideally, a mix of applied business settings would provide
more empirical support and depth as to the nature of the SE construct, as well as the
different forms it may take in different industries or with different firm sizes (as well as
differences between public and private enterprise contexts). Lastly, strategic
entrepreneurship is posited to lead to wealth or value creation (Ireland, et al., 2001; Hit,
et al., 2001, Ireland, et al., 2003; Ireland and Webb, 2007; Kyrgidou and Hughes, 2010;
Hitt, et al., 2011). While Luke, et al. (2011)’s findings support the notion that SE is a
viable pathway for value creation through increased financial returns, further research
needs to be done to provide more and stronger evidence that effective SE indeed leads
to increased value creation in firms. Overall, the SE construct rests on a number of
assumptions that have yet to be tested (Schindehutte and Morris, 2009). In essence,
theoretical conceptualizations for SE need to be verified empirically before the field can
advance any further.
Furthermore, a valid and reliable measure for strategic entrepreneurship has not yet
been developed, although EO, for example, ahs been used as a proxy for some
components of SE in a few studies (i.e. Monsen and Boss, 2009; Shirokova, et al.,
2013). However, operationalizing SE as an accepted measure is absolutely essential to
allow for the field to progress. In fact, the most major gap noted above (i.e. lack of a
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comprehensive empirical foundation for the field) can only be fully solved once a
commonly-accepted reliable and valid measure of SE has been developed. As noted in
the “Measures” section, Foss and Lyngsie (2011) suggest that scales for
entrepreneurial constructs (i.e. measures for EO) are not a very good proxy for strategic
entrepreneurship as they do not fully capture the nature of the construct. However, as
there is no accepted measure, this method seems to be dominant in the few empirical
studies that measure SE as part of the study. Other than the couple mentioned above
that use EO as proxy, Kyrgidou and Petridou (2011), for example, adapted a scale from
Brown, et al. (2001) that measures Stevenson and Jarillo’s (1990) entrepreneurial
management. Nevertheless, a valid and reliable measure for SE is a necessary next
step that will help advance the field greatly and assist in building a rich empirical
foundation for the construct.
One should also note that since the focus of SE is on superior performance, short-term
measures have been used for these studies. If a firm being both strategic and
entrepreneurial is a source of survival, the long-term sustainability of firm using SE is
the real time frame that should be studied. In other words, if SE leads to long-term
wealth or value creation, future research should reflect this. Therefore, short-term
performance may not necessarily be the right dependent variable for SE studies. To
validate the claims made by the construct, future research needs to use dependent
variables that are longer term in scope.
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Additionally, further work on strategic entrepreneurship in an SME context could provide
for some very interesting research and research questions. Research thus far is mainly
focused on larger organizations, although Ireland, et al. (2003) briefly mention how
resource constraints in smaller organizations would change the SE process quite
dramatically. The initial stages of venture creation and launch are characterized by
entrepreneurs having to do more with less and use what abilities and resources they
have at their disposal with a minimum of capital and a maximum of ingenuity and
improvisation (Kyrgidou and Hughes, 2010). Therefore, new ventures and SMEs
experience much more drastic resource constraints, unlike those as larger, more
established firms. These resource constraints present a different challenge for SMEs
than larger firms that wish to engage in effective SE (Ireland, et al., 2003; Ketchen, et
al., 2007; Kyrgidou and Hughes, 2010). Therefore, some further studies on SE in SMEs
and new ventures is needed in the field, considering the unique constraints on these
sorts of firms. Additionally, as SE is posited to apply to all firms of differing sizes and
ages (Hitt, et al., 2011), further studies on smaller firms (and different kinds of firms, in
general) are needed to fill the theoretical and empirical gap and support that notion.
These sorts of studies would also help empirically differentiate SE from corporate
entrepreneurship, as the latter is wholly focused on large, established firms. Lastly,
SME and new venture research could help determine the key differences between SE
in large firms and small firms. For example, some components of SE in different
theoretical conceptualizations may be more important or empirically-supported in large
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firms rather than small firms, and vice versa. Even research on the transition from
exploration to exploitation in a small firm context could be valuable.
Future research should also seek to clearly specify the characteristics of such an
organizational structure that allows firms to be capable of supporting the twin needs of
exploration and exploitation (Hitt, et al., 2011). Kyrgidou and Hughes (2010), for
example, suggest that an ambidextrous organizational structure would allow a firm to
balance both exploration and exploitation behaviors; however, further research has yet
to be done on the ideal organizational structure (and for different organization types,
such as SMEs, new ventures, or larger organizations) for SE to be as effective as
possible. Hitt, et al. (2011) also suggest that the type of organizational structure
required likely needs to have the attributes of an ambidextrous organization.
Ambidextrous structures would allow firms to simultaneously explore and exploit (the
key component of effective SE). The most effective balance between exploring and
exploiting may be partially dependent on the type of competitive environment in which
the firm exists, so future research should also examine the extent to which the
competitive environment moderates the relationship between the balance of exploitation
and exploration and a firm’s ability to create long-term value (Hitt, et al., 2011).
Additional research on the nature of the balance between exploration and exploitation
activities could also advance the field. While Ireland and Webb (2009) provided good
insight on what it takes to transition from the two activities and other scholars have
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provided some smaller but similar insights, further explanation and some empirical
support would be beneficial. While scholars have noted that different industries and firm
characteristics warrant different balances between the two activities (Ketchen, et al.,
2007; Ireland and Webb, 2009; Hitt, et al., 2011), little has been done on examples of
balances in different industries, or even how a firm can determine the correct balance
for itself. Case studies for this sort of research can help shed some additional light on
what successful SE looks like, what it entails, and other challenges of SE not yet
explored in the literature.
Scholars posit that SE is relevant across the full life cycle of organizations (Hitt, et al.,
2011), although historically, strategic management has largely been associated with
mature organizations and entrepreneurship largely associated with young ventures. As
such, SE implies a long-term view of value creation that results from simultaneously
engaging in opportunity- and advantage-seeking behaviors. Because of this, Hitt, et al.
(2011) have proposed a few research questions:
1. There is a need to conduct longitudinal research of new ventures as they mature
to understand how the nature of entrepreneurial activities varies over time. How
do organizations learn to manage resources in ways that appropriately and
simultaneously serve their need to exploit today’s advantages and explore for
new opportunities to exploit?
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2. Supporting this type of work is research to precisely detail and classify
advantage-seeking behaviors and opportunity-seeking behaviors used in
organizations.
3. To what degree do these behaviors overlap and to what extent are they
complementary?
4. What methods should firms use to master both types of behaviors?
5. Is it possible for individual business units and departments to excel at both
advantage- and opportunity-seeking behaviors within a single organization?
6. In addition, what actions are required for new ventures to gain and especially
sustain a competitive advantage?
Ireland, et al. (2003) posed two questions at the end of their seminal article that could
provide for promising research directions to advance the field; these two questions are:
1. How do entrepreneurial leaders within firms manage resources strategically to
create competitive advantage?
2. How are the firm’s resource bundles (i.e., capabilities) leveraged in the
identification and exploitation of new market opportunities?
Neither of these topics seem to have been addressed as of yet as per the literature
review included herein.
Schindehutte and Morris (2009) also suggest five promising research areas or topics
within SE that would help advance the field; these areas are:
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1. The antagonistic nature of exploration and exploitation
2. The ambiguous nature of entrepreneurship and its opportunities
3. The transformative nature of innovation
4. The multifaceted nature of multilevel dynamics
5. The process nature of change
Schindehutte and Morris (2009) also identify five areas wherein more development
might enhance the current model of strategic entrepreneurship (SE):
1. Exploration–exploitation,
2. Opportunity,
3. Newness,
4. Micro– macro interaction,
5. Dynamics.
Klein, et al. (2013) also suggest that public organizations are relatively understudied in
the strategic entrepreneurship literature (as evidenced by the literature review).
Strategic entrepreneurship literature has given little attention to the boundaries, internal
organization, growth, and performance of public organizations. Therefore, further
development in the application of strategic entrepreneurship to public organizations
may be a promising research direction that could help add some depth to the field.
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Furthermore, Lumpkin, et al. (2011) suggest that although considerable progress has
been made in research on family businesses, major research avenues remain to be
explored on the interface between strategic entrepreneurship and family business.
Further research on familiness within firms and as a resource for family-owned firms
(Kansikas, et al., 2012) could also prove to be fruitful. Further research to quantify the
findings of this study is needed. Statistical analyses of the influence of familiness on
entrepreneurial leadership and the factors which moderate this relationship would
increase our understanding of the characteristics of family firms. Studies collecting
rigorous statistical data on family firms and entrepreneurial leadership could increase
knowledge on a relatively under-researched topic.
Interestingly enough, Kraus et al. (2011) suggest that SE can be an instrument in
transforming administration-oriented employees into intrapreneurs who exercise
entrepreneurial behavior within their respective organizations (Hitt et al., 2002).
Perhaps further research on the intersections between intrapreneurship and SE could
provide some insight on SE from an individual level of analysis.
Additionally, one paper reviewed (Short, et al., 2013) applied strategic entrepreneurship
concepts to social entrepreneurship. As previously mentioned, the preferred term “value
creation” in the context of SE (see definitional analysis in previous section) is more of
an umbrella term that does not only imply improved financial firm performance, but
could also mean other types of value can be created through strategic entrepreneurship
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(social or otherwise). The outputs in Hitt, et al. (2011)’s multi-level conceptualization
highlights that the benefits of SE can occur on more than one level, supporting this
notion. Therefore, an extremely valuable research stream for the field would be studying
all the value (other than financial) that is created by SE, an how SE can increase social
value and other non-financial value, as well as the key differences in the type of
balance between exploring and exploiting needed to create non-financial value.
Furthermore, research within the context of nonprofits/not-for-profits (organizations
where profit performance is not an indicator of success at all) could also prove to be
fascinating as well as insightful. Again, many scholars in the field posit that SE can
apply to all kinds of firms; therefore, this notion needs to be put to the test in future
studies so it is empirically-supported. Additionally, Hitt, et al. (2011)’s multilevel
framework provides support for the notion that SE can create non-financial value at
levels of analysis other than the firm (i.e. societal). Not-for-profits would be one type of
organization that when studied, could provide empirical support for this notion, as well
as advance the field in otherwise (such as further contributing to the understanding of
how SE can assist in non-financial value creation in a limited resource context where
financial performance is not a priority or primary indicator of success).
A related research direction would be work focusing on societal-level effects of strategic
entrepreneurship and the creation of value for society at large. Further, societal-level
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effects could be studied in bottom-of-the-market (BOP) markets in developing
economies.
Additionally, none of the extant literature focuses on strategic entrepreneurship for firms
that operate in heavily regulated industries, such as energy and oil and gas industries.
These industries pose unique business problems for firms in the form of severe
regulatory constraints and exploring strategic entrepreneurship in these contexts could
be fruitful and help advance the field by proving the applicability of the SE construct in
yet a different context.
SE emphasizes innovation as a vehicle for competitive advantage and effectively
managing that innovation as a means of sustaining value creation and organizational
success (Ireland, et al., 2003; Ketchen, et al., 2007; Kyrgidou and Hughes, 2010;
Ireland and Webb, 2007; Ireland and Webb, 2009; HItt, et al., 2011). In high technology
industries that have new emerging technologies and markets all the time (and are
characterized by highly dynamic and uncertain environments), SE is highly relevant.
Therefore, further empirical work in these environments could provide some additional
insight on the nature of strategic entrepreneurship. These studies could also prove to be
highly prescriptive in terms of the specific exploring or exploiting actions firms can take
to stay competitive.
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Lastly (and perhaps, most importantly), although Luke, et al. (2011)’s findings
somewhat support the notion that strategic entrepreneurship is associated with value
creation (in this case, financial value), their findings are neither exclusive or conclusive.
More empirical support for the notion that strategic entrepreneurship drives value or
wealth creation (through studies similar to Zahra (1991) and Zahra and Covin (1995) for
corporate entrepreneurship) is needed so that the field may continue to make the claim
that SE drives value creation. Right now, this claim is mainly supported through theory,
greatly weakening the impact of the research within the field.
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DISCUSSION AND IMPLICATIONS
As Hitt, et al. (2011) so aptly put it, “the need to understand how new ventures can
achieve and sustain success by exploiting one or more competitive advantages and
how large established firms can become more entrepreneurial provides incentives to
theoretically explain and empirically explore the SE construct.” Ireland, et al. (2003) also
noted that the implications of the SE construct are important for scholars and managers
alike for a better understanding of how firms identify and exploit entrepreneurial
opportunities, establish and sustain competitive advantages and create wealth.
Implications for Scholars
Strategic entrepreneurship is a dynamic new field with many research opportunities, as
previously listed. With the establishment of the Strategic Entrepreneurship Journal
(SEJ) in 2007, it is becoming clear that SE (both as a field and a construct) has become
increasingly important in management studies (and particularly for those in the fields of
entrepreneurship or strategic management). Consequently, the strategic
entrepreneurship field should not be ignored – not by entrepreneurship scholars, nor by
strategic management scholars.
The work contained herein identifies the five critical dimensions of strategic
entrepreneurship as a consensual definition for strategic entrepreneurship that
represents the convergence of extant literature through a comprehensive content
analysis. The creation of a consensual definition is very important, as not only does
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such a definition solidify the boundaries of strategic entrepreneurship, but the greatest
benefit of having this definition is that it allows strategic entrepreneurship scholars to
frame the debate about what they want the field to become, or how they want it to
change (as suggested by Nag, et al., 2007 in the case of strategic management). This
benefit is extremely important for this new field, as there it’ll allow for the debate over
“what is strategic entrepreneurship” to progress to a debate over “what are the
boundaries of strategic entrepreneurship.” While boundaries have been noted here, as
previously mentioned, the ten key topic areas highlighted by Schendel and Hitt (2007)
and accepted by the SEJ are quite general in scope. Therefore, these five critical
dimensions can progress the conversation among scholars (and perhaps the journal,
itself) to hammer down much more specific topic boundaries, steering future research in
the right direction.
Furthermore, the analysis of the many conceptual frameworks for strategic
entrepreneurship that have emerged can provide the basis for the convergence of these
frameworks into a single conceptual framework for the construct. As Shane and
Venkataraman (2000) have noted, for a field of social science to be useful, it must have
a corresponding conceptual framework that explains and predicts a set of empirical
phenomena not explained or predicted by conceptual frameworks already in existence
in other fields. But the analysis included herein has highlighted that research on
different frameworks is highly fragmented, with each scholar taking a different
approach. The only exception is the emergence of two multilevel frameworks (Hitt, et
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al., 2011; Lumpkin, et al., 2011) that reflects the increasing popularity of multilevel
frameworks within management studies (Hitt, et al., 2007). Therefore, perhaps future
work on the convergence of these frameworks should take a multilevel approach,
seeing as such an approach would address strategic entrepreneurship in a much
broader context (enabling future research at different levels of analysis other than the
firm).
The work contained herein has also successfully confirmed where strategic
entrepreneurship “fits” in relation to strategy and entrepreneurship – right at the
intersection, representing a connection between the two fields – as well as
differentiating SE from other seemingly similar constructs (such as corporate
entrepreneurship and entrepreneurial orientation). This settles the debate (see Meyer,
2009) over whether strategic entrepreneurship is a redundant construct (Van Rensburg,
2013) or almost the same as corporate entrepreneurship. Therefore, scholars should
now be able to refer to each construct appropriately, as well as recognize that strategic
entrepreneurship has unique elements to it and should not be used as a synonym for
constructs such as corporate entrepreneurship or corporate venturing.
Therefore, the implications for strategic entrepreneurship scholars are clear: while
strategic entrepreneurship has been established a unique field and a unique construct
(as supported by this analysis), a strong empirical foundation needs to be established
before the entire field can continue to advance. In essence, a robust framework for
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strategic entrepreneurship needs to be tested in a variety of practical settings to
validate many to the claims made by the extant literature as to the nature of strategic
entrepreneurship. Claims that have yet to be empirically validated include the types of
organizations to which the construct applies (i.e. all organizations) and the outcomes of
strategic entrepreneurship (i.e. value creation). This can only be made possible with an
accepted measure of strategic entrepreneurship. The five dimensions identified in this
thesis serve as five measurable variables that researchers could use as a basis for
reaching an accepted measure – especially since these dimensions are an exhaustive
description of the construct. For example, the dimension of innovation is a measurable
construct that has some accepted proxies, such as the number of patents filed.
Other implications of this work exist for entrepreneurship and strategic management
scholars. For one, it is clear that strategic entrepreneurship is not a field that should be
ignored; in fact, the creation of this unique field is an answer to the call by many
scholars for integration of entrepreneurial and strategic knowledge (i.e. Meyer and
Heppard, 2000).
For example, strategic management scholars focus on studying the major intended and
emergent initiatives taken by general managers on behalf of owners, involving
utilization of resources, to enhance the performance of firms in their external
environments (Nag, et al., 2007). The intent of strategic management, therefore, is to
develop and successfully exploit competitive advantages. Strategic entrepreneurship
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takes this concept and further suggests that enhanced performance can result from the
balance between the advantage-seeking behaviors of strategy with the opportunity-
seeking behaviors of entrepreneurship. The concept of a firm also using opportunity-
seeking behaviors answers questions in strategic management about how a firm can
maintain a competitive advantage for superior performance. In essence, strategic
entrepreneurship can provide a different angle for scholars to explore in terms of how
firms can maintain or create competitive advantages and increase performance by
allowing scholars to apply concepts about entrepreneurial newness, innovation, and
opportunity-recognition to the concept of the creation and enactment of competitive
advantages.
In contrast, entrepreneurship scholars often focus on the discovery and the exploitation
of entrepreneurial opportunities – strategic entrepreneurship provides a strategy
perspective on how these opportunities can be harnessed into an effective competitive
advantage. In other words, entrepreneurship is concerned with recognizing
opportunities that, when effectively exploited, lead to value creation (Hitt, et al., 2011).
Consequently, SE gives scholars a construct that allows entrepreneurship scholars to
explore how these opportunities can be exploited (purview of strategy) – not just how
opportunities are identified. Additionally, strategic entrepreneurship also provides an
avenue for entrepreneurship scholars to shift their focus away from the individual (i.e.
entrepreneur) level of analysis to the firm level of analysis. While corporate
entrepreneurship may provide a similar avenue, the SE field allows researchers to
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explore a broader set of entrepreneurial initiatives, as well as applying these concepts
to a larger set of organizational types (i.e. large or small, new or incumbent, private or
public).
The strategic entrepreneurship field, in essence, seeks to combine both stages of the
value creation process (opportunity identification from entrepreneurship and the
exploitation of opportunity from strategy) into one cohesive story, thus widening the
boundaries for scholars in both disciplines. Since opportunity-identification leads to
opportunity-exploitation, the SE field allows scholars to widen their nets in their research
for a better understanding of how firms create wealth and at all stages of that process.
Implications for Managers
The SE construct is centered on long-term superior firm performance and wealth (or
value) creation. Managers are charged to provide maximum profits and returns for their
shareholders through increased firm performance. Therefore, strategic
entrepreneurship has practical implications for managers, in that it can be a tool with
which managers can help firms achieve long-term value creation or increase firm
performance. In fact, many scholars posit that firm’s long-term success depends on
effective strategic entrepreneurship, where a firm is able to simultaneously exploiting
current domains while exploring for new domains by striking the right balance between
strategic and entrepreneurial behaviors (Ireland and Webb, 2007; Ketchen, et al., 2007;
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Ireland and Webb, 2009; Kyrgidou and Hughes, 2010; Webb, et al., 2010; Hitt, et al.,
2011).
Although the jury is still out on whether SE indeed leads to increased value creation in a
practical setting (as opposed to other tools such as corporate entrepreneurship, or even
just strategic management by itself) as not much empirical data exists validating this
claim, if new empirical data emerges supporting the link between SE and value
creation, managers will need to be trained on how to implement effective SE within their
organizations.
Of course, effective strategic entrepreneurship is no easy task. As the “Challenges of
Strategic Entrepreneurship” section demonstrates, striking the right balance between
opportunity-seeking and advantage-seeking behaviors is no simple feat. The search for
the correct balance is complicated by the fact that no single balance “formula” exists
that will work for every type of organization in every industry. Indeed, the ideal balance
depends on the external environment in which a firm operates, as well as the internal
characteristics of the firm. Therefore, flexibility in the organization and organizational
structure (as recommended by Kyrgidou and Hughes (2010) and empirically supported
by Luke and Verreynne (2006)), is absolutely crucial for allowing a firm to find the right
balance. If managers understand the importance of flexibility when trying to find the
right balance of exploration and exploitation activities and for implementing effective SE
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in general, then a firm may have a higher chance of being strategically entrepreneurial
(and in theory, enjoy higher returns for shareholders).
This research has other implications for managers. For example, the potential of
strategic entrepreneurship to be used for value creation (i.e. value other than financial
value) means that managers of social ventures could apply the same SE concepts for
maximum value creation. In essence, strategic entrepreneurship may be an effective
tool to maximize returns for stakeholders (not just shareholders) – financial or
otherwise.
Short Example: Apple Incorporated
To provide some context to managers on the potential of strategic entrepreneurship, the
following is a practical example of a well-known firm, Apple Incorporated, which
currently exhibits (and has exhibited in the past) the five dimensions of strategic
entrepreneurship as defined herein. This example will walk through some of Apple’s
history and serves to demonstrate what SE might look like in real life and how it could
lead to sustained value creation over time. It is important that high technology firms like
Apple operate in highly dynamic and uncertain competitive environments - this
example demonstrates how SE behaviors has helped Apple achieve sustained long-
term performance gains.
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Apple has enjoyed unsurpassed amounts of success since the launch of the iPod and
iTunes in 2001, which are credited with the popularization of digital music storage and
accelerating shifts within the music industry in terms of distribution. Since then, the
Apple brand has been synonymous with innovation and clean, minimalist, and
aesthetically pleasing product design (courtesy of design genius Jonathan Ive). Apple
did not stop at the iPod – they subsequently released products such as the iPad tablet
computer, the iPhone smartphone, new and improved versions of their MacBook
laptops and iMac desktop computers, and more recently, the brand-new Apple Watch
smartwatch.
Apple has notably passed up on a blue-ocean strategy (see Kim and Mauborgne, 2005)
in many product markets in favor of a creating a second-mover advantage – a strategy
that has gained the company a cult following and made Apple a household name. The
firm continuously (fourth dimension) engages in both opportunity-seeking and
advantage-seeking activities (first dimension). For example, Apple continuously
leverages their brand (i.e. their competitive advantage) to enter new product markets
(opportunity-seeking), successfully wresting power away from previous market giants
(advantage-seeking) such as Blackberry (in the case of the iPhone) and Sony (in the
case of the iPod and portable media players) by converting customers over to the Apple
line of products.
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Apple has even created market demand for products that customers did not even know
they wanted (a type of opportunity-exploration activity – opportunity development; see
Archdichvili, et al., 2003), like in the case of iPad and the creation of the tablet computer
market, leaving competitors such as Microsoft and Samsung scrambling.
Apple continuously puts innovation (the fifth dimension) at the forefront of all their new
product initiatives, allowing them to fully exploit current markets with newer versions of
the same products (iPhones 1 through 6, for example) and exploring for new markets
with different product versions (for example, the release of the iPad mini). Overall,
Apple has been systematically exploiting current markets by releasing updated versions
of the same product (and still selling older versions for interested customers; e.g.
iPhones) while exploring for new markets by introducing product versions that aim at
different customer bases, as well as brand new product lines in completely different
product markets. In essence, while Apple has enjoyed a single sustained competitive
advantage (namely, it’s brand), it has not been putting all its eggs in one basket in
terms of product offering, and continuously updates its product lines. Therefore, Apple
has enjoyed competitive success in multiple markets by always searching and
exploiting new opportunities for value creation.
Ultimately, Apple has been able to create many short-term successes in different
markets over time that have led to an overall long-term success pattern (the third
dimension) for over a decade, ultimately resulting in superior performance and
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sustained value creation (the second dimension). The firm has essentially succeeded in
balancing both exploration and exploitation behaviors to successfully navigate the
highly competitive and fickle competitive landscape in which they operate.
Concluding Thoughts
As a final note, with an increasingly global economy and many firms (especially high
technology firms) competing in extremely dynamic environments, research on novel
ways to maintain a competitive advantage in the marketplace is extremely important.
The importance of innovation in the global economy, the significance of entrepreneurial
activity for economic growth, and the critical value of strategic management for firm
survival increase SE’s importance (Hitt, et al., 2011). Strategic entrepreneurship
research teaches us that the best way to maintain a competitive advantage is for firms
to gain and enact a succession of competitive advantages. Firms can do this by
maintaining an effective balance between entrepreneurial opportunity-seeking activities
and strategic advantage-seeking activities. Even though future research on different
optimal balances between the two sets of behaviors is needed, the concept of
maintaining such a balance is still relevant and important for today’s managers.
Managers are responsible for implementing these activities with the ultimate goal being
successfully exploiting a current competitive advantage while also looking for potential
future opportunities for new competitive advantages for when changes in the
competitive environment occur. Continuous innovation, encouraged and administered
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by managers in different functional areas, can be the key to achieving a successful
balance.
Ultimately, strategic entrepreneurship literature draws upon an array of knowledge
stocks and perspectives from multiple disciplines (most notably, entrepreneurship and
strategy) to create a more comprehensive, complete, and accurate picture of how firms
create value. Since managers are responsible for maximizing value for their
shareholders and stakeholders, strategic entrepreneurship is a very timely and relevant
field that promises important future contributions.
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207
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APPENDIX A: LIST OF STRATEGIC ENTREPRENEURSHIP ARTICLES FROM
LITERATURE SEARCH PUBLISHED FROM 2001 TO 2014
Agarwal, R., Audretsch, D., & Sarkar, M. B. (2007). The process of creative
construction: knowledge spillovers, entrepreneurship, and economic growth.
Strategic Entrepreneurship Journal, 1(3‐4), 263-286.
Agarwal, R, Audretsch, D., & Sarkar, M. (2010). Knowledge spillovers and strategic
entrepreneurship. Strategic Entrepreneurship Journal, 4(4), 271-283.
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strategic entrepreneurship. Entrepreneurship Theory and Practice, 33(1), 149-
166.
Bjørnskov, C., & Foss, N. (2013). How strategic entrepreneurship and the institutional
context drive economic growth. Strategic Entrepreneurship Journal, 7(1), 50-69.
Boone, C., Wezel, F. C., & van Witteloostuijn, A. (2013). Joining the pack or going solo?
A dynamic theory of new firm positioning. Journal of Business Venturing, 28(4),
511-527.
211
Burgelman, R. A., & Grove, A. S. (2007). Cross‐boundary disruptors: powerful
interindustry entrepreneurial change agents. Strategic Entrepreneurship Journal,
1(3‐4), 315-327.
Cariola, M., & Rolfo, S. (2004). Evolution in the rationales of foresight in Europe.
Futures, 36(10), 1063-1075.
Cunha, M. P. (2007). Entrepreneurship as decision making: rational, intuitive and
improvisational approaches. Journal of Enterprising Culture, 15(01), 1-20.
Dew, N., Sarasathy, S., Read, S., & Wiltbank, R. (2009). Affordable loss: Behavioral
economic aspects of the plunge decision. Strategic Entrepreneurship Journal,
3(2), 105-126.
Dushnitsky, G., & Lavie, D. (2010). How alliance formation shapes corporate venture
capital investment in the software industry: a resource‐based perspective.
Strategic Entrepreneurship Journal, 4(1), 22-48.
Hitt, M. A., Ireland, R. D., Camp, S. M., & Sexton, D. L. (2001). Strategic
entrepreneurship: entrepreneurial strategies for wealth creation. Strategic
management journal, 22(6‐7), 479-491.
Hitt, M. A., Ireland, R. D., Sirmon, D. G., & Trahms, C. A. (2011). Strategic
212
entrepreneurship: creating value for individuals, organizations, and society. The
Academy of Management Perspectives, 25(2), 57-75.
Ireland, R. D., Hitt, M. A., & Sirmon, D. G. (2003). A model of strategic entrepreneurship:
The construct and its dimensions. Journal of management, 29(6), 963-989.
Ireland, R.D., & Webb, J. W. (2007). Strategic entrepreneurship: Creating competitive
advantage through streams of innovation. Business Horizons, 50(1), 49-59.
Ireland, R. D., & Webb, J. W. (2009). Crossing the great divide of strategic
entrepreneurship: Transitioning between exploration and exploitation. Business
Horizons, 52(5), 469-479.
Kansikas, J., Laakkonen, A., Sarpo, V., & Kontinen, T. (2012). Entrepreneurial
leadership and familiness as resources for strategic entrepreneurship.
International Journal of Entrepreneurial Behaviour & Research, 18(2), 141-158.
Ketchen, D. J. (2007), Change. Strategic Entrepreneurship Journal, 1: 291–293.
doi: 10.1002/sej.23
Ketchen, D. J., Ireland, R. D., & Snow, C. C. (2007). Strategic entrepreneurship,
collaborative innovation, and wealth creation. Strategic Entrepreneurship Journal,
213
1(3‐4), 371-385.
Klein, P. G., Mahoney, J. T., McGahan, A. M., & Pitelis, C. N. (2013). Capabilities and
strategic entrepreneurship in public organizations. Strategic Entrepreneurship
Journal, 7(1), 70-91.
Kotha, S. (2010). Spillovers, spill‐ins, and strategic entrepreneurship: America's first
commercial jet airplane and Boeing's ascendancy in commercial aviation.
Strategic Entrepreneurship Journal, 4(4), 284-306.
Kuratko, D. F., & Audretsch, D. B. (2009). Strategic entrepreneurship: exploring different
perspectives of an emerging concept. Entrepreneurship Theory and Practice,
33(1), 1-17.
Kyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: origins, core elements
and research directions. European Business Review, 22(1), 43-63.
Kyrgidou, L. P., & Petridou, E. (2011). The effect of competence exploration and
competence exploitation on strategic entrepreneurship. Technology Analysis &
Strategic Management, 23(6), 697-713.
Levie, J., & Autio, E. (2011). Regulatory burden, rule of law, and entry of strategic
214
entrepreneurs: An international panel study. Journal of Management Studies,
48(6), 1392-1419.
Liu, X., Wright, M., Filatotchev, I., Dai, O., & Lu, J. (2010). Human mobility and
international knowledge spillovers: evidence from high‐tech small and medium
enterprises in an emerging market. Strategic Entrepreneurship Journal, 4(4),
340-355.
Luke, B., Kearins, K., & Verreynne, M. L. (2011). Developing a conceptual framework of
strategic entrepreneurship. International Journal of Entrepreneurial Behaviour &
Research, 17(3), 314-337.
Luke, B., & Verreynne, M. L. (2006). Exploring strategic entrepreneurship in the public
sector. Qualitative Research in Accounting & Management, 3(1), 4-26.
Lumpkin, G. T., Steier, L., & Wright, M. (2011). Strategic entrepreneurship in family
business. Strategic Entrepreneurship Journal, 5(4), 285-306.
Mathews, J. A. (2010). Lachmannian insights into strategic entrepreneurship:
Resources, activities and routines in a disequilibrium world. Organization Studies,
31(2), 219-244.
215
Meuleman, M., Amess, K., Wright, M., & Scholes, L. (2009). Agency, Strategic
Entrepreneurship, and the Performance of Private Equity‐Backed Buyouts.
Entrepreneurship Theory and Practice, 33(1), 213-239.
Monsen, E., & Wayne Boss, R. (2009). The impact of strategic entrepreneurship inside
the organization: Examining job stress and employee retention. Entrepreneurship
Theory and Practice, 33(1), 71-104.
Obeng, B. A., Robson, P., & Haugh, H. (2012). Strategic entrepreneurship and small
firm growth in Ghana. International Small Business Journal.
Patzelt, H., & Shepherd, D. A. (2009). Strategic entrepreneurship at universities:
academic entrepreneurs' assessment of policy programs. Entrepreneurship
Theory and practice, 33(1), 319-340.
Pisano, V., Ireland, R. D., Hitt, M. A., & Webb, J. W. (2007). International
entrepreneurship in emerging economies: the role of social capital, knowledge
development and entrepreneurial actions. International Journal of Technology
Management, 38(1), 11-28.
Rosenkopf, L., & Schilling, M. A. (2007). Comparing alliance network structure across
industries: observations and explanations. Strategic Entrepreneurship Journal,
216
1(3‐4), 191-209.
Schindehutte, M., & Morris, M. H. (2009). Advancing strategic entrepreneurship
research: the role of complexity science in shifting the paradigm.
Entrepreneurship Theory and Practice, 33(1), 241-276.
Schulze, W. (2007). Networks and strategic entrepreneurship: comments on comparing
alliance network structure across industries: observations and explanations and
strategic networks and entrepreneurial ventures. Strategic Entrepreneurship
Journal, 1(3‐4), 229-231.
Shirokova, G., Vega, G., & Sokolova, L. (2013). Performance of Russian SMEs:
exploration, exploitation and strategic entrepreneurship. critical perspectives on
international business, 9(1/2), 173-203.
Short, J. C., Moss, T. W., & Lumpkin, G. T. (2009). Research in social entrepreneurship:
Past contributions and future opportunities. Strategic entrepreneurship journal,
3(2), 161-194.
Siegel, D. S. (2007). Comments on Entrepreneurial pursuits of self and collective
interests and Strategic entrepreneurship, collaborative innovation, and wealth
creation. Strategic Entrepreneurship Journal, 1(3‐4), 387-389.
217
Sirén, C. A., Kohtamäki, M., & Kuckertz, A. (2012). Exploration and exploitation
strategies, profit performance, and the mediating role of strategic learning:
Escaping the exploitation trap. Strategic Entrepreneurship Journal, 6(1), 18-41.
Skuras, D., Meccheri, N., Moreira, M. B., Rosell, J., & Stathopoulou, S. (2005).
Entrepreneurial human capital accumulation and the growth of rural businesses:
a four-country survey in mountainous and lagging areas of the European union.
Journal of Rural Studies, 21(1), 67-79.
Steffens, P., Davidsson, P., & Fitzsimmons, J. (2009). Performance Configurations Over
Time: Implications for Growth‐and Profit‐Oriented Strategies. Entrepreneurship
Theory and Practice, 33(1), 125-148.
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APPENDIX B: LIST OF DEFINITIONS AND DESCRIPTIONS OF STRATEGIC
ENTREPRENEURSHIP USED IN ACADEMIC PAPERS FROM 2001 TO 2014
The Five Dimensions of Strategic Entrepreneurship Coding Key:
1 – Balance between opportunity-seeking (exploration) and advantage-seeking
(exploitation) behaviors
2 – Value creation
3 – Balancing short-term success with a long-term perspective
4 – The continuous nature of the strategic entrepreneurship process
5 – Innovation
Definitions and Descriptions (in ascending chronological order):
1. Hitt, Ireland, Camp, and Sexton (2001) – Strategic Management Journal
o Strategic entrepreneurship is entrepreneurial action with a strategic
perspective. In short, strategic entrepreneurship is the integration of
entrepreneurial (i.e., opportunity- seeking behavior) and strategic (i.e.,
advantage- seeking) perspectives in developing and taking actions
designed to create wealth.
o CODING: 1,2
2. Hitt, Ireland, Camp, and Sexton (2002) - Strategic Entrepreneurship: Creating a
New Mindset (Blackwell Publishing)
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o Strategic entrepreneurship is the integration of entrepreneurial (i.e.,
opportunity- seeking actions) and strategic (i.e., advantage-seeking
actions) perspectives to design and implement entrepreneurial strategies
that create wealth. Thus, strategic entrepreneurship is entrepreneurial
action that is taken with a strategic perspective.
o Thus, strategic entrepreneurship facilitates firms’ efforts to identify the best
opportunities (matched to their resources and with the highest potential
returns) and then to exploit them with the discipline of a strategic business
plan. The goal of strategic entrepreneurship is to continuously create
competitive advantages that lead to maximum wealth creation.
o CODING: 1, 2, 4
3. Ireland, Hitt, and Sirmon (2003) – Journal of Management
o Strategic entrepreneurship (SE) involves simultaneous opportunity-
seeking and advantage- seeking behaviors and results in superior firm
performance and long-term wealth creation. The four distinctive
dimensions of SE are: an entrepreneurial mind- set, an entrepreneurial
culture and entrepreneurial leadership, the strategic management of
resources and applying creativity and developing innovation.
o CODING: 1, 2, 3, 5
4. Ireland and Webb (2007) – Business Horizons
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o Strategic entrepreneurship is a value-creating intersection between
strategy and entrepreneurship, balancing exploration and exploitation of
opportunity; balancing resources between exploration and exploitation;
and maintaining continuous streams of innovation. Thus, SE is concerned
with actions the firm intends to take to exploit the innovations that result
from its efforts to continuously explore for innovation-based opportunities
(i.e., new organizational forms, new products, new processes, etc.).
o Strategic entrepreneurship (SE) is a term used to capture firms’ efforts to
simultaneously exploit today’s competitive advantages while exploring for
the innovations that will be the foundation for tomorrow’s competitive
advantages.
o In other words, there is a tension is between doing what is necessary to
exploit today’s competitive advantages and exploring today for innovations
that can be the foundation for the firm’s future competitive advantages.
o Strategic entrepreneurship is the means through which firms
simultaneously exploit their current competitive advantages while
exploring for future opportunities.
o CODING: 1, 2, 3, 4, 5
5. Ketchen (2007) – Strategic Entrepreneurship Journal
o Strategic entrepreneurship refers to an approach to pursuing superior
performance through both strategic and entrepreneurial activities.
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Specifically, a firm engaged in strategic entrepreneurship attempts to
concurrently exploit existing competitive advantages (the hallmark of
strategy) and create new opportunities (a core endeavor of
entrepreneurship).
o CODING: 1, 2
6. Ketchen, Ireland, and Snow (2007) – Strategic Management Journal
o Strategic entrepreneurship (SE) refers to firms’ pursuit of “superior
performance” through simultaneous opportunity-seeking and advantage-
seeking activities.
o CODING: 1, 2
7. Ireland and Webb (2009) – Business Horizons
o Strategic entrepreneurship is the exploration for future sources of
competitive advantage, combined with exploitation of current sources of
competitive advantage and has been proposed as a means via which
decision makers can manage uncertainty.
o Strategic entrepreneurship is a term used to capture firms' efforts to
simultaneously exploit today's competitive advantages while exploring for
the innovations that will be the foundation for tomorrow's competitive
advantages. The SE concept, as we are describing it, is somewhat new for
academics and business practitioners; however, the concept is important
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in that effective SE practices result in a firm being able to form a balance
between opportunity-seeking (i.e., exploration) and advantage-seeking
(i.e., exploitation) behaviors.
o SE is a process through which resources are used for both exploration
and exploitation purposes.
o CODING: 1,2, 3, 5
8. Kuratko and Audretsch (2009) – Entrepreneurship Theory and Practice
o Strategic entrepreneurship describes a deliberate and enacted desire of a
firm to seek for and respond to shifts in the external environment and is
the simulation of entrepreneurial activity to achieve strategic goals. It deals
with the identification and exploitation of opportunities while
simultaneously creating and sustaining a competitive advantage. A stated
and committed entrepreneurial strategy enables the employees to direct
their innovation towards a common goal, enabling the release of creative
energy that a firm could use to improve its competitive position. It starts
when the entrepreneur is less concerned with issues linked to short-term
survival and more with those related to long-term success.
o CODING: 1, 3, 5
9. Kyrgidou and Hughes (2010) – European Business Review
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o SE can be defined as a process that facilitates firm efforts to identify
opportunities with the highest potential to lead to value creation, through
the entrepreneurial component and then to exploit them through measured
strategic actions, based on their resource base. The entrepreneurial
aspect contributes to the ability of identifying opportunities and to the
willingness of firms to pursue new opportunities, whilst the strategic
perspective enables them to isolate and exploit those opportunities most
likely to lead to sustainable competitive advantage and subsequent means
by which to form advantage.
o CODING: 1, 2, 3
10. Mathews (2010) – Organization Studies
o Strategic entrepreneurship is the activity that drives the economy in new
directions through the recombination of resources, activities and routines
by firms, and the entrepreneur as the economic agent who in principle
lacks resources (but knows where to find them), who becomes aware of
opportunities that can be turned into profit, and acts to realize these
opportunities through resource mobilization and activation in the pursuit of
profit. The capitalist institution that supports entrepreneurship is credit,
which enables resource-poor entrepreneurs to mobilize business assets
and mount challenges to incumbents. This is an approach to
entrepreneurship that is entirely consistent with Lachmann’s vision of
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subjective expectations and imagination relating to resource combination
and recombination leading to successive capital restructuring at the level
of the economy.
o CODING: 5
11. Webb, Ketchen, and Ireland (2010) – Journal of Family Business Strategy
o A firm engages in strategic entrepreneurship when it simultaneously
pursues exploration for future business domains and exploitation of
current domains.
o Strategic entrepreneurship is simultaneously exploring for future business
domains while exploiting current domains in order to consistently produce
superior performance.
o CODING: 1, 2, 3, 4
12. Hitt, Ireland, Sirmon, and Trahms (2011) – The Academy of Management
Journal
o Strategic entrepreneurship allows those leading and managing firms to
simultaneously address the dual challenges of exploiting current
competitive advantages (the purview of strategic management) while
exploring for opportunities (the purview of entrepreneurship) for which
future competitive advantages can be developed and used as the path to
value and wealth creation.
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o SE is concerned with advantage-seeking and opportunity-seeking
behaviors resulting in value for individuals, organizations, and/or society.
SE involves actions taken to exploit current advantages while concurrently
exploring new opportunities that sustain an entity’s ability to create value
across time.
o CODING: 1, 2, 3, 4
13. Kyrgidou and Petridou (2011) – Technology Analysis & Strategic Management
o Strategic entrepreneurship captures firms’ efforts to simultaneously excel
at opportunity seeking and advantage seeking. Successfully achieving the
balance between opportunity-seeking and advantage-seeking behaviors is
effective strategic entrepreneurship.
o CODING: 1
14. Luke, Kearins, and Verreynne (2011) – International Journal of Entrepreneurial
Behavior & Research
o Strategic entrepreneurship is a distinct process, founded on bringing
something new to the market; a combination of innovation, opportunity
identification, and growth.
o Strategic entrepreneurship is entrepreneurial activity which is directly
aligned with and leverages from a business’s core competencies
o Strategic entrepreneurship is a process represented by four key aspects:
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i. entrepreneurial activity;
ii. applied in the strategic context of business;
iii. which develop expertise within their core skills and resources, and;
iv. leverage from that by transferring and applying their knowledge of
those skills and resources to new products, services, or markets.
o The nature of strategic entrepreneurship may take various forms, ranging
from incremental to radical innovations, with deliberate to emergent
approaches. Strategic entrepreneurship offers the potential for financial
benefit, subject to managing changes in both internal and external forces
(e.g. the external environment).
o CODING: 1, 2, 5
15. Kansikas, Laakkonen, Sarpo, and Kontinen (2012) – International Journal of
Entrepreneurial Behavior & Research
o Strategic entrepreneurship is entrepreneurial (i.e. opportunity-seeking
behavior) and strategic (i.e. advantage-seeking) planning and action
taking designed to create wealth.
o The drivers of strategic entrepreneurship are entrepreneurial leaders who
focus on developing actions that lead to opportunity-driven decision-
making
o CODING: 1, 2