ethe promise by s & v powerpoint[1]

8/6/2019 EThe Promise by S & v Powerpoint[1]

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The Promise of The Promise of Entrepreneurship as aEntrepreneurship as a

Field of StudyField of StudyBy Scott Shane & S. VenkataramanBy Scott Shane & S. Venkataraman

Presented by Scott DavisPresented by Scott Davis



Background onBackground on

EntrepreneurshipEntrepreneurshipTo date, the phenomenon of entrepreneurship hasTo date, the phenomenon of entrepreneurship has

lacked a conceptual framework.lacked a conceptual framework.

For a field of social science to have usefulness, itFor a field of social science to have usefulness, it

must have a conceptual framework thatmust have a conceptual framework that

explains/predicts a set of empirical phenomena notexplains/predicts a set of empirical phenomena not

explained/predicted by conceptual frameworksexplained/predicted by conceptual frameworksalready in existence in other fields (AKA don¶talready in existence in other fields (AKA don¶t

overlapoverlap).).



Intent of the StudyIntent of the Study

By providing a framework that both sheds light onBy providing a framework that both sheds light onunexplained phenomena and enhances the quality of unexplained phenomena and enhances the quality of

research, we seek to enhance the field¶s legitimacyresearch, we seek to enhance the field¶s legitimacy

and prevent its marginalization as only ³a researchand prevent its marginalization as only ³a research

setting´ or ³teaching application´ (217setting´ or ³teaching application´ (217--218).218).



Cont.Cont.

4) Consider the different modes of exploitation of 4) Consider the different modes of exploitation of

entrepreneurial opportunities.entrepreneurial opportunities.

5) Conclude w/ brief reflections on the potential value5) Conclude w/ brief reflections on the potential value

of the framework presented here (Pg.218).of the framework presented here (Pg.218).



1) Defining1) Defining

EntrepreneurshipEntrepreneurshipThe field of entrepreneurship is the scholarlyThe field of entrepreneurship is the scholarly

examination of how, by whom, and with what effectsexamination of how, by whom, and with what effects

opportunities to create future goods and services areopportunities to create future goods and services arediscovered, evaluated, and exploited.discovered, evaluated, and exploited.

The field involves the study of sources of The field involves the study of sources of

opportunities; the process of discovery, evaluation,opportunities; the process of discovery, evaluation,

and exploitation of opportunities; and the set of and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploitindividuals who discover, evaluate, and exploit

them (218).them (218).



Q¶s Researchers AskQ¶s Researchers Ask

1) Why, when, and how opportunities for the creation1) Why, when, and how opportunities for the creation

of goods and services come into existence?of goods and services come into existence?

2) Why, when, and how some people and not others2) Why, when, and how some people and not others

discover and exploit these opportunities?discover and exploit these opportunities?

3) Why, when and how different modes of action are3) Why, when and how different modes of action areused to exploit entrepreneurial opportunities (218)?used to exploit entrepreneurial opportunities (218)?



Ways to Approach Q¶sWays to Approach Q¶s

1) The disequilibrium approach (218).1) The disequilibrium approach (218).

2) Argue that E. does not require, but but can include,2) Argue that E. does not require, but but can include,

the creation of new organizations (219).the creation of new organizations (219).

Opportunities can be sold to other individuals or toOpportunities can be sold to other individuals or toexisting organizations.existing organizations.



Cont.Cont.3) Their framework complements sociological and3) Their framework complements sociological and

economic work in which researchers have examinedeconomic work in which researchers have examined

the populationthe population--level factors that influence firmlevel factors that influence firm

creation.creation.

Framework:Framework:

A) Focus on existence, discovery, and exploitation A) Focus on existence, discovery, and exploitation

of opportunities.of opportunities.

B) Examines influence of individuals andB) Examines influence of individuals and

opportunities, rather than environmentalopportunities, rather than environmental

antecedents and consequences.antecedents and consequences.

C) Framework broader than firm creation.

C) Framework broader than firm creation.



Cont.Cont.

4) Their framework also complements research on4) Their framework also complements research on

the process of firm creation (219).the process of firm creation (219).

Firm creation process researchers assume thatFirm creation process researchers assume that

opportunities exist, have been discovered, and willopportunities exist, have been discovered, and will

be exploited through creation of new firms.be exploited through creation of new firms.

Authors in study look at the conditions under which Authors in study look at the conditions under whichE. opportunities are exploited through firms andE. opportunities are exploited through firms and

markets.markets.



2) Why Study2) Why Study

Entrepreneurship?Entrepreneurship?

1) Much technical info. is ultimately embodied in1) Much technical info. is ultimately embodied in

products and services, and E. is a mechanism byproducts and services, and E. is a mechanism by

which society converts technical info. into thesewhich society converts technical info. into these

products and services (219).products and services (219).



Cont.Cont.

2) E. is a mechanism through which temporal and2) E. is a mechanism through which temporal and

spatial inefficiencies in an economy are discoveredspatial inefficiencies in an economy are discoveredand mitigated (219).and mitigated (219).

3) Of the different sources of change in a capitalist3) Of the different sources of change in a capitalist

society, Schumpeter isolated entrepreneurially drivensociety, Schumpeter isolated entrepreneurially driven

innovation in productions and processes as theinnovation in productions and processes as thecrucial engine driving the change process (219).crucial engine driving the change process (219).



3) Existence of E. Opp.3) Existence of E. Opp.

E. Opportunities: Situations in which new goods,E. Opportunities: Situations in which new goods,

services, raw materials, and organizing methods canservices, raw materials, and organizing methods canbe introduced and sold at greater than their cost of be introduced and sold at greater than their cost of

production.production.

E. opportunities differ from the larger set of allE. opportunities differ from the larger set of all

opportunities for profit b/c E. requires discovery of opportunities for profit b/c E. requires discovery of meansmeans--ends relationshipsends relationships, whereas the latter involve, whereas the latter involve

optimization within existing meansoptimization within existing means--ends frameworksends frameworks

(220).(220).



3) Why some ppl and not3) Why some ppl and not

others discover E. Opp.?others discover E. Opp.?Blind Luck?Blind Luck?

1) The possession of the prior info necessary to I.D.1) The possession of the prior info necessary to I.D.

an opportunity.an opportunity.

2) The cognitive properties necessary to value it2) The cognitive properties necessary to value it

(222).(222).

Even if a person possesses the prior info necessaryEven if a person possesses the prior info necessaryto discover an opportunity, he or she may fail to doto discover an opportunity, he or she may fail to do

so b/c of an inability to see newso b/c of an inability to see new meansmeans--endsends

relationshipsrelationships (222).(222). VisualizeVisualize



3) Decisions to Exploit E.3) Decisions to Exploit E.

OpportunitiesOpportunities

Nature of the opportunityNature of the opportunity

E. has to believe that the expected value of theE. has to believe that the expected value of the

entrepreneurial profit will be large enough toentrepreneurial profit will be large enough to

compensate for thecompensate for the opportunity costopportunity cost of other of other

alternatives (223).alternatives (223).

Research shown that, on average, E. exploitResearch shown that, on average, E. exploit

opportunities having higher expected value (223).opportunities having higher expected value (223).



3) Cont.3) Cont.

Individual DifferencesIndividual Differences

Decision to exploit and pursue opportunitiesDecision to exploit and pursue opportunities

depends upon:depends upon:

Their opportunity cost.Their opportunity cost.

Their perception.Their perception.

Individual differences in optimism.Individual differences in optimism.

Research argues that people with greater self Research argues that people with greater self--

efficacy and more internal LOC are more likely toefficacy and more internal LOC are more likely to

exploit opportunities.exploit opportunities.



4) Cont.4) Cont.

2) The sale of opportunities to existing firms (markets)2) The sale of opportunities to existing firms (markets)

(224).(224).

Research shows E. is more likely to take this formResearch shows E. is more likely to take this form

when:when:

Capital market imperfections make it difficult for Capital market imperfections make it difficult for independent entrepreneurs to secure financing.independent entrepreneurs to secure financing.



5) Conclusion5) Conclusion

Although those in the field face many difficult Q¶s, we Although those in the field face many difficult Q¶s, wehave presented a frame work for exploring them.have presented a frame work for exploring them.

Many skeptics claim that the creation of such a bodyMany skeptics claim that the creation of such a body

of theory and the subsequent assembly of empiricalof theory and the subsequent assembly of empirical

support for it are impossible.support for it are impossible.

ethe promise by s & v powerpoint[1]

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