Frontiers of Entrepreneurship Research

LEVERAGING THE AFFORDANCES OF THE EMERGING 3D INTERNET FOR ENTREPRENEURIAL "NEXT PRACTICES": SELECTED CASE STUDIES FROM THE NORDIC CREATIVE INDUSTRIES (INTERACTIVE PAPER)

Lisbeth Frolunde et al. — Tue, 09 Oct 2012 06:37:32 PDT

Recent technological advances have led to the rapid development of computer-generated spaces that enable individual users to in a sense “step into the Internet” and many offer 3D (three dimensional) graphics. Users can immerse themselves in various ways; communicate, collaborate, create, and even organize economic activity. The 3D Internet is currently known mainly for entertainment or training purposes, including virtual worlds, conferences, simulations, role-playing games. While 3D Internet-enabled technologies are advancing rapidly, this growth has been accompanied by hype about opportunities for entrepreneurship.

Unfortunately, the literature offers sparse knowledge at the industry level. There is a lack of overview regarding 3D Internet entrepreneurship practices and the real challenges faced by entrepreneurs. In this study, we explore the potential as well as the hindrances to new venture creation related to the 3D Internet. Our theoretical basis is affordances, or the material and social properties of any technology in relation to affording actions by humans..

Our first research question focuses on the perception of affordances by entrepreneurs: what does the 3D Internet offer or afford as a “space” for entrepreneurial practices? Our second research question focuses on understanding how entrepreneurs utilize their social networks. Our approach to entrepreneurship is social-- concerned with the dynamics of social interactions and networked information ecology..

THE EXPLOITATION OF BUSINESS OPPORTUNITIES: PATTERNS, BIASES, AND PROCESSES (INTERACTIVE PAPER)

Joern H. Block et al. — Tue, 09 Oct 2012 06:37:31 PDT

Start-up companies, result from a series of activities centered on the creation of value from a new commercial opportunity. The creation of these new ventures is contingent upon the efforts of an individual who first identifies the opportunity and then actively engages in the pursuit of the same; Shane and Venkatraman (2000) refer to these two essential activities as opportunity exploration and opportunity exploitation.
However, while we find that management scholars have focused extensively on the activities related to opportunity, our understanding of opportunity exploitation remains quite limited. To guide our research, we examine the following research questions:
1. How does prior experience/education/social background influence the mode of opportunity exploitation?
2. How does an individual’s personality influence the mode of opportunity exploitation?

CONCEPTUALIZING, MEASURING AND VERIFYING THE “BOTTOM OF THE PYRAMID”: QUANTITATIVE RESEARCH INTO THE DICHOTOMY OF HOPE AND CRITICISM FROM AN ENTREPRENEURIAL PERSPECTIVE (INTERACTIVE PAPER)

Christoph K. Streb — Thu, 04 Oct 2012 13:47:01 PDT

C.K. Prahalad argues that if multinational corporations were to adapt, via the complex interaction between market players, their products and services to the requirements of those earning “bottom of the pyramid” (BoP) incomes, they could create additional value, but also achieve social transformation and eradicate poverty (Prahalad & Hammond, 2002; Prahalad & Hart, 2002). Key to orchestrating these aims is “entrepreneurship on a massive scale” (Prahalad, 2010, p. 26), suggesting that there is a strong interrelation between this concept and entrepreneurial efforts.

This article is a response to the scientific debate on Prahalad’s BoP approach. It develops a conceptual model that allows the hypothesized interrelations between the key variables of multinational corporations’ involvement in developing economies and their effects on entrepreneurial efforts to be quantitatively operationalized.

THE MODERATING ROLE OF LEARNING ON COMPETITIVE ADVANTAGE: LONGITUDINAL EVIDENCE FROM YOUNG FIRMS (INTERACTIVE PAPER)

Ossi Pesämaa et al. — Thu, 04 Oct 2012 13:47:00 PDT

The question of how young firms reconcile the absence of well-established learning routines arising from the “liabilities of newness” with the “learning advantages of newness” has received scant attention in entrepreneurship. While older firms follow established learning routines and sometimes face problems in overcoming inertia, young firms with lower levels of inertia are better poised to explore, search and test unique avenues for their products and services. The process of learning and capability development as well as establishing uniqueness in their product offerings is an important part not only in the early stages of firm growth, but also in firm survival. Given their inexperience, for young firms, these learning processes are iterative and include contrasting learning loops that sometimes progress and at other times digress from initially perceived unique ideas. Such processes are embedded within capabilities that the firm develops and nurtures. Based on this premise and adopting a capabilities-based view, we examine how strategic networks and environmental knowledge affects uniqueness- mediated performance in young firms. We identify firms with digressive learning strategies based on their self-assessment of learning and compare them with other firms to demonstrate a differential effect on performance.

GENOME-WIDE ASSOCIATION STUDIES IN ECONOMICS AND ENTREPRENEURSHIP RESEARCH: PROMISES AND LIMITATIONS (SUMMARY)

Philipp D. Koellinger et al. — Thu, 04 Oct 2012 13:46:59 PDT

The recently developed genome-wide association study (GWAS) design enables to identify genes specifically associated with economic outcomes. This is a promising new approach for economics research that we aim to apply to the choice for entrepreneurship. The present article is inspired by our ongoing work, describing the GWAS design and how it can be applied to study economic outcomes. To the best of our knowledge, this is the earliest attempt to apply GWAS to an economic outcome of a relatively general, and hence complex, nature and will reveal potentials and limitations of GWAS for economics research. We describe the GWAS design and illustrate the statistical multiple testing problem that arises in this context. Finally, the interpretation of findings from GWAS on economic outcomes is not straightforward and some guidelines are provided in this regard.

BUSINESS PLANNING: DRIVING OR PREVENTING ENTREPRENEURIAL ACTIVITY? (SUMMARY)

Sven Kleinknecht et al. — Thu, 04 Oct 2012 13:46:56 PDT

The field of entrepreneurship, especially in teaching (Honig, 2004), has strongly emphasized the importance of business planning, despite limited empirical evidence for its usefulness with respect to new venture performance (Gruber, 2007). Apart from the performance perspective, one can look at business planning as a gate-keeper for nascent entrepreneurs. Writing a business plan can trigger nascent entrepreneurs to fundamentally reconsider their intentions. We hypothesize that business planning reduces entrepreneurial activity, by (i) ensuring rationality in planning a new venture, (ii) acting as a self-selection mechanism for unsuitable or less than serious entrepreneurs, and (iii) constituting a signal of emerging entrepreneurial activity provoking external pressures against founding.

10 YEARS OF PSED DATA - CHANGING THE GAME OR NOT (INTERACTIVE PAPER)

Mikael Samuelsson — Thu, 04 Oct 2012 07:21:52 PDT

This study provides empirical answers to three questions: 1) how do new venture initiatives change in the nascent venturing process. 2) Is it possible to identify and track change agents across time and 3) how do change influence performance in the nascent venturing process across time. Asking these questions is important for two main reasons: 1) creating awareness about change and its antecedents could help entrepreneurs in their strategizing efforts in the nascent venturing process in order to be more efficient. Understanding change also increases our ability to develop more dynamic explanations to entrepreneurship as well as to reduce methodological errors in longitudinal studies.

UNRAVELING VENTURE CREATION PROCESSES WITH THE HELP OF SEQUENCE ANALYSES (INTERACTIVE PAPER)

Andrea M. Herrmann et al. — Thu, 04 Oct 2012 07:21:51 PDT

Our paper provides two major insights. First, we find sequence analyses (SA) to be a useful tool for the study of venture creation processes. More concretely, our SA studies of the PSED2 database identify 16 ideal-typical ways of venture creation. We also identify those factors that lead entrepreneurs to set up their business in one way rather than another, which include: the composition of the founding team, the start-up motive, the venture`s industry and its region. Second, to offer guidance on how to use SA methods, we develop a decision tree that makes the alternatives of running SA analyses explicit.

CHARTING THE GROWTH OF ENTREPRENEURSHIP: A CITATION ANALYSIS OF FER CONTENT, 1981-2008 (INTERACTIVE PAPER)

Jeffrey Kushkowski — Thu, 04 Oct 2012 07:21:51 PDT

Frontiers in Entrepreneurship Research published a total of 3395 articles and summaries of research in its proceedings volumes between 1981 and 2008. This research analyses the authors, topics and institutions included in FER and describes the inter-relationships between contributing scholars. This research contributes to the continuing discussions about the nature of entrepreneurship conducted by both entrepreneurship scholars and information scientists. Previous entrepreneurship research by Grégoire, Noël, Déry and Béchard, (2006) explored the conceptual convergence in the field. Other researchers (Reader & Watkins, 2006; Schildt, Zahra &, Sillanpaa, 2006; Zahra, 2005) have examined the social nature of entrepreneurship research, communities within entrepreneurship, and the relationship between entrepreneurship and other disciplines. This project expands on work by information science researchers explaining the growth of research specialties (Morris & Vander Veer Martens, 2008; Casillas & Acedo, 2007) and the intellectual structure of disciplines (Ramos-Rodriguez & Ruiz-Navarro, 2004).

SOCIAL BRICOLEURS’ LIFE STORIES: THE INTERRELATIONS BETWEEN MOTIVATIONAL ANTECEDENTS, OPPORTUNITY RECOGNITION AND VISION (INTERACTIVE PAPER)

Ronit Yitshaki et al. — Thu, 04 Oct 2012 07:21:48 PDT

Social entrepreneurs are important change agents addressing social needs not met by governmental policies and actions (Roper & Cheney, 2005). The expansive growth of social entrepreneurship creates the need for a better understanding of the characteristics and motivations of social entrepreneurs, including opportunity recognition and development processes. We focus on social bricoleurs who address small-scale local social needs, typically, for disadvantaged groups that have limited capacity to help themselves. We examine social bricoleurs in different contexts and cultures, focusing on motivations and the way in which they make association between their past (childhood), present and future actions.

WOLVES IN SHEEP'S CLOTHING - ASSESSING THE INTEGRITY OF SOCIAL ENTREPRENEURS (INTERACTIVE PAPER)

Ann-Kristin Achleitner et al. — Thu, 04 Oct 2012 07:21:45 PDT

We analyze selection criteria used by social investors in order to evaluate the integrity of social entrepreneurs applying for funding. From a theoretical point of view, three different perspectives may be relevant for the perception of the social investor. First, social investors may focus on the social motivation of the entrepreneur as an indicator for the long term pursuit of the social mission. Second, reputation is another criterion which refers to stakeholders’ evaluation and is based on information about past actions and performance. Third, corporate governance structures such as the presence of other external investors in the board lead to monitoring of the social entrepreneur and may act as a positive signal for the integrity of the entrepreneur.

We analyze how these selection criteria separately and jointly drive the perception of the integrity of the social entrepreneur. Our paper thereby contributes to the understanding of factors influencing the external portrayal of integrity.

FINANCIAL ASYMMETRIES AND COUNTERACTIVE STRATEGIES OF SOCIAL ENTERPRISES- A QUANTITATIVE ANALYSIS (SUMMARY)

Christiana Weber et al. — Thu, 04 Oct 2012 07:21:44 PDT

With regard to the nature of social enterprises to blend business and philanthropic approaches Froelich (1999) speculates whether “greater emphasis on commercial strategies lead to reduced efforts and outcomes in the traditional arenas [of funding]” (p. 264). While the discussion about the emphasis on commercial income by social enterprises is mainly focused on (dis-)advantages of philanthropic versus commercial income to our best knowledge there is no publication in the emerging social entrepreneurship literature that answers the question which strategy social enterprises actually apply to achieve financial independency. Thus, drawing on resource dependence theory (Pfeffer/ Salancik 1978/ 2003), we suggest two alternative strategies for social enterprises to move toward commercial market-based (earned) income and phrase these strategies accordingly in two mutually exclusive hypotheses.

UNTANGLING THE SOCIAL AND ECONOMIC ORIENTATION OF SOCIAL ENTREPRENEURS. WHAT BRINGS THE ATTENTION OFSOCIAL ENTREPRENEURS TO SOCIAL AND ECONOMIC GOALS? (SUMMARY)

Robin Stevens et al. — Thu, 04 Oct 2012 07:21:43 PDT

As attention is argued to be a limited resource (Cyert & March, 1963; Simon, 1947), firms cannot attend to all issues concurrently and must continually divide their attention to different goals (Greve, 2008; Cyert & March, 1963) and environmental stimuli (Hambrick and Mason, 1984; Ocasio, 1997). Since there is a growing societal and political consensus about the fact that firms need to address social issues, questioning the narrow focus on profit maximization (Margolis and Walsh, 2003), the question of what factors influence the attention patterns towards economic and social goals, is all the more relevant. This paper uses the Attention Based View (ABV) (Ocasio, 1997) to study how the values of the entrepreneur, organizational identity and resource availability affect the attention to social and economic goals. The study further hypothesizes that prior performance acts as a moderator on these relations.

THE ROLE OF INNOVATIONS WITHIN SOCIAL ENTREPRENEURSHIP: AN EMPIRICAL STUDY ON FINNISH SOCIAL ENTERPRISES (SUMMARY)

Hanna Duvnäs et al. — Thu, 04 Oct 2012 07:21:43 PDT

Although innovation has the potential of offering social entrepreneurial initiatives great possibilities to focus on social issues, it appears that the role of innovations within social entrepreneurship has been studied only to a very limited extent. As a contribution to covering this gap in the literature, the relation between core innovations within social enterprises and both the profit expectations and sustained competitive advantage viewed from a resource-based perspective are studied in this paper.

“ENTREPRENEUR MAKES GOOD”: SOCIAL ENTREPRENEURSHIP AND OPPORTUNITY CREATION (SUMMARY)

Michael Conger et al. — Thu, 04 Oct 2012 07:21:42 PDT

The study of social implications of entrepreneurship, and the influence of socio-cultural factors on entrepreneurial action, is still in its infancy. Although there is a growing interest in “social entrepreneurship” there is a critical need for empirical studies, and for more established entrepreneurship theories and streams of research, to be applied to the context of socially beneficial entrepreneurship (Short et al., 2009). Opportunity recognition and creation has been identified as a defining topic for entrepreneurship research (Shane & Venkataraman, 2000). Key theoretical questions have been raised regarding this topic including how entrepreneurial motivation affects opportunity recognition (Shane et al, 2003) and whether entrepreneurial opportunities are discovered or created (Sarasvathy, 2002; Alvarez & Barney, 2007). Several entrepreneurship scholars have theorized about why and how social entrepreneurship opportunities come to be but empirical study has not yet been brought to bear on these topics. In this study, we seek to bridge the theoretical predictions of the opportunity literature with the context of entrepreneurial action focused on creating social, as well as economic, benefits. We draw on identity theory (Stryker, 1980) to empirically examine how the entrepreneur’s self-concept affects her propensity to discover and/or create opportunities for socially beneficial entrepreneurship.

INSTITUTIONAL ENVIRONMENT AND INSTITUTIONAL INNOVATION IN SOCIAL ENTREPRENEURSHIP: EVIDENCE FROM THE INVESTMENTS OF EUROPEAN VENTURE PHILANTHROPY FUNDS (SUMMARY)

Rongdong Chen et al. — Thu, 04 Oct 2012 07:21:41 PDT

All forms of social entrepreneurship need to achieve their social missions through well-defined solution models, and the literature has underscored the institution-building dimension of solution models adopted by social purpose organizations (Austin et al. 2006; Mair and Marti, 2006; Zahra, 2008). The notion of institutional innovation, however, gives rise to a theoretical puzzle, defined as the paradox of embedded agency (Holm, 1995; Seo and Creed, 2002). That is, while the hostility or inadequacy of institutional environment justifies the creation of institution-building social ventures, unfriendly or resource-constraint institutional environment may threaten the very survival and growth of those change agents. The question then becomes how social investors, particularly the emerging venture philanthropy funds, make investment decisions on institutional innovations. Do they follow the same logic of business investors to prefer investments in institution-building organizations only in supportive contexts? Do different dimensions of institutional environment have different impacts on investment choices?

EXPLORING THE CONDITIONS FOR SUSTAINABLE SOCIAL ENTREPRENEURSHIP (SUMMARY)

Zong-Tae Bae et al. — Thu, 04 Oct 2012 07:21:40 PDT

Entrepreneurship is a way of thinking and acting to seize and pursue an opportunity without concern for current resources or capabilities. Many studies, such as Stevenson (1983) and Timmons (1999), have analyzed the nature of entrepreneurship and the mechanism of entrepreneurial process. The domain of entrepreneurship has been expanded from commercial entrepreneurship to social entrepreneurship, and entrepreneurial approaches have been successfully utilized to solve social problems and create social values. Some of social enterprises have developed “sustainable” business models, but the general conditions for “sustainability” of business models for social entrepreneurship have not been fully explored. In this context, we aim to identify the driving forces for social entrepreneurship and find the sustainability conditions for social entrepreneurship.

BUSINESS TAKEOVER OR NEW VENTURE START? INDIVIDUAL AND ENVIRONMENTAL DETERMINANTS FROM A CROSS-COUNTRY STUDY (SUMMARY)

Roy Thurik et al. — Wed, 03 Oct 2012 13:42:45 PDT

There are multiple ways to become an entrepreneur such as starting a new firm or taking over an existing one. The literature to date has largely been silent about the determinants of the preferred mode of entry. This paper attempts to fill this research gap. We argue that an individual’s personality characteristics such as growth ambition, risk attitude and inventiveness influence the preferred mode of entry intro entrepreneurship. Starting a firm from scratch can be considered as more entrepreneurial, exciting, complex, and risky than taking over an existing business with an already well-developed business model and existing customers. Environmental factors such as the administrative difficulty to set up a new venture also play important roles in the mode of entry decision. In addition, some countries like Japan or South Korea are known for their ‘no failure’ culture, which presumably discourages individuals from setting up a new business rather than taking over an existing one.

THE PERFORMANCE DETERMINANTS OF TECHNOLOGY BUSINESS INCUBATORS: A RESOURCE BASED VIEW (SUMMARY)

Zouhaïer M’Chirgui et al. — Wed, 03 Oct 2012 13:42:44 PDT

Technology business incubators have been around for about half a century. Despite their increasing popularity, one major question that is often raised is the return one gets on these investments. Although most efforts have brought an interesting array of often descriptive accounts in examining incubators’ performance, some do provide conceptual or integrative frameworks. However, there is a general believe that the jury is still out in terms of the overall effectiveness of these investments. This paper adopts a resource-based view of incubator performance in order to better understand why some incubator programs are more successful than others in supporting the development of new technology or science-based firms (NTSBF), in a unique and largely unexplored setting.

DECIDING TO EXPLOIT: THE PROJECT, THE PORTFOLIO, AND THE PERSON (INTERACTIVE PAPER)

Judith Vollmoeller et al. — Wed, 03 Oct 2012 10:17:55 PDT

Research and development (R&D) is a major source of entrepreneurial opportunities. Given limited resources (Simon, 1947; Ocasio, 1997), firms must decide whether or not to exploit a specific, newly discovered project. Existing literature is relatively silent on the project attributes other than projected financial risk and reward that managers consider in their exploitation decisions, and how they consider projects in the context of their innovation portfolio and the influence of personal characteristics on the decision to exploit. We build on the project innovation, portfolio strategy, and managerial psychology literatures to build a model covering the influence of project, portfolio, and person on mangers’ exploitation decisions.