Summary Artikelen Innovation & Entrepreneurship 2016

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Summary - Artikelen Innovation & Entrepreneurship 2016

  • 1 Shane, S. and S. Venkataraman (2000), The Promise of Entrepreneurship as a Field of Research

  • What is the problem with the lack of a conceptual framework in the field of entrepreneurship?
    People have trouble identifying the contribution of the field entrepreneurship to the broader domain of business studies
  • On which nexus of two phenomena does entrepreneurship involve?
    • The presence of lucrative opportunities
    • The presence of enterprising individuals
  • In which terms is entrepreneurship defined by most researchers?
    Solely in terms of who the entrepreneur is and what he or she does
  • How do the authors define the field of entrepreneurship?
    As the scholary examination of how, by whom, and with what effects opportunities create future goods and services are discovered, evaluated, and exploited.
  • Entrepreneurship involves the study of....
    • Sources of opportunities
    • Process of discovery, evaluation, and exploitation of opportunities
    • Individuals who discover, evaluate, and exploit them  
  • What are the three sets of research questions about entrepreneurship?
    1. Why, when, and how opportunities for the creation of goods and services come into existence
    2. Why, when, and how some people and not others discover and exploit these opportunities
    3. Why, when, and how different modes of action are used to exploit entrepreneurial opportunities
  • What do the authors argue about equilibrium models?
    Some models are useful for understanding entrepreneurship, but these models are necessarily incomplete. Entrepreneurial opportunities either do not exist or are assumed to be randomly distributed across the population. People in equilibrium models cannot discover opportunities that differ in value from those discovered by others, who becomes an entrepreneur depends solely on the attributes of people.
  • Why do some people and not others engage in entrepreneurial behavior?
    Because of the tendency to respond to situational cues of opportunities. Not a stable characteristic that differentiates some people from others.
  • Does entrepreneurship require creation of new organization?
    No, but it can include. Entrepreneurship can occur within an existing organization
  • Why study entrepreneurship?
    1. Much technological info embodied in products & services - entrepreneurship is a mechanism by which society converts technical info into these products and services
    2. Entrepreneurship is a mechanism through which temporal and spatial inefficiencies are discoverd and mitigated
    3. Entrepreneurship is the crucial engine in society
  • What are entrepreneurial opportunities?
    Those situations in which new goods, services, raw materials, and organizing methods can be introduced and sold at greater than their cost of production
  • How is the recognition of opportunities called?
    A subjective process, although the opportunities themselves are objective phenomena that are not known to all parties at all times
  • What do entrepreneurial opportunities require?
    The discovery of new means-end relationships
  • What do opportunties to enhance the efficiency of existing goods, services, raw materials, and organizing methods require?
    Optimization within exising means-end frameworks
  • What are the three different categories of opportunities?
    1. The creation of new information (as occurs with the invention of new technologies)
    2. The exploitation of market inefficiences (that result form information asymmetry, as occurs across time and geography)
    3. The reaction to shifts in the relative costs and benefits of alternative uses for resources (as occurs with political, regulatory, or demographic changes)
  • Why do entrepreneurial opportunities primarily exist?
    Because different members of society have different beliefs about the relative value of resources, given the potential to transform them into a different state
  • When does an entrepreneurial discovery occur?
    When someone makes the conjecture that a set of resources is not put to its "best use"
  • When will and individual earn entrepreneurial profit?
    When the conjecture is acted upon and is correct. (when incorrect, it will incur an entrepreneurial loss)
  • For which 2 reasons does entrepreneurship require that people hold different beliefs about the value of resources?
    1. Entrepreneurship involves joint production, where several different resources have to be brought together to create the new product or service. The entrepreneur holds different beliefs about the accuracy of resource prices that must differ from those of resource owners and other potential entrepreneurs
    2. If all people (potential entrepreneurs) possessed the same entrepreneurial conjectures, they would compete to capture the same entrepreneurial profit, dividing it to the point that the incentive to pursue the opportunity was eliminated.
  • An individual that is alert to the presence of an "error" may buy resources where prices are too low, recombine those, and sell the outputs where prices are too high.
  • What types of change offer a continous supply of new information about different ways to use resources to enhance wealth?
    Technological, political, social, regulatory and other types (Schumpeter, 1934)
  • Why do some people obtain information before others about resources lying fallow, new discoveries being made, or new markets opening up?
    Because information is imperfectly distributed, all economic actors do not receive new information at the same time
  • What can happen when entrepreneural opportunities are exploited?
    Information diffuses to other members of society who can imitate the innovator and appropriate some of the innovator's entrepreneurial profit (which could have been the incentive to exploit the opportunity (profit))
  • What is the consequence of imitation?
    • Increase overall demand
    • Competition begins to dominate
  • The exploitation of opportunity provides information to resource providers about the value of the resources that they possess and leads them to raise resource prices over time, in order to capture some of the entrepreneur's profit for themselves.
  • On which factors does the duration of any given opportunity depend?
    • The provision of monopoly rights (can increase duration)
    • The slowness of information diffusion or the lags in the timeliness with which others recognize information (can increase duration)
    • The inability of others to imitate, substitute, trade for or acquire the rare resources required 
  • What are the two broad categories of factors that influence the probability that particular people will discover particular opportunities?
    1. The possession of the prior information necessary to identify an opportunity (information corridors)
    2. The cognitive properties necessary to value it
  • What about information corridors?
    Human beings all possess different stocks of information, and these stocks of information influence their ability to recognize particular opportunities. 
  • What are stocks of information?
    Stocks of information create mental schemas, which provide a framework for recognizing new information.
  • An entrepreneur has to have prior information that complements to the new information, which triggers an entrepreneurial conjecture. 
  • Why do people specialize in information?
    Because specialized information is more useful than general information.
  • What about cognitive properties?
    People must be able to identify new means-ends relationships that are generated by a given change in order to discover entrepreneurial opportunities since the discovery of entrepreneurial opportunities is not an optimization process by which people make mechanical calculations in response to a given set of alternatives imposed upon them. 
  • Even if a person possesses the prior information necessary to discover an opportunity, he or she may fail to do so because of an inability to see new means-end relationships. People differ in their ability to identify such relationships. 
  • Why are entrepreneurs more likely to discover opportunities than other persons?
    Because they are:
    • Less likely to engage in counterfactual thinking
    • Less likely to experience regret over missed opportunities
    • Less susceptible to inaction inertia 
  • Why, when, and how do some people and not others exploit the opportunities they discover?
    Function of the joint characteristics of 
    • The opportunity 
    • The nature of the individual 
  • What about the nature of the opportunity?
    The characteristics of opportunities themselves influence the willingness of people to exploit them. The exploitation of an opportunity requires the entrepreneur to believe expected value of the profit will be large enough to
    • Compensate for the opportunity cost of other alternatives
    • The lack of liquidity of the investment of time and money
    • A premium for bearing uncertainty
  • When is exploitation more common?
    When:
    • Expected demand is high
    • Industry margins are high
    • Technology life cycle is young
    • Competition is not too low/too high
    • Cost of capital is low
    • Population-level learning for other entrants is available 
  • When is there a greater chance of exploitation regarding individual differences?
    • Greater financial capital
    • Useful experience in entrepreneurship (because learning reduces its cost)
    • Individual differences in perceptions
  • What can be the individual differences in perceptions?
    • The willingeness to bear risk
    • Individual differences in optimism (overly optimistic)
    • The willingness to exploit opportunities (greater self-efficacy and locus of control)
    • Greater tolerance for ambiguity
  • How is the exploitation of entrepreneurial opportunities organized in the economy?
    1. The creation of new firms (hierarchies)
    2. The scale of opportunities to existing firms (markets)
  • What is the common assumption about the exploitation of opportunities?
    Most entrepreneurial activity occurs through de novo startups.
  • People within organizations who discover opportunities sometimes pursue those on behalf of their existing organizations and sometimes establish new organizations. Independent actors sometimes sell their opportunities to existing organizations and sometimes establish new organizations to pursue the opportunities. 
  • Where does the choice of mode depend on?
    • The nature of the industrial organization
    • The opportunity
    • The appropriability regime.   
  • When is entrepreneurship less likley to take form of de nove startups?
    When capital market imperfections make it difficult for independent entrepreneurs for securing financing
  • When is entrepreneurship more likley to take form of de nove startups
    When:
    • The pursuit of the opportunity requires the effort of individuals who lack incentives to do so in large organizations 
    • Scale economies, first mover advantages, and learning curves do not provide advantages to the existing firms 
    • Industries have low barriers to entry
    • Information cannot be protected well
    • Opportunities are more uncertain
    • Opportunities destroy competence
    • Opportunities do not require complementary assets
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What about trust?
Reputation important, less need for hierarchical oversight.  Common background / homogenous group – more likely to form networks. Be it ethnic, geographic, ideological, or professional. The more homogeneous the group, the greater the trust, hence the easier it is to sustain network-like arrangements. When diversity of participants increases, trust reduces, and so does the willingness to enter into long-term collaborations. Certain kinds of institutional contexts, particular combinations of legal, political, and economic factors, are conductive to network arrangements as well as interorganizational collaborations. 
What about demand for speed?
  • Fast access to information
  • Flexibility
  • Responsiveness to changing tastes: because of their ability to disseminate and interpret new information
What about know how?
Intellectual capital or craft-based skills, both of which have been honed through years of education, training, and experience. They are based on know-how and detailed knowledge of the abilities of others who possess similar or complementary skills. Know-how: involves tacit knowledge that is difficult to codify, network forms well suited for highly skilled labor force. These assets are largely intangible and highly mobile.

Markets or hierarchical governance structures may hinder the development of these capabilities because the most critical assets – the individuals themselves – may choose to walk away. Network forms of an organization are well-suited because participants possess fungible knowledge that is not limited to a specific task but applicable to a wide range of activities.

The transfer of resources – tangible items, such as equipment, services, patents, and the like – more commonly occurs through a market transaction or among organizational units depending on the frequency and the distinctiveness of the items that are exchanged.

When partners are involved in ongoing, complementary activities – relationship is more suited to lead to sharing of critical information and development of trust. --> exchange of competencies, skills or knowledge is more likely to occur in networks.    
What are three factors that are critical components of network?
  1. Know-how
  2. Demand for speed
  3. Trust
What are two solutions?
  1. Back to arm’s length transactions; 
  2. New methods of collaboration - (both entail vertical disaggregation). 
When the pace of technological change quickens, product life cycles shorten and markets become more specialized.  Firms are trying to cope with new pressures in a variety of ways:
  • By explicitly limiting the size of work units;
  • By contracting work out
  • Through more collaborative ventures with suppliers and distributors. 
Non-market, non-hierarchical modes of exchange represent a particular form of collective action, on in which:
  • Cooperation can be sustained over the long run as an effective arrangement;
  • Networks create incentives for learning and the disseminations of information, allowing ideas to be translated into action quickly;
  • Open-ended quality of networks is most useful when resources are variable and environment uncertain
  • Networks offer highly feasible means of utilizing and enhancing such intangible assets as tacit knowledge and technological innovation. 
What are three failures that plague vertically-integrated firms?
  1. An inability to respond quickly to competitive changes in international markets;
  2. Resistance to process innovations  that alter the relationship between different stages in the production process;
  3. Systematic resistance to introduction of new products.
What are the risk of cooperative arrangements?
  • Not always successful - management problems, misperceive another's actions
  • Hidden agenda
  • Learning races  
Why preference for cooperation instead of full ownership?
  • Push side: technological constraints – tacit, not easily transferred, requires cumulative knowledge. Technological knowledge is tacit in character and cannot easily be transferred by licensing.
  • Pull side: financial concerns and advantages of risk reduction. Joining a coalition with another firm, both partners may enjoy options that otherwise would not be available to them, ranging from better access to markets, pooling or exchanging technologies and enjoying economies of scale and scope. Risk sharing is very attractive in industries where each successive generation of products is expensive to develop, and product life cycles are short.