DOMAIN OF ENTREPRENEURSHIP RESEARCH (2^nd Edition)

Entrepreneurship Summary by Anand

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Domain of entrepreneurship research

Note:

Page 351 – 372 are not for Assignment 2 and the examination.

1. Development – and lack thereof – in entrepreneurship research

   1. Main Focus of research

This paper mainly focuses on the following although you found entrepreneurship is defined in various dimensions like behaviour, outcome, growth, etc.

1. Definitions of entrepreneurship in dimensions of:

   1. Societal phenomenon - function of entrepreneurship in society

   2. Scholarly domain - what researchers should study in order to generate maximum knowledge about this societal phenomenon

1. Aims

The author aimed to achieve 3 things in this paper

1. Clearer distinction between the definitions of entrepreneurship (societal phenomenon vs. scholarly domain)

2. Domain description that is more complete than “societal phenomenon” and “scholarly domain”

   1. To find an agreeable middle ground on important issues where entrepreneurship scholars seemingly disagree

   2. To combine Venkataraman’s and Gartner’s views on entrepreneurship

3. Pointing out what the suggested domain delineation implies for the design and analysis of empirical research on entrepreneurship

1. Other Discussions

   1. Entrepreneurship as distinct domain

   2. Entrepreneurship belongs in the disciplines

   3. Issues related to emergence, process, heterogeneity, and level of analysis.

1. Entrepreneurship as societal phenomenon

   1. Definition of Entrepreneurship by economic activity

1. Focus on behaviour only - If you think about entrepreneurs that act under genuine uncertainty in society, the definition should be based on behaviours (not outcomes).

2. Focus on behaviour and outcomes – Definition “Entrepreneurship consists of the competitive behaviours that drive the market process in economic system.”

3. Reason of choosing definition in 2.1.2 – This definition explains:

   1. Role of entrepreneurship in society

   2. Market Process driven by suppliers (not customers, legislators, or natural forces)

   3. Effects of suppliers on outcomes in market

4. Market-Driven Process

   1. If the activity does not makes any difference in market, it is not entrepreneurship.

   2. Driving the market process does not require that the first mover makes a profit but refers to the suppliers as a collective. Leading to a lasting change in the market is the most important.

5. Effects of resources on market driving – Resources (Sellers and Offerings) are put to effective/ efficient use.  Market process means will be more efficiently driven.

6. Focus on newness – Definition “Introduction of new economic activity”

   1. Leads to change in the marketplace.

   2. Referring to Figure 1 along the market axis, “new” implies entrepreneurship can be:

      1. An entirely new market emerges.

      2. An activity is new to an existing market.

   3. Referring to Figure 1 along the firm axis, “new” can be:

      1. The new activity is an independent start-up. (Entrepreneurship)

      2. An internal new venture (Not Entrepreneurship)

7. New Offer as Entrepreneurship (Fig. 1 – Q1)

   1. Type 1::: New Product or Service

      1. Something new is introduced that a new market is created.

      2. No supplier has previously made the same offer in the same market.

   2. Type 2::: New Bundle/ Combination - Combination of product and service components (e.g. including into package deal) – Although the products/ services are not new to the market, packing or combination is unique to the market. Moreover, the combination newness is perceived by buyers and competitors. Customers will see changed value of products/ services. Then, this affects choices (in competition) in the market.

   3. Type 3::: Price/ value relation - Does not create a new market, but drives the market process because it changes consumer choices and give other competitors reason to change their offerings. (Note: Anything that changes the price or the value offered without creating a new market) For example:

      1. Division of labour among different actors in production and distribution of the end product

      2. Service after sale

      3. Discount

8. New Competitor as Entrepreneurship (Fig. 1 – Q1)

   1. A new start-up firm enters the market.

   2. An existing firm launches a new product line. – Although firms supply the market with the same product, the increment of product lines affect customers’ choices and then more competitive market.

   3. Imitative entry (because of impact on market process and customers’ behaviours) – This does not mean a perfect clone of an existing product. This means trying to include innovation to the product after seeing success of the existing product. For example, mobile phones were initially produced for communication. Afterwards, software and touch screen technology were brought to develop the copied products. Not only did competition took place in mobile phone industry, but competition took place in the markets of software and touch screen technology.

9. Geographical Market Expansion as Entrepreneurship (Fig. 1 – Q4)

   1. Internationalisation

   2. Market process in new places

   3. New market category of economic development

10. Organizational and Ownership Changes are not Entrepreneurship (Fig. 1 – Q2)

    1. Although this facilitates the creation of new economic activity by the organization, this only affects job satisfaction (like financial performance or liquidity in management) - NOT CUSTOMER SATISFACTION (So it does not affect choices of customers and competitors)

    2. There are at least four cases of Organisational and Ownership Changes

       1. Organisational change (like takeover) is intended to lead to more new market offerings by the firm. (Despite intention for new market offerings, new market offerings are indirect effects in the next step (NOT DIRECT effects).)

       2. Organisational change is like the previous one, but the intended increase in new market offerings does not happen.

       3. The change is undertaken for other reasons and has no effect on the firm’s market offerings.

       4. The change is undertaken for other reasons, but it has the unintended effect of also making the firm more entrepreneurial. (Just indirect effect, NOT DIRECT)

    3. To conclude, organisational/ ownership/ legal changes just increases opportunities (not market process) in the market.  When you have more opportunities, competitive behaviours or activities will affect changes in market process.

    4. The case in Q2 is disputed by many scholars. The study of how organizational change relates to discovery and exploitation of new venture ideas remain an important question for entrepreneurship as a scholarly domain. (Topic No. 3)

11. Business as Usual and Non-Entrepreneurial Growth are not Entrepreneurship (Fig. 1 – Q3)

    1. Void of novelty

    2. Routine activities are example of Q3.

    3. Maintenance is also example of Q3.