1. ENTREPRENEURSHIP A PROCESS PERSPECTIVE
Robert A. Baron Scott A. Shane A. Rebecca Reuber
Slides Prepared by: Sandra Malach, University of Calgary
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2. 1 ENTREPRENEURSHIP: A FIELD—AND AN ACTIVITY
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LEARNING OBJECTIVES
Define “entrepreneurship” as a field of business.
Explain why the activities of entrepreneurs are so important to the economies of their countries, and why entrepreneurship is an increasingly popular career choice.
Describe the process perspective on entrepreneurship, and list the major phases of this process.
Explain why entrepreneurship can be viewed as arising out of the intersection of people and opportunities.
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LEARNING OBJECTIVES
Explain why certain sources of knowledge about entrepreneurship are more reliable and useful than others.
Describe the basic nature of systematic observation, experimentation, and reflection.
Explain the role of theory in the field of entrepreneurship.
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“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
(Sir Winston Churchill)
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DEFINITION
Entrepreneurship seeks to understand how opportunities to create something new arise and are discovered or created by specific persons who then use various means to exploit or develop them, thus producing a wide range of effects.
(Shane & Venkataraman)
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FURTHER DEFINED
Intersection of opportunities generated by changing economic, technological, and social conditions and enterprising people capable of distinguishing potentially valuable opportunities from less valuable ones and of actively exploiting them.
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KEY ACTIVITIES
Identifying an opportunity
Exploiting or developing this opportunity
Launching a new venture
Running a new business successfully
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INTRAPRENEURS
Persons who create something new inside an existing company
Allows them to adapt to changing conditions in the business environment. (Keil)
Develop a corporate culture receptive to new ideas and provide concrete rewards for innovation.(Koen & Baron)
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10. SOCIAL ENTREPRENEURSHIP
Entrepreneurship to benefit humanity
Ventures may be for-profit or not-for-profit
Most important goals are social
Economic development, Environmental sustainability and Disaster relief.
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11. ENTREPRENEURSHIP STATISTICS
More than 125,000 new businesses are launched annually (Industry Canada, 2005)
Over 2.5 million (15%) individuals are self-employed. (Industry Canada, 2005)
Activity is highest for those aged (Riverin et al)
40% of the private sector GDP is produced by SME’s (Industry Canada, 2005).
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12. TREND TOWARDS ENTREPRENEURSHIP
Media accounts of successful entrepreneurs
Change in “employment contract”
Desire for an independent lifestyle
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13. FOUNDATIONS IN OTHER DISCIPLINES
(1) the economic, technological, and social conditions from which opportunities rise,
(2) the entrepreneurs who recognize these opportunities
(3) the business techniques and legal structures they use to develop them, and
(4) and the economic and social effects produced by such development.
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14. FOUNDATIONS IN OTHER DISCIPLINES
Economics
behavioural science
Psychology, cognitive science
Sociology
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15. MACRO AND MICRO PERSPECTIVES
behaviour and thoughts of individuals or groups
Macro Perspective
Environmental factors
Economic, financial, political
Both are key in understanding the entrepreneurial process
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16. A CONFLUENCE OF FACTORS
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THE PROCESS
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VARIABLES
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19. THE ESSENCE OF ENTREPRENEURSHIP
The intersection of valuable opportunities and enterprising individuals is the essence of entrepreneurship.
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“There are three principal means of acquiring knowledge: observation, reflection and experimentation. Observation collects facts; reflection combines them; experimentation verifies the result of that combination…”
--Diderot
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21. SYSTEMATIC OBSERVATION
Observe aspects of the world systematically
Generate and test hypothesis
Use this information as a basis for conclusions
Doesn’t resolve question of causation
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EXPERIMENTATION
Determines Causation
Systematically changes one variable in order to see if changes affect one or more other variables
Involves active intervention
Difficult to use in the study of entrepreneurship
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REFLECTION
Combining facts in a careful and systematic way to reach conclusions
Central to case method and other qualitative methods of research
Qualitative Method
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THEORY
Moves beyond efforts to merely describe phenomena
Moves to the point at which we can explain why and how things happen as they do
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DEVELOPING A THEORY
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TWO FINAL POINTS
Theories are never proven in any final, ultimate sense
Research should never be undertaken to prove or verify a theory
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“’Tis a sort of duty to be rich, that it may be in one’s power to do good…”
--Lady Mary Montagu
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TO DO GOOD
Entrepreneur’s products and services improve the lives of countless millions of persons
Entrepreneurs are often extremely generous in their donations to worthy causes
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