Explaining Entrepreneurial Success: A Conceptual Model

ABSTRACT Explaining entrepreneurial success has long remained a contentious issue. Failures on this front have been attributed to extra emphasis on individual or environment and plethora of constructs. The paper proposes new constructs that are parsimonious and holistic in nature. These constructs are cognitive complexity, threat to identity, status inconsistency. The constructs assume that entrepreneurship is consequence of interaction between individual and environment. INTRODUCTION Despite considerable work in the field of entrepreneurship, efforts to arrive at explanation and theory of entrepreneurial success have not produced desired results (Phan, 2004; Wortman, 1987; Shane and Venkataraman, 2000). The Inability of scholars to arrive at distinct theory is attributed to a number of factors that include disagreement on definition of entrepreneurship, (By grave and Hofer, 1991; Brazeal et al, 1999; Gartner, 1989), inability to look beyond their disciplines (Hornaday et al, 1987), inability to apply multilevel analysis and new constructs (Phan, 2004), development and measurement of constructs used (Smith et al., 1989; Vanderwerf and Brush, 1989), lack of dynamism in theories (Bygrave and Hofer, 1991) and lack of parsimony in model development (Phan, 2004). If a distinct theory of entrepreneurship is to developed, field has to pay attention to interactions among cognition, organization and industry level analysis. Further, analysis at every level should be connected to provide holistic picture. This is obviously a tall order to achieve (Phan 2004). This paper aims to build a conceptual framework which explains entrepreneurial process using psycho-social processes. It attempts to answer some of the above mentioned problems, by using new concepts like cognitive complexity, threat to identity and status inconsistency. The framework presented in this paper is based on psychological and sociological theories of information processing and emotions as basis for describing enterprise creation. It assumes that information creation and management along with emotions are the heart of entrepreneurial decision-making. The paper first defines entrepreneurship and its implication for explaining the process. It then presents concepts that would be used to build the model. Towards the end, the paper describes the conceptual framework, which explains entrepreneurial process and why model claims acceptability. ENTREPRENEURSHIP: DEFINITIONAL AND METHODOLOGICAL PROBLEMS A good science has to begin with a good definition (Bygrave and Hofer, 1991). If the field of entrepreneurship is to claim scientific accreditations, there has to be sharp and unanimous definitions. But sadly, there is no consensus on definition of entrepreneurship (Bruyat and Julien, 2001; Lumpkin and Dess, 1996). The number of definitions is almost equal to the number of scholars. Another problem with development of distinct theory of entrepreneurship is lack of reliability and validity of constructs developed to measure a phenomenon (Smith et al, 1998). This makes measurement of different constructs, developed in entrepreneurship, inconsistent. It renders comparison across different works difficult and in some cases even futile, hindering progress of research inquiry (Brazeal, 1999). Given multiplicity of definitions, the author concurs with Misra and Kumar (2000) that there is no point in proposing another definition. However, without definition, research inquiry becomes difficult. For this very reason, the author adopted a definition from the existing literature. The Definition adopted is: "Entrepreneurship is the process that involves innovative action towards organization creation" The definition has elements of Gartner's (1988) definition which say's that entrepreneurship involves organizational creation and Drucker's (1985) definitions which say's entrepreneurship involves innovation. The definition is close though not same as Shumpeterian (Schumpeter, 2000) notion of "Creative Destruction". …