ENTREPRENEURSHIP THEORY REVISITED : A FRAMEWORK FOR DESIGN OF ENTREPRENEURIAL STRATEGIES Prof

Creativity and strategic entrepreneurship have become integral to the managerial landscape significantly influencing managerial thought, corporate strategy and policy. Scholars of differing disciplinary persuasion have enriched this field with diversity of theoretical frameworks and concepts but it has also led to fragmented thinking. As a consequence while entrepreneurship, as a concept, has been integrated with the traditional management literature, it has yet to develop a conceptual framework and the synthetic unity is missing. Traditional technological trajectories have reached a dead end and radical innovations are necessary to sustain global economic growth. It is only of recent that researchers have become engaged with the emerging reality of technological disruption and need for radical innovations. This paper reviews economic and social policy that has guided development of entrepreneurship thought and adopts an ontological approach to present a dynamic model of entrepreneurial strategies. The model is built around “entrepreneur intending” and strategies evolve in the process of exploration and discovery of opportunities. We argue that entrepreneurial strategies are influenced by entrepreneur’s personal philosophy, intellectual capabilities, procedural rationality, achievement motive and the social context. INTRODUCTION Entrepreneurship is a relatively new discipline yet to describe its boundary. Over the decades it has gone through various conceptualizations as, opportunity seeking, risk taking, new venture creation, and more recently it is discovering and creating opportunities. Approached from various disciplinary and ideological perspectives there are constant attempts to redefine boundaries, which has introduced fuzziness in conceptualization (Amit, et al. 1993; Blatt, 1988; Bygrave & Hofer, 1991; Herbert &Link, 1989; Zahra & Dess 2001). Definitions abound but “intention to start a business” (Bird, 1988; Krueger & Brazeal, 1994) remains at the core of most definitions and it is commonly agreed that, (a) entrepreneurs form new ventures (Vesper, 1990), and that entrepreneurship is crucial for economic development since (b) this “dynamic process” of new firm formation creates jobs and distributes wealth (Kirchoff, 1994). Scholars agree that a major limitation of these definitions is that they fail to capture the entrepreneurial process in its entirety (Bull & Willard, 1993; Covin & Slevin, 1991; Hitt, et.al. 2001; Low & MacMillan, 1988; MacMillan & Katz, 1992; Shane & Venkataraman, 2000; Slevin & Covin, 1990; Wortman, 1987). Shane & Venkataraman (2000, p.14) suggest that instead of asking: “What is entrepreneurship? ” it may be more fruitful to ask “why, when and how some people and not others discover and exploit opportunities. ” Multiple frameworks enrich our understanding and should be encouraged but as Churchman (1971, p. 110) points out, “logic of induction” requires an agreement among the community of empiricist about a priori framework. When the definitions of “entrepreneur” differ it is difficult to develop a shared conceptualization. During recent years there has been tremendous outpouring of research on entrepreneurial opportunities, how they can be created and exploited (Dew, et al. 2004; Zhou, 2008). Search for opportunity is innate to all living forms as they struggle to survive, select mates and procreate. What differentiates humans from other species is that we have developed highly advanced capabilities not only to discover opportunities but also to develop and imagine opportunities. Therefore, why some people discover opportunities while others create opportunities is not only relevant but highly germane to our enquiry and understanding of entrepreneurship, value creation and economic development. A major problem in entrepreneurship research is that entrepreneurship theory has attempted to homogenize “entrepreneurs” and empirical findings have been unable to uncover commonalities to justify this homogenized concept (see, Alvarez & Barney, 2007). The problem is not only that of differentiating entrepreneurs from nonentrepreneurs (Hartman, 1959; Garland, et al., 1984) but differentiating between the different types of entrepreneurs. In this paper we refocus on the entrepreneur as an individual. We analyze entrepreneurial behavior in the context of entrepreneur’s abilities, personal philosophy and orientation toward autonomy-interdependence and develop a classification system to better explain how opportunities are discovered, developed and imagined, by whom and why. We believe that the there are significant differences between the various types of entrepreneurs which have remained unexplored and research in entrepreneurship as well as public policy will benefit greatly if the entrepreneurial phenomena is disentangled. Entrepreneurship is a multi-dimensional concept and simplification has only led to obfuscation and confusion. This paper explores the definitions of entrepreneurship, the incongruities and confusion in the entrepreneurship literature and presents a typology implicit in the scholarly work till date (Alvarez & Barney, 2007; Blawatt, 1998). First section presents an introduction to entrepreneurship theory as it has evolved and highlights the critical differences in conceptualization of the entrepreneur. Second section discusses entrepreneurial motives in brief. Third section discusses in detail the concepts that have shaped theory and why some of the assumptions are of questionable validity. We argue that entrepreneurial strategies emerge in course of entrepreneurial action shaped by entrepreneur’s intellectual capabilities (skills, knowledge, cognitive and perceptual abilities), personal philosophy, procedural rationality, achievement motive and the social context. In the final section we discuss some of the current issues in corporate innovation in the context of entrepreneurial strategies. ENTREPRENEURSHIP– THE STORY THUS FAR Neo-classical economic theory assumes that markets are perfectly competitive, information is easily accessible, knowledge is freely available, and economic agents are rational actors who respond to dis-eqlibriating forces to bring it back into equilibrium. However, a clear description of an entrepreneur remains elusive (Baumol, 1993). Definitions abound; he is an economic decision maker who is alert to exchange opportunities with profit potential and is the first to act (Kirzner, 1973), the initiator of an enterprise thus differentiated from an agent (or manager), an arbitrager who takes advantage of the profit opportunities created by information asymmetries and brings about changes in prices and quantities (Hayek, 1949). Hence, in neoclassical as well as the Austrian economic tradition (represented by economists, such as, Menger, Hayek, Mises and Kirzner), in a dis-equilibriated system entrepreneur is the seeker of imbalances in the economy, alert in identifying profitmaking opportunities, acts on these opportunities and as a consequence entrepreneur restores equilibrium to the market and creates order. Inertia is an inherent quality of physical as well as social and economic systems. Hence the question that has intrigued scholars is what drives entrepreneurs to act? Mises (1996: 290-91) observes that entrepreneurs, “are driven solely by the selfish interest in making profits and in acquiring wealth”, and “the only source from which an entrepreneur’s profit stem is his ability to anticipate better than other people the future demand of consumers”. There are three distinct elements in this conceptualization of entrepreneurial action. First, entrepreneur’s desire for wealth drives them to search for profitable exchange opportunities. Entrepreneurship theory ascribes entrepreneurial action to profit motive, “material accomplishment” as Weber termed it (Max Weber in Gerth & Mills, 1946) and a significant body of entrepreneurship literature builds on this theme that, “Entrepreneurs operate their business purely with a view to maximizing profit they obtain from a given amount of effort” (Casson, 1982, p. 25). The thesis that the desire for profits motivates entrepreneurs, which in turn drives economic growth, is well entrenched in the capitalist philosophy. If entrepreneur are those who “discover opportunities” the “opportunity” continues to be defined in terms of profit potential (Harper 1999, p. 82; Shane & Venketaraman, 2000, 2001). In fact Singh (2001) makes a pointed reference to this issue, and asks if it is to be assumed that the opportunity was a “feasible, profit seeking, potential venture” in cases where empirical evidence is to the contrary (as may be the case with social entrepreneurs). Second, there is general agreement that entrepreneurs are a class of people who have highly developed intuitive abilities and are alert to information asymmetries in the external environment. Market uncertainty requires individuals to act based on incomplete information rather than knowledge (Knight, [1921] 1971: 268) and where uncertainty prevails entrepreneurs have an advantage over managers since they are more inclined to “taking judgmental decisions about coordination of resources” (Casson, 1982: 19-20). In the face of competitive threats, “prediction and control are key elements in entrepreneurial success” (Casson, 1982: 124) and entrepreneurial profit depends on bargaining position and approach to information management. Faced with competitive threats successful entrepreneurs are good at managing the interpersonal contexts for exploiting or commercializing opportunity (Blawatt, 1998; Vesper, 1990). Third, entrepreneur sets up a new venture (Gibb, 2000 p.2; Knight, 1921; Say, 1964; Timmons, 1994). Entrepreneur’s insight and the first-mover advantage can create monopoly rents or entrepreneurial profits; but they disappear when imitators appear on the market. More intense the competition and smaller the window of opportunity less likely that the entrepreneu