Please enable JavaScript.

Coggle requires JavaScript to display documents.

Entrepreneurship (Rediscovering Profitability in Entrepreneurship (This…

- - - - 1) Network externalities: when a large number of consumers use a product, it becomes relatively cheaper for them or for new customers to consume that product instead of one of the competitors. For the firm the cost of acquiring new customers decreases, therefore improving the profit margin. Similarly, existing customers will be retained for a longer duration, due to perceived higher switching cost. 2) First-mover-advantage: The concept of first-mover-advantage (hereafter FMA) also builds on the idea of early growth leading to an increase in profits . The underlying assumption of FMA leading to profits is that being first and achieving early market acceptance will promote proprietary learning effects, patents, preemption of input factors, and the development of switching costs. 4) Growth and profitability among Finnish high-technology firms: used EBIT-to-sales ratio (EBIT). EBIT was preferred over ROA because lifescience firms rarely require substantial assets. In addition, EBIT is mostly preferred by practitioners themselves
      - 5) Experience curve: The basic assumption of the experience cost curve is that for each increase in output the unit costs will decrease. Therefore, the business with the highest output will be able to produce with the lowest unit cost, leading to cost leadership. The firm with cost leadership will thereby enjoy the highest profit margins. 6) Economies of scale: A necessity to grow, despite the consequences, has even influenced entire economies. an economy of scale – achieved by growth – is a means of increasing the competitive advantage of a nation. In this belief, economic growth.The extraordinary growth rate scaused impression, as well as fear and envy, among the leaders and policy makers in Western economies.
    - - The smallest, and at the same time the most heterogeneous, of the sampling units is the individual. Entrepreneurship research is becoming increasingly more depersonalized, which is something that has also happened in economics research. This view considers growth simply as a dependent variable, an outcome, and then uses a number of independent variables to explain this dependent variable. Growth is a multidimensional concept, which can be conceptualized in a number of ways. Understanding this requires a closer look at some of the studies focusing on growth. Growth is most commonly associated with performance, which is further seen as being equal to success. "Although knowledge accumulation is dependent upon relationships among constructs being robust across different measurement and sampling decisions, scholars have not sufficiently established such robustness for the construct of firm growth".
- - - - the relatively rapid dissemination of social enterprise and social business as terms associated with the use of social media highlights the value of a familiar semantic anchor. What made the social enterprise model seem so naturally universal was that it expressed an insight that had been associated with the concept back at its beginnings, as a way of referring to the corporation as a legal form. When people join together in a group that has a shared identity, they are not just using a social medium to get business done. They have become a part of something that is greater than themselves. The newer version emerging out of Web 2.0, which sees social enterprise as people using online social media to communicate more effectively within a venture, sees organizational technology as fundamentally a neutral tool. How social enterprise provides a medium for defining individual and corporate identity, and how this relates to the existing nonprofit and for-profit forms that, in practice, anchor them in working life.
      - In the mythologyof social entrepreneurship, a so-called traditional nonprofit leaves individuals in a mundane position where they do not create—they just accept what they are given; wash, rinse, and repeat. By contrast, social entrepreneurs create an identity where they can do well by doing good. Couched in imported business buzzwords this can at times ring false, but it is ethical in the fullest sense of the word.
  - - - 1) principles were ideas that because of their nature rarely if ever changed. 2) Models were what we built to emulate principles. 3) Rules were those things we put in place to maintain the model and guide behaviors. 4) Behaviors were what we did to live the principles, based on the models we built and the rules that governed them. In order for social entrepreneurs to create successful and lasting deliberate disruptive designs, it is imperative to make sure that any new understanding of how the system can work affects not only the principles that govern that understanding—the mission and calling to action that propel many social entrepreneurs—but also the models, rules, and behaviors put in place to turn those ideas into action.
    - - When emergence happens, and we realize that things are not the same as we had previously thought, we are, in essence, changing our understanding of our system and the models we have devised to describe that system
        
        Step 1: Adjusting our models on the basis of the new understanding that has emerged. Step 2: Adjusting our relationships, our behavior, and rules according to our new understanding of our model. Step 3: When we do this something new emerges, because something diff erent always happens whenever there is an interaction between our models and behaviors—once we have taken the fi rst two steps. Step 4: Returning to step 1—going back and readjusting our models on the basis of this new emergence. Step 5: Returning to step 2—adjusting our relationships on the basis of our new model. Step 6: Returning to step 3—emergence happens within the interaction. Step 7: Returning to step 1—we return to our models, adjusting them according to our new understanding. Step 8: Returning to step 2—we adjust our relationships again. Step 9: Returning to step 3—emergence happens. Step 10: Returning to step 1—the process continues
  - - - In the life of social enterprises, there are times when the founder or the investors decide that they want to exchange some or all of their ownership in the company for cash or something else of value. These are commonly referred to as “exit” events.
    - - Nondisclosures agreements (NDA) may prevent them from pursuing a similar business opportunity with someone else if they don’t make a deal with you. Trademarks protect names and logos (or anything that uniquely identifies the supplier of goods or services) from anyone that wants to use a confusingly similar mark to identify themselves as the provider of similar goods or services. Copyright, by contrast, grants “authors” a bundle of exclusive rights with respect to their work. These rights include the right to reproduce, distribute, perform, publicly display, or create derivative works based on the original work. A patent is a right to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted. Licensing Ip: Intellectual property licenses take many different forms, but typically they consist of a contract or agreement by which the owner of the property grants to someone else the right to use it, subject to appropriate restrictions, in exchange for a royalty.
    - - Equity compensation occurs when someone is given stock (or the option to buy stock) in a company in exchange for services. Typically, equity compensation is used to provide incentives for employees to join a company or work for less money in exchange for a chance to participate in the profits of the company if it is successful. Another way to give employees an ownership interest in a company is by creating an “employee stock ownership plan” (ESOP). An ESOP is a plan that grants all employees of a company an interest in the company, typically based on their length of service, as a way to reward loyalty and recognize the employee’s collective contributions to the company’s success.
    - - Although social enterprises take many forms, from a legal point of view, there are basically five options.
        
        a nonprofit corporation does not issue shares and has no “owners.” It is formed for a purpose other than making money (i.e., a social mission), and the directors and managers have an affirmative duty to pursue that social mission for the benefit of the corporations members or the general public.
        
        Partnerships offer the greatest flexibility of all the legal forms. From a legal point of view, partnerships are largely unregulated, and partners can agree among themselves to almost any structure or arrangement.
        
        “S” corporations are similar to C corporations, except that they don’t pay taxes on their net income. Profits are allocated to the shareholders and taxed as ordinary income (usually at a higher rate than investment income). An S corporation can have only one class of shares, and shareholders must be natural persons; corporations and partnerships cannot own shares in an S corporation.
        
        A limited liability company (LLC) is not a corporation, although it has some similar features, including limited liability. But unlike a corporation, which has a fairly rigid structure and has to live within carefully defined rules and boundaries, an LLC has a more flexible structure and its members can agree among themselves to run the LLC in a manner that suits their own purposes.
        
        “C” corporations are the most common form of business in the United States. Formed primarily to generate profits for their owners, C corporations pay tax on their net income and then pass profits through to the shareholders in the form of dividends, which are taxed as investment income
  - - - First is MOA. If we expect someone to act, they need to be “motivated.” But, as private sector marketers are well aware, if they do not have the “opportunity” (a nearby store or easily accessible website), they can’t act.
      - The second concept “stages of change.” That is, the latter tend to see the behavior challenge as getting someone not doing something desirable to do it. But our own experience tells us, new behaviors—especially challenging ones—take time. The “stages” idea is really a segmentation approach suggesting that some target audiences will be in “precontemplation”
      - BCOS
        
        Benefits: It is important to understand what the target audience sees— or might see—as the benefi ts of the action you are advocating
        
        Costs: Unfortunately too many social marketers take audience reluctance as a reason to hammer away at the benefi ts again and again. But commercial marketers know that if a product is seen as hard to use, maybe the answer is trying to motivate and teach the customer to try harder—but change the product!
        
        Others: People oft en do not act—no matter what they think—because others don’t want them to. Th is is a signifi cant problem in the developing world where “western” innovations in health or schooling or commerce are introduced.
        
        Self-efficacy: This awkwardly labeled term simply highlights the O and A factors noted earlier in the chapter. Does the target audience feel that they have the opportunity and ability to act—not whether you think they do!
  - - - This creates the conditions for a marketplace to match organizations entrepreneurs, and investors all seeking a similar outcome—a better world expressed by quantified realizations of impact. organizations, a HIP Scorecard spurs this competition defined as the core that quantifies “doing more good” as well as the detailed financials focused on “making more money.” that the invisible values of life, previously unmeasured by experts, can be quantified into a metric; this summary score can translate into a competitive position and drive human action toward a common goal
  - - - dynamical change happens when humans are involved in a change process because human systems are always open, high dimension, and nonlinear. Static change assumes that a system is at rest before a change effort begins, that the change effort moves the system to a new place, and then it remains still again until it is disturbed by the next external force. Dynamic change is the name we give to change that is more complex, but still predictable. Dynamic change assumes that once you start a change effort, it will continue in a predictable sequence to a predictable end.
      - Participative evaluation . When change agents participate in the evaluation process, they are likely to capture the dynamical nature of the change, regardless of the kinds of data or approaches to data collection, analysis, and reporting. Participation
      - Storytelling. Stories can capture the open, multidimensional, massivelyentangled patterns of dynamical change. Evaluation methods havebeen developed to capture and assess stories as evidence of change incomplex and emergent systems.
      - Adaptive action. In HSD we use a simple learning model to support engagement in complex and dynamical change. It is called “adaptive action,” and includes three key questions: What? So what? Now what?
      - Complexity science models and methods. Though the uses are not widespread or well documented, scholars and practitioners are beginning to draw ideas and methodologies directly from the complexity sciences.
- - - - “Entrepreneurial Inception: The Role of Imprinting in Entrepreneurial Action.” Using semi-structured interviews and archival analysis, These formative elements of the external environment, the authors argue, serve as sources of a “lasting and persistent stamp on entrepreneurs” that influence their future ability to recognize entrepreneurial opportunities.in this issue identify a range of recurrent sources of imprinting, including influential people (family, friends), practices (work experiences, hobbies, exposure to technology) and temporal phases of life
      - A second paper that also uses the concept of imprinting appears in the paper titled “Entrepreneurial Legacy: Toward a Theory of How Some Family Firms Nurture Trans-generational Entrepreneurship” Seeking to understand how these family firms have endured for so long, the authors determine that the families' ability to systemically embed the entrepreneurial values and spirit of the founder onto at least onemember of each successive generation is the key to success.
      - The third study that reinforces a “realist” ontology of entrepreneurial opportunity is titled “Embedded Entrepreneurship in the Creative Reconstruction of Place.” In this ethnographic study of two depleted communities in Northern Ireland, the authors focus on understanding how individuals who are highly embedded in their local context identify entrepreneurial opportunities.
      - The final paper in this group is, “How Should We Divide the Pie? Equity Distribution and Its Impact on Entrepreneurial Teams”. The study finds that the perceptions of justice amongst team members at the.initial stages of equity division have a profound imprinting effect on the long-run success of the entrepreneurial venture.
      - Collectively these four papers adopt the assumption that opportunities exist in the environment external to the entrepreneur.
    - - paper titled “Opportunities and Institution: A Co-creation Story of the King Crab Industry”. Using primarily archival/historical research methods of a single case study,
      - paper titled “Emotional Arousal and Entrepreneurial Outcomes: Combining Qualitative Methods to Elaborate Theory.” The authors study acts of entrepreneurship in the super yacht industry and seek to understand the role of emotion and dramaturgy in acts of entrepreneurship.
      - “Failed but Not Finished: A Narrative Approach to Understanding Venture Failure Stigmatization.” This paper is unique in that does not address entrepreneurial success but rather tries to understand howentrepreneurs dealwith failure.
      - paper titled “Institutional Entrepreneur's Social Mobility in Organizational Fields” also adopts the perspective that successful entrepreneurs create rather than discover opportunity
      - “The Evolution of Interorganizational Relationships in Emerging Ventures: An Ethnographic Study within the New Product Development Process.” , the authors conclude that entrepreneurial success is the result of the degree of attentiveness of entrepreneurial firmsin constructing interorganizational networks.
    - - Environment: One clear conclusion fromthis point of distinction is the proposition that the discovery thesis of entrepreneurial opportunity contains an inherent assumption that the external environment is both distinct fromandmore agentic than the entrepreneur. By contrast, in the creation thesis, the boundary between entrepreneur and environment is less distinct and the degree of agency between entrepreneur and environment is more evenly distributed.
      - Time: another proposition that we can draw from our studies is that the discovery thesis of entrepreneurial opportunity contains within it a distinct set of assumptions about the role and influence of time. In these studies time is seen as having an isolated episodic influence that creates path dependency in which critical incidents bear enduring effect that constrains or enables the ability to identify opportunity. From the creation perspective, by contrast, time is iterative, rather than a determinative influence, in which the entrepreneur's ongoing interaction with the environment creates mutual and simultaneous changes in both the entrepreneur and the environment that, over time, constructs opportunity.
      - Epistemological emphasis: A third proposition that we draw from the articles, thus, is the observation that entrepreneurial imprinting focuses our attention on concrete practices and objective experiences that are highly influential in explainingwhy and howindividual differences in the ability to recognize entrepreneurial opportunity arise. The clear emphasis is on practices and behaviors rather than perceptions and interpretations of those practices and behaviors. By contrast, the construct of entrepreneurial reflexivity draws our attention to the subjective and interpretive inner world of the entrepreneur as a key mechanismbywhich entrepreneurs can elevate their imagination beyond the institutionalized constraints of the existing environment and conceive of alternative social, economic and political arrangements.
      - Levels of analysis: other, the constructs of reflexivity and imprinting simply reflect differences in the observational perspective of the researcher. That is, researchers who focus on micro-level approaches to entrepreneurship, at the level of the group or the individual, are somewhat pre-disposed to focusing on somewhat objective and deterministic elements of the entrepreneurial process. In other words, looking “up” from the point of view of the individual or the team, the external world appears to be much more objective, powerful and agentic.
    - - This article, thus, explores howqualitativemethods might be used to generate a theory for examining entrepreneurial settings. The first theme is the unique role of imprinting, or the profound influence of social and historical context in constraining the perceptual apparatus of entrepreneurs and delimiting the range of opportunities for innovationavailable to them. Second, our analysis offers insight into the counterbalancing role of reflexivity, operating at both individual and collective levels of analysis, in generating the ability of entrepreneurs to overcome the constraints of imprinting.imprinting and reflexivity as key mechanisms and core constructs that underpin the larger tensions that question whether entrepreneurs discover opportunity or create it.
- - - - The identification of an unfulfilled social need and the resulting social innovation are the product not only of the abilities of its founder but also of the embeddedness into a specific environmental and institutional context
    - - Unlike their business counterpart, social entrepreneurs insist on a different field of action: they pioneer innovation within the social sector starting from their personal sensitivity towards what they perceive as a social problem. As a consequence, sensitivity commits social entrepreneurs not only to the mission, but also to the symbol of that mission, in such a way that, in the end, it is impossible to distinguish the organization from the entrepreneur
      - three key elements: Innovation, Entrepreneurial orientation, social change
  - - - 9a: The better the entrepreneur at articulating social motives, innovativeness and need for achievement in a concrete vision of the future, the easier the evaluation of the social and economic feasibility of the project.
      - 9b: The better the entrepreneur at articulating social motives, innovativeness and need for achievement in a concrete vision of the future, the easier the formalization of the entrepreneurial project into a distinctive mission and a set of core operating principles.
  - - - First, consistent with the research on entrepreneurial processes , the clarification of the milestones of the entrepreneurial project is critically important to resource mobilization. Second, formalization of the core principles and values underlying the opportunity is a way to create legitimacy. An SE process often occurs in unexplored settings or emerging fields where social disequilibria coexist with unfulfilled social needs.