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IIDS Lect 1_ Part 2: Ch2 & 6 (NOT 2.2) (Organizational theorist:…
IIDS Lect 1_ Part 2: Ch2 & 6 (NOT 2.2)
Desirability and feasibility
Gap between preference for entrepreneurship (desirability) and actual status
Preferences not always turned into actions: feasibility also matters
Entrepreneur's story:
Richard Branson slide 16-20/59
Arbitrage
Arbitrage central to economist approach:
take advantage of price difference
(e.g., Virgin Mail Order Records)
Profitable opportunities
:
Not everyone may be aware of an
opportunity
Even if aware, one may decide not to pursue an opportunity
Pursuing an opportunity
Decision to pursue an opportunity may depend on:
Costs
(e.g., transportation costs, storage costs, opportunity costs (alternatives))
Individual attitudes or traits
(e.g., risk attitude, judgements)
Organizational theorist: Process view
Process: how new organizations are created (e.g., what entrepreneurial characteristics, activities and decisions play a role)
Also interested in outcomes, but in particular in how these are reached (“the road
to entrepreneurship”)
Entrepreneurship as the process of creating new organizations
slide 24-28 + video
Both views: innovation linked to entrepreneurship
Economist (Schumpeter)
Innovation as outcome
: The doing of new things or doing things in a new way
Organizational theorist (Drucker)
Innovation as process
: What it takes to innovate (e.g.,leadership, market-focus, entrepreneurial management)
Entrepreurial traits
In both approaches attention for entrepreneurial traits / special qualities but their role differs:
Economist
: interested in traits / special qualities that affect expected utility
Organizational theorist
: interested in traits and cognitive concepts (self-efficacy, intrinsic motivation, intentionality) that facilitate new venture creation