Entrepreneurial Action: Volume 14

In each of these definitions entrepreneurship occurs when an action takes place. And yet, the tendency in the field as a whole is to study entities – typically people or firms – instead of the actions or processes of entrepreneurship itself. Often the entrepreneurial act is used to define the group to be studied, with the study typically being of the individual or firm-level factors leading to the action. The action itself often gets significantly less attention.

This chapter outlines a general framework for studying the entrepreneurial method. Simply put, what the scientific method has afforded us in terms of understanding the actual world we live in, the entrepreneurial method enables us in terms of making new ones. At least one key ingredient of the entrepreneurial method for worldmaking consists in the logic of effectuation identified through a decade long research program into the elements of entrepreneurial expertise. More specifically, given a world imbued with true uncertainty, the framework outlined here urges us to develop research streams focused on choosing between Type I and Type II errors in addition to ways of avoiding them altogether or finding the perfect Goldilocks balance between them.

Our research investigates how state-sponsored social protection is associated with undertaking the initial steps to start businesses in knowledge-intensive sectors. We define social protection as policies to protect individuals against economic risk. Although research generally shows a negative link between coordinated market economies and business creation, we highlight conditions when social protection may actually have positive consequences on entrepreneurial action. Specifically, these policies can encourage individuals to develop specific skills, which can be used by those who start businesses to pursue opportunities in knowledge-intensive sectors. Findings from a cross-national sample of individuals starting businesses in 16 advanced industrialized countries are consistent with this claim. We also find that educational attainment moderates this positive direct relationship. Our study is one of the first that provides new explanations for how welfare states can actually promote certain types of entrepreneurial action in highly coordinated economies by orienting their economic activity toward a system of highly skilled and productive labor.

We extend the literature on scientific discovery and commercialization by examining entrepreneurial action by university-based scientists. Specifically, we investigate the decision process and the paths to commercialize academic technologies. University-based technology transfer involves multiple stakeholders with competing interests; hence, we believe researchers should apply a multilevel theoretical lens, which starts with the disclosure of discoveries made by scientists in their labs. We build a multilevel framework that views the scientists’ choice to first disclose viable discoveries to pursue entrepreneurial action as a function of three factors: (i) a scientist's rent orientation, (ii) a university's rent doctrine, and (iii) the rent doctrine of the scientific field in which the scientist conducts research. We suggest that commercial disclosure most often occurs when there is alignment between these three factors. Lastly, we advance an agenda for future empirical research by developing specific propositions about the key constructs and relationships concerning university-based entrepreneurial action.

In this study we focus on how conditions of uncertainty shape the entrepreneurial action that underlies opportunity creation. We utilize the basic structure of economic exchange in the context of opportunity creation theory to further investigate the conditions under which an entrepreneur might be expected to act to bring an opportunity into existence. Specifically, we suggest that uncertainty, that is manifest as relational uncertainty and resource uncertainty, shapes the entrepreneurial actions that underlie the creation of opportunities. In a laboratory experiment we test this hypothesis by observing 56 three-person groups engaged in an opportunity creation-focused exchange task. The results of the experiment support the hypothesis that variability in the conditions of uncertainty (relational uncertainty and resource uncertainty) affects the entrepreneurial action that results in opportunity creation. These results lead us then to propose that there exists a theoretically specifiable set of key entrepreneurial actions (one that is others-focused and another that is works-focused). From this analysis we suggest potential directions for future research in the areas of entrepreneurial action and opportunity creation.

Despite the growing importance of young, entrepreneurial ventures in modern economic systems, many such ventures fail quite early in their lifecycles. While both evolutionary theory and organizational learning theory yield important insights for the literature on young venture survival, questions remain as to why ventures facing similar environments experience differential rates of survival. In response, I propose a theory of entrepreneurial agency – defined as the emergence and/or transformation of firms, markets, industries governed by the evolving interaction of temporally situated, intentional strategic action with a malleable external environment – to complement prevailing viewpoints on the causes of young venture survival. My central thesis in this chapter is that to develop more comprehensive explanations of differential survival rates, a theory of entrepreneurial agency – illuminating the transformative potential of entrepreneurial action – is necessary to complement evolutionary perspectives in the literature on firm survival. With this objective in mind, I construct a theoretical model linking diverse perspectives on the duality of human agency and theories of environmental selection, and offer several theoretical and empirical suggestions to guide future research.

This study examined the effect that venture creation action has on the outcomes of nascent entrepreneurship. A conceptual model was developed which proposes action as a fundamental mechanism in venture creation. Thus, action should rightly be considered as a means which transmits the effects of venture resource endowments on to venture creation outcomes. This conceptual model was empirically supported in a random sample of nascent ventures. Ventures with higher levels of human or social capital were found to be more active in venture creation. In turn, more active venture attempts were more likely to achieve improved venture creation outcomes. Further, human and social capital, on their own, exhibit little direct influence on the venture outcomes achieved. These findings confirm action's central place in the venture creation process.

Studies of entrepreneurial action often distinguish between different phases such as opportunity identification, evaluation, and exploitation. Yet, the richness of past contributions masks the absence of an integral framework to organize, in a theoretically consistent ensemble, the different kinds of cognitive processes that underpin entrepreneurial action. In this chapter, we draw from research on human action and cognition to offer an integrative model of the cognitive processes that foster entrepreneurial action. By presenting a more specific articulation of when, how, and why different cognitive processes operate, we provide theorists and empiricists with a more complete picture of how entrepreneurs’ thinking evolves from the emergence of an opportunity idea to the initiation of concrete entrepreneurial acts. In addition, our framework draws attention to cognitive inflection points that entrepreneurs must navigate in their journey toward entrepreneurship. By explicitly locating these inflection points and specifying the changes in mental processing that occurs at each point, we highlight that for entrepreneurial action to ensue, entrepreneurs must shift from one type of cognitive processing to another. Along this line, our model draws attention to the entire set of cognitive “skills” entrepreneurs must master for successful completion of each phase and successful transitions between phases.

This chapter highlights an overemphasis and persistent bias in entrepreneurship pedagogy toward predictive logic that results in unidimensional instruction. In contrast, we explore how to teach a creative logic for entrepreneurial action. We argue that a more realistic and complete approach to teaching and pedagogy should include a creative logic that will augment existing methods focused on students’ research and analysis and balance these with taking explicit entrepreneurial action. Building upon social capital, networking, learning and real options theories, the chapter uses case studies and provides in-class exercises to illustrate our perspective and help researchers and instructors alike.

This chapter describes part of the philosophical and psychological context for the study of entrepreneurial action. Unlike some other human behaviors, entrepreneurial action is typically extended through time, bringing it into the realm of personal causality. When intention, motivation, and environmental properties are all considered, one is led to the metatheoretical assumptions that (a) human beings are capable of conscious thought, (b) they are capable of intentional action, and (c) effort exerted in the direction of an intention can lead to an “equifinal” outcome regardless of starting point or obstacles that may appear along the way. Entrepreneurship research should more explicitly take note of these traditions to ensure that the measures selected incorporate the multiple antecedents of entrepreneurial action. This chapter has four primary objectives: to outline the precursors of intentional action of any sort, to touch on the specifics of entrepreneurial intention, to ameliorate a bit of our concern over self-report measures, and to describe methodological alternatives that might have promise for the future.