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The “innovator's dilemma” suggests that by listening to current customers leading firms often lose their markets to upstart newcomers as a result. The purpose of this…
The “innovator's dilemma” suggests that by listening to current customers leading firms often lose their markets to upstart newcomers as a result. The purpose of this paper is to understand how entrepreneurs successfully create such upstart firms and new markets, since this ought to have direct implications for theorizing about the innovator's dilemma.
The paper examines implications of recent studies in entrepreneurial expertise that show expert entrepreneurs use an effectual logic of non‐predictive control. It then connects these ideas to notions of firms and markets as artifacts of entrepreneurial action. Finally, it describes the implications of these concepts for the innovation strategies of large corporations, and specifically for firms periodically facing the innovator's dilemma.
The findings suggest that the practical answer to the innovator's dilemma is not to predict technology trajectories more accurately, or otherwise strive to build immortal firms in mortal markets. Instead, innovation managers should focus on building new markets. This will inevitably involve pluralizing decision‐making technologies by including some aspects of effectual decision making (used by expert entrepreneurs) into the decision‐making processes of large firms.
It is the basic contention of this paper that the innovator's dilemma is not the story it is usually portrayed as, i.e. technology commercialization. Instead, the core issue is investing in and building new markets. The paper brings a novel theoretical framework (from entrepreneurship) to bear on this problem.
Entrepreneurship education has had a remarkable evolution over time and the number of entrepreneurship textbooks has multiplied given the increased interest in…
Entrepreneurship education has had a remarkable evolution over time and the number of entrepreneurship textbooks has multiplied given the increased interest in entrepreneurship programs in higher education. Yet, studies that review the coverage of textbooks focusing on entrepreneurship are scarce. This study provides an inventory of entrepreneurship textbooks and the topics they cover as well as specific emerging topics they do not cover by analyzing the content of 57 textbooks. Our results suggest that most textbooks provide significant coverage of such topics as the nature of entrepreneurship, business plans, financing, marketing, and cases. Among emerging concepts, social media has been relatively well covered with increasing coverage in more recent textbooks, while business canvas, as an example of alternatives to conventional business plans, is rarely covered. Most textbooks have provided little coverage of such topics as sales, family business, women and minorities, as well as ethics and sustainability. This study not only reveals areas that are covered by existing textbooks but also themes that future textbooks and research could cover to address the challenges of future entrepreneurship education.
Design thinking is a process of continuously redesigning a business to achieve both product and process innovation. The purpose of this paper is to present a this case…
Design thinking is a process of continuously redesigning a business to achieve both product and process innovation. The purpose of this paper is to present a this case study of two managers – both highly capable and committed, both seeking to innovate – a design thinking approach with a set of four tools which enables one to succeed with his initiative while the other struggles.
The author demonstrates the use of four tools routinely practiced by successful innovation firms: Journey Mapping – the ethnographic technique to follow the customer home to explore their problems in life; Assumption Testing – a prototyping technique long practiced within any firm's R&D area; Co‐creation – the surest way to de‐risk a new offering is to involve your value chain partners in the innovation's small initial experiments; and Rapid Prototyping – making small bets fast is nothing more than good old hypothesis generating and testing. Many managers have become so analysis focused that they have forgotten that the best data in an uncertain environment come from real world trials, not extrapolation of history. A tool like assumption testing, that structures the process, is essential.
The paper finds that learning only occurs when we step away from the familiar and accept the uncertainty that inevitably accompanies new experiences. Innovation means moving into uncertainty.
The cases are drawn from direct experience working with large US corporations.
These are tools that any manager can use to execute an innovation initiative.
The paper reveals that it is important to have customer intimacy with a deep and personal empathy with customers as people, rather than as demographic or marketing categories. A focus on improving their lives (not just selling them products), allows perception of new opportunities (unarticulated needs) that others miss. It also highlights the importance of a low‐risk approach. One can expect to make mistakes and therefore adopt a portfolio‐based, experimental approach, in which multiple small experiments are done to test the ideas in action. Reduce risk whenever possible and increase learning by partnering with suppliers, giving them skin in the game. It also reveals that one should not bet on analysis alone; one should not seek the one right “answer” nor look only for “big” wins at the outset, or to be able to “prove” the value of the idea before moving into the marketplace. All of these beliefs are fatally flawed in the context of the uncertainty surrounding growth.
This case reflects a classic approach to entrepreneurship based on entrepreneurial resources and opportunities. It also provides a vehicle for discussing the key features…
This case reflects a classic approach to entrepreneurship based on entrepreneurial resources and opportunities. It also provides a vehicle for discussing the key features of a business model. It also addresses key strategic choices such as whether to replicate a business model or not.
This case study sets out the story of an entrepreneur: Zein Rachidi. It describes his history and the key milestones in his professional development until the creation and development of his own startup “Topotrade” the first online market place for used topography equipment. It also exposes his development plan, his will to scale up his business by replicating the same business model of Topotrade in a new market, that of used biomedical equipment.
Complexity academic level
This case is written mainly with a view to its use in the context of entrepreneurship courses for undergraduate students in management, as well as for entrepreneurs who can compare Zein’s trajectory to their own. This case is designed for students also suitable for courses in basic strategy, strategy and change and disruptive business models.
Teaching Notes are available for educators only.
CSS 3: Entrepreneurship.
Private company investors operate in unique environments. Seed equity investors, which generally include venture capitalists and angel investors, often have the…
Private company investors operate in unique environments. Seed equity investors, which generally include venture capitalists and angel investors, often have the particularly unusual role of becoming involved in the oversight of the investee company. This continuing involvement with the investee firm introduces conflicting interests: the desire to maximize the profit from the investment, but also the desire to maintain a positive relationship with the entrepreneur(s) (consistent with the theory of upper echelons/strategic management). We discuss in detail this unusual investment context and the role that accounting disclosures can have in this environment. We predict that accounting disclosures can influence the tradeoff between the profit motive and the relationship motive. Using 64 experienced angel investors as participants in a realistic experimental setting, we find that disclosures indicating conservatively biased accounting choice and lower account risk (variance) lead to angels increasing the valuation of the target firm and forgoing higher profits. Increasing the valuation serves to foster the relationship with the entrepreneur(s). Our findings have implications for entrepreneurs making choices about discretionary disclosures and for standard setters; we also inform theory related to overcoming anchoring.
Judgments and decision are central to entrepreneurship, but capturing them empirically is challenging. Shepherd and Zacharakis (1997) addressed this challenge by…
Judgments and decision are central to entrepreneurship, but capturing them empirically is challenging. Shepherd and Zacharakis (1997) addressed this challenge by identifying metric conjoint analysis as an experimental method capable of capturing the decision policies of actors engaged in entrepreneurial task, creating a “window of opportunity” for entrepreneurship research. On the twentieth anniversary of this chapter, the authors reflect on the impact the ideas had on their own work and careers, while, at the same time, address the possibility that the “typical” conjoint study may have reached the end. From this platform, the authors identify unknown attributes, interactive effects, rich media, mixed methods, and sophisticated data analysis as potential pathways by which conjoint analysis can continue to advance understanding of entrepreneurship. Their conclusion is that when coupled with impactful research questions, innovative uses of conjoint analysis have an important role to play in the future of entrepreneurship research. Hence, the authors believe that Dean A. Shepherd’s and Zach Zacharakis’s bold effort will continue as a quintessential resource for those researchers who wish to tap the mind of entrepreneurs, investors, and other key actors as they traverse the journey of business venturing.
With behavioral experiments and protocol analysis, researchers can capture cognition in action. Using behavioral experiments, they can study realized behavior, not…
With behavioral experiments and protocol analysis, researchers can capture cognition in action. Using behavioral experiments, they can study realized behavior, not perception or self-reports. And they can do that in a controlled laboratory environment to establish causality, curbing spurious relationships. With protocol analysis, a method to elicit decision-makers’ thoughts, researchers can tap into cognitive processes. In combination, the two methods offer a novel approach to grasp mental processes alongside behavior, to reach causality and replicate findings. We describe the methods, demonstrate how researchers can apply them, and share practices from the design of experimental instruments to the replication of findings.
Process is an ambivalent term. Its use in organizational research and theorizing is widespread. Yet, there are important subtle differences in how the term is understood…
Process is an ambivalent term. Its use in organizational research and theorizing is widespread. Yet, there are important subtle differences in how the term is understood and employed in the study of organizing/organization. In this chapter, we show that thinking in terms of ceaseless change, emergence and the immanent becoming of things, entities and events are central to a proper appreciation of what it means to truly understand process in genuinely processual terms. From this process philosophical perspective, social entities such as individuals and organizations are construed as temporarily stabilized event clusters abstracted from a sea of constant flux and change. Such an approach to the understanding of organizational phenomena draws its inspiration from a tradition of thinkers from Heraclitus to twentieth-century process philosophers such as William James, Henri Bergson and Alfred North Whitehead and beyond all of who, in one way or another, viewed reality in terms of ceaseless process, flux and transformation rather than as a stable world of unchanging entities. In what follows, we outline the key principles and axioms of process philosophy. We show that from a process philosophical outlook, primacy is accorded to becoming over being, difference over self-identity, and time and temporality over simple spatial location. We then examine the implications of process thinking for understanding organization as an ongoing ‘world-making’ phenomenon and show that the current interest in organizational sensemaking, organizational identity and entrepreneurial logic provides good illustrations of how and when process and emergence are taken seriously, our understanding of organizational situations can be vastly enriched.
Purpose – The purpose of this essay is to explore further the concept of value cocreation from a service-ecosystems view, by considering the importance of networks and the…
Purpose – The purpose of this essay is to explore further the concept of value cocreation from a service-ecosystems view, by considering the importance of networks and the configuration of relationships and resources in markets.
Methodology/approach – We use a conceptual approach to extend a service-dominant (S-D) logic, ecosystems view of value cocreation by drawing on the literature regarding networks in marketing and related research.
Findings – A service-ecosystems approach to cocreating value-in-context is proposed, which points toward networks as mediating factors in value cocreation because they influence the ability to access, adapt, and integrate resources by establishing exchange relationships and shaping the social contexts through which value is experienced.
Research implications – This research suggests that value cocreation is a complex and multidimensional process that is best studied in the context of dynamic networks or ecosystems of service exchange.
Practical implications – This research suggests that networks mediate value cocreation, and thus, firms should consider the configurations of relationships and resources to develop more compelling value propositions.
Social implications – This research draws on the idea that exchange relationships are embedded within society and suggests that processes of value cocreation not only draw on but also contribute to the social contexts that frame market exchange.
Originality/value of essay – This research extends the value cocreation and S-D logic literature by exploring the role of networks in service ecosystems. In this framework, networks are mediators of value cocreation because they enable access to resources and help to (re)shape social contexts through which value is derived.