Showing papers in "Academy of Entrepreneurship Journal in 2012"

Individual Entrepreneurial Orientation: Further Investigation of a Measurement Instrument

Abstract: Bolton and Lane (2012) recently proposed, developed, and validated a measure of individual entrepreneurial orientation (IEO) using a student sample. Their recommendations for future research included testing the instrument with non-student samples. In keeping with Hubbard, Vetter, and Little's (1998) call for publishing of replications with extensions in business research, a sample of 340 entrepreneurs in Western Kentucky was used to further validate the IEO. The ten items on the IEO measuring the dimensions of Innovativ eness, Risk-taking, and Proactiveness loaded as separate factors as in the original study, with the exception of one item (for Innovativ eness) which loaded on two factors (Innovativ eness and Risk-taking). Cronbach alphas computed for the three factors from the sample of entrepreneurs were all above 0.765, further verifying the internal consistency of the IEO. External validity was verified with correlations and t-tests for the IEO with self-reported performance measures by the entrepreneurs. This investigation of the IEO further demonstrates that it is a reliable and valid measure of entrepreneurial orientation at the individual level. A better understanding of entrepreneurial orientation at the individual level could be valuable to potential investors and to those determining business resource allocations. INTRODUCTION AND BACKGROUND Bolton and Lane (2012) recently proposed, developed, and validated a measure of individual entrepreneurial orientation (IEO) after pointing out that there is disparity in the literature on how entrepreneurial an individual may be and how that has been assessed. For example, while research has shown that entrepreneurs are more open, conscientious, extraverted, and less neurotic and less agreeable than regular managers (Zhao & Siebert, 2006), a recent meta-analysis (Zhao, Seibert, & Lumpkin, 2010) shows only openness and conscientiousness to be highly correlated with entrepreneurial performance and intentions. Entrepreneurial orientation (EO) at the organization level has been shown to correlate with entrepreneurial performance (Rauch, Frese, Koenig, & Wang, 2009). And yet, no research effort has been directed specifically at the trait and attitude measures that are inherent in the original EO scale for assessing the individual. Bolton and Lane's IEO attempts to fill that void. The work of Bolton and Lane (2012) surveyed a large student sample (n = 1 102) from a regional mid-south university with items generated from Lumpkin and Dess's (1996) original five EO variables (innovativeness, willingness to take risks, proactiveness, competitive aggressiveness, and autonomy). Validated measures of entrepreneurial orientation used by Lumpkin, Cogliser, and Schneider (2009) were adapted for individuals (e.g., "my firm" changed to "I") and students responded to the Likert scale items for these measures and for measures of propensity for entrepreneurship (i.e., I would like to work for myself; I would like to start my own venture). Bolton and Lane (2012) analyzed their data with principal component factor analysis. Three distinct factors resulted and accounted for 60% of the total variance: Innovativeness, Risk-taking, and Proactiveness. These were the same three variables that have been examined predominantly in EO research (Rauch, et al., 2009). Cronbach's alpha for internal consistency for all three were above Nunnally and Bernstein's (1994) standard for scale development studies. Bolton and Lane further analyzed the items of the subscales and measures of students' entrepreneurial intentions and found correlations among the three subscales as well as with entrepreneurial propensity. This is in keeping with past EO research which shows that the subscales of the EO correlate with each other and with firm performance (Rauch et al., 2009) and provides construct validity to their study. Bolton and Lane (2012) conclude that their scale development process resulted in three distinct factors as measured by their ten-item Individual Entrepreneurial Orientation which demonstrated reliability and validity. …

Social Entrepreneur Development: An Integration of Critical Pedagogy, the Theory of Planned Behavior and the ACS Model

Abstract: It is essential to identify and develop social entrepreneurs in order to solve some of the complex problems facing various communities. In this article, the authors draw on the works of Paulo Friere, as well as The Center for Leadership Development's Assess, Challenge, Support (ACS) model and the Theory of Planned Behavior (TPB), to serve as a blueprint for Social Entrepreneur Development (SED). The authors assessed the social entrepreneurial intentions scores of African-American and Hispanic college students and found that they possess low intentions to become social entrepreneurs. The Theory of Planned Behavior, the ACS model, and critical pedagogy serve as a guide to develop tomorrow's agents of change and to increase their intentions to become social entrepreneurs. Keywords: Social entrepreneurship, critical pedagogy, theory of planned behavior, ACS model, social entrepreneur development INTRODUCTION Universities and other institutions may want to train and develop tomorrow's agents of change in order to bring about positive social change in disadvantaged communities. Social entrepreneur development, which is the process of equipping individuals with the knowledge, skills, and resources to enable them to positively impact society through social entrepreneurial ventures, may be the best way to bring about this social transformation. Social entrepreneurship is emerging as an inventive approach for dealing with complex social needs (Johnson, 2002). With its emphasis on problem-solving and social innovation, socially entrepreneurial activities blur the traditional boundaries between the public, private and non-profit sector, and emphasize hybrid models of for-profit and non-profit activities (Johnson, 2002). Thompson, Alvy, and Lees (2000) described social entrepreneurship as the process of applying entrepreneurial principles to creative vision, leadership, and the will to succeed in inducing social change. Social entrepreneurs are different from business entrepreneurs in many ways. The key difference is that social entrepreneurs set out with an explicit social mission in mind. Their main objective is to make the world a better place. The job of the social entrepreneur is to recognize when a part of society is not working and to solve the problem by fixing the system, spreading solutions and persuading entire societies to take new leaps (Drayton, 2005). Some minority college students have succeeded in making a difference in their communities, and their vision coupled with social entrepreneurial training could be instrumental in reducing many social ills, including poverty, crime, and discrimination. African American and Hispanic undergraduate students should be developed as social entrepreneurs so that they can be equipped to create ventures that bring about meaningful change in disadvantaged communities. COLLEGE STUDENTS AND SOCIAL CHANGE The role of college students as agents of change has been identified through various movements and occurrences of activism that involved student-initiated collective action against authoritative social and political structures (Mars, 2009). Lipset and Schaflander (1971) identified such movements and activism as far back as the student involvement in the nineteenth century revolutionary movements in France, Germany, and Italy. More recently, student activism has been widely recognized through the demonstrations of the civil rights movement, protests against America's involvement in the Vietnam conflict, and collective support for the divestment of South African Apartheid (Mars, 2009). Students have also been shown to engage in grassroots leadership that was intended on creating organizational change within colleges and universities (Mars, 2009). For example, over the past two decades a new form of student activism has emerged on campuses around the country (Rhoads, Buenavista, & Maldonado, 2004). Campus organizations representing students of color have increasingly united for the purpose of enhancing academic support for students from underrepresented or marginalized ethnic or racial backgrounds (Rhoads, Buenavista, & Maldonado, 2004). …

Entrepreneurship with Social Value: A Conceptual Model for Performance Measurement

Abstract: Social entrepreneurship, ventures with a self-sustaining business model and a social impact objective, is a trend gaining momentum and garnering attention for the "citizen sector:" How is the social impact measured? How might it be measured? Based on a multi-disciplinary literature review and an examination of current practice, this research attempts to address these questions. A performance measurement framework is proposed and illustrated by archetypes of common social ventures. Keywords: social entrepreneurship; performance measurement; citizen sector; social value; social value; outcome assessment; balanced scorecard MOTIVATION Performance measurement is of increasing importance, whether in industry, academia, or the public sector, as organizations are held to greater standards of accountability and transparency, especially for financial reporting. Such oversight does not extend to the outcomes of social entrepreneurial ventures, although there are some foundations and nonprofits that provide support to these entrepreneurs based on some evaluation. For example, Ashoka (www.ashoka.org) provides funding to Fellows based on five criteria: the knockout test: a new idea; creativity; entrepreneurial quality; social impact; and ethical fiber. In their annual recognition of the most accomplished social entrepreneurs around the world, the Schwab Foundation (www.schwabfound.org) uses criteria of innovation, sustainability, and direct social impact, in quantifiable results. According to Mulgan (2010), metrics to measure social impact have proliferated over the past several decades, resulting in hundreds of competing methods for calculating social value. Building on these ideas, and others found in the academic literature, this research examines the question of how social value is created and measured. The extant literature on social entrepreneurship is examined, and a multi-disciplinary perspective of performance measurement is presented to establish the conceptual model in the following section. LITERATURE REVIEW The defmition of a social entrepreneur varies. In the most general sense, a social entrepreneur is someone who starts a new organization to accomplish a social mission. What distinguishes a social entrepreneur from other leaders in the citizen sector who start or lead social impact-oriented organizations? Specifically, social entrepreneurs are able to serve this mission with a (largely) self-sustaining business model. They may start with some seed funding, they may operate partially through fund-raising, but social entrepreneurs are able to generate profits in both fmancial and social terms. They are a new model of entrepreneurship: not-for-personalprofit enterprise, and generate value for social ends and wealth to enable reinvestment and the sustainability of the business (Chell, 2007, p.18.) This business model is different from that of a nonprofit in that the entrepreneur takes on risk; for the social entrepreneur that risk is taken at the behest of others, in hopes of having social impact. As Mair and Marti (2006, p. 36) describe it, "social entrepreneurship as a process that catalyzes social change and addresses important social needs in a way that is not dominated by direct fmancial benefits for the entrepreneurs." Prieto (2011, p.77) suggests that disadvantaged communities need social entrepreneurs to generate innovative solutions to complex problems. Mother difference with nonprofits is that "a nonprofit organization is, in essence, an organization that is barred from distributing its net earnings, if any, to individuals who exercise control over it... It should be noted that a nonprofit organization is not barred from earning a profit... It is only the distribution of profits that is prohibited" (Brody, 1996, p. 458). Dees, (1998, p.60) notes the pressures on nonprofits to become sustainable through the introduction of commercial activity and suggests that it is possible to position social enterprises along a spectrum from the purely philanthropic to the purely commercial. …

A Model of Shared Entrepreneurial Leadership

Abstract: INTRODUCTION The stereotype of the entrepreneurial leader is an individual of great charisma who is beloved by his or her subordinates and who inspires them to heroic acts of performance. Like the stereotype of the lone genius who develops a paradigm changing innovation, it is a romantic perspective, but not one which bears a great deal of resemblance to reality. Humans discovered the value of teams while we were still living in trees and caves. Teams are stronger, wiser, and more powerful. We used teams to protect the tribe; we used teams to forage for food; we used teams to conquer the soil. As we grew into a more structured society, we used teams to advance that society. In fact, we have always used teams to leverage our insight, our power, and our understanding. We still do that today. The evolution of the great person stereotype is interesting to observe. We seem to have always been fascinated by stories of lone rangers fighting against insuperable odds, and winning. These legends have not only entertained us, they have gained the stature of expectation and admiration in our societies and in our lives. That does not change the fact that they are legends! ENTREPRENEURIAL TEAMS Gartner, Shaver, Gatewood and Katz (1994) argued that the "entrepreneur in entrepreneurship" is more likely to be plural than singular. That is, entrepreneurial firms are more likely to be started, by teams of entrepreneurs than individual entrepreneurs. Since that piece appeared, there has been a veritable flood of articles demonstrating the ubiquity of entrepreneurial teams. We have always believed in the value of teams, and, in fact, when individuals tend to be recognized for their accomplishments, there is, more often than not, a team actually involved, but one or more members simply are not recognized. Consider the role of a spouse or companion who does not take a leadership role or position in the founding of a venture. Quite often, such support people tend to be deeply involved in the development, maturation and evolution of the entrepreneurial vision or idea. Even when a successful entrepreneur is interviewed about the "early days" of the venture, the involvement of other people in the evolution of the idea is frequently minimized simply because memory is imperfect and the slow evolution of an amorphous idea into a crystalized vision fades to become a memory of an "aha" idea. In 2005, in the introduction to a special issue of the International Small Business Journal devoted to entrepreneurial teams, Thomas Cooney (2005) presented a great review of the evolution of the literature recognizing the ubiquity of entrepreneurial teams. Table 1 displays a sampling of the findings of entrepreneurship researchers studying the role of teams in the founding of the venture. There can be little doubt that the predominant view embodied in the entrepreneurship literature is that entrepreneurial teams do exist and they are disproportionately involved in the establishment of ventures which have the potential for rapid growth and expansion. In fact, there is a vast body of empirical literature which demonstrates that entrepreneurial teams do, in fact, lead ventures which have better financial performance than firms led by individual entrepreneurs. Table 2 displays a sampling of these studies. We conclude from the literature that entrepreneurial teams are disproportionately involved in the creation of entrepreneurial ventures with greater growth prospects. In other words, if we discount the creation of low potential ventures, entrepreneurial teams are the norm. Secondly, we conclude from the literature that the entrepreneurial team engages in shared leadership and that the composition of that team has a significant impact on the financial performance of the venture. We can view entrepreneurial leadership as being composed of the visioning process, which evolves the initial and on-going vision or idea for the venture, and of the leading process, which involves the initial and on-going command and control of the venture. …

Entrepreneurial Orientation: An Empirical Study of the Risk-Propensity Dimension of Entrepreneurs

Abstract: The goal of this paper was to analyze the relationship that might exist between risk taking propensity and the entrepreneurial orientation of entrepreneurs. In order to test that relationship, a contingency approach was used by splitting a sample of entrepreneurs into three different sets based on the Carlands' trichotomy of entrepreneurs. A sample of 1003 entrepreneurs was used for the study, and 103 responses were used for analysis. The result of the study indicates that the relationship between risk propensity and the entrepreneurial orientation of entrepreneurs is contingent to the set of entrepreneurs. INTRODUCTION The entrepreneurial orientation construct in entrepreneurship has received considerable attention from researchers, even if there are some controversies in its dimensions (Josien, 2008; Gurol & Atsan, 2006; Lyon, Lumpkin, & Dess, 2000; Aragon-Correa, 1998; Barringer & Bluedorn, 1999; Zahra & Covin, 1995; Dess & Lumpkin, 1996). This high level of interest is stemming from the significant impact the entrepreneurial activity has on an economy. This economical impact can be seen through the number of jobs created by entrepreneurs. Entrepreneurial ventures, defined as small firms with fewer than 500 employees, accounted for 69% of the total employment growth for the 1992-1996 period. Small business ventures represented all of the employment growth in goods-producing industries, 59% of the growth in service, and 79% of the growth in information technology (U.S. Small Business Administration, 2000). A careful analysis of the results of the research mentioned above reveal that conflicting results have been found. For some researchers, entrepreneurial orientation is composed of three dimensions: innovativeness, proactiveness, and risk taking (Wiklund & Shepherd, 2005; Morris & Sexton, 1996). For some others, that same concept has five dimensions: autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness (Dess & Lumpkin, 1996). There are also some researchers who use a different set of five dimensions: achievement, personal control, innovation, self-esteem, and opportunism (Robinson, 1987; Shanthakumar, 1992), and one researcher even included two more dimensions to the previous model: risk taking and independence (Solymossy, 1998). One of the more salient areas of conflicting results is within the risk taking dimension of entrepreneurs. Indeed, risk taking has always been a part of the early entrepreneurship literature, dating back to Cantillon (1734) who argued that the principal factor that separated entrepreneurs from hired employees was the uncertainty and risk of self-employment. Furthermore, the risk propensity dimension of entrepreneurs has yielded different outcomes: Palmer (1971) and Liles (1974) reported that entrepreneurial functions primarily involve risk taking. In addition calculated risk taking is reported to be a strategic behavior of entrepreneurs (Hoy & Carland, 1983). However, some other findings may indicate that entrepreneurs may be risk-averse due to their strategic behavior (Burns & Kippenberger, 1988). Similarly, chief executives with external control were found to be conservative in their decision-making, while chief executives with internal locus of control were more prepared to adopt riskier decisions (Miller & Friesen, 1982). Conversely, the need for achievement is associated with risk taking propensities (McClelland, 1961). Furthermore, Brockhaus (1980) has reported inconsistencies in the risk-taking propensity of entrepreneurs. Finally, Gurol and Atsan (2006) found a difference in risk taking propensity between entrepreneurial students versus non-entrepreneurial students based on 400 Turkish students. As we can see, the literature review shows without a doubt that there are conflicting results as far as the risk propensity dimension is concerned. Therefore, it might be fruitful to examine why some researchers have found antagonistic results about the risk dimension in the entrepreneurial orientation of entrepreneurs. …

Beyond Risk Propensity-The Influence of Evaluation Period and Information Relevance on Risk Taking Behavior

Abstract: INTRODUCTION Entrepreneurs face and respond to risks every day (Sarasvathy et al., 1998). Entrepreneurial researchers have long debated whether entrepreneurs are different than others in the way they perceive and respond to risks. For some scholars, the essence of being an entrepreneur is taking risks and functioning in less structured environments in which uncertainties are welcomed rather than feared (Cantillon, 1755 [1979]; Knight, 1921). Others argue that entrepreneurs are no different than others in the way they perceive and take risks (Brockhaus, 1980; Palich and Bagby, 1995). Still other researchers maintain that entrepreneurs might be more risk averse than the general population (Xu and Ruef, 2004). One reason for such diversity might be the different risk conceptualizations that researchers adopt (Sitkin and Pablo, 1992). Two general approaches to entrepreneurial risk taking can be distinguished from previous literature. In some accounts, entrepreneurial risk taking behaviors (the decision-making behaviors in risky context) are considered relative stable behaviors that stem from innate, dispositional traits such as risk taking propensity (Stewart and Roth, 2001). Accordingly, entrepreneurs and non-entrepreneurs might differ in their general dispositions towards risk and such differences tend to persist across a variety of context and environments. Alternatively, risk behaviors can be conceptualized as the output of a context-specific judgment process. From this perspective, individual's risk behaviors largely result from contextual and environmental factors that influence how they view, frame, and solve the problem at hand (Kahneman and Tversky, 1979; Tversky and Kahneman, 1991). Accordingly, influencing how decision makers view problems should alter their behaviors, making them either more or less likely to engage in risky behaviors. Whereas individuals' actual risk behavior might be a combination of dispositional risk propensity and environmental factors, any study investigating the risk taking behaviors of entrepreneurs vs. non-entrepreneurs has to control for risk taking propensity and simultaneously evaluate the influence of decision making context. A growing body of research suggests that investment time horizon (i.e., the choice of evaluation period) is an important contextual factor that influences risk framing and risk behavior (cf., Behartzi and Thaler, 1999; Gneezy and Potters, 1997; Gneezy et al., 2003; Klos et al., 2005). The longer time horizon decision makers adopt, the longer the period that they choose to evaluate their decision outcome, and the less likely that they will experience loss. Consider an investment option that offers equal chances to win $200 or to lose $100. The probability of losing money after one independent trial is 0.5, but goes down to 0.25 for two independent trials, to 0.18 after 10 independent trials and to 0.0077 for 50 independent trials (Klos et al., 2005). In this way, the risky business of investment becomes less risky after more independent trials over a longer evaluation period. Another stream of research also emphasizes the importance of information relevance in influencing risk behaviors (Rothman and Schwarz, 1998). Relevant information tends to elicit systematic processing of available information whereas irrelevant information fosters heuristic processing of information (Crano and Prislin, 2006). Systematic information processing might reduce risk taking behavior because decision makers have an opportunity to evaluate arguments in favor and against a decision. If decision makers tend to be generally risk averse, they might weigh losses more heavily than gains and thus take less risk. The choice of evaluation period and the relevance of information are of particular importance in entrepreneurs' work environments. Entrepreneurs operate in highly chaotic, complex and unpredictable environments where they make time sensitive decisions despite a lack of relevant and available information (Aldrich and Martinez, 2001). …

An Investigation of the Reliability and Validity of an Entrepreneurial Orientation Index in Brazil

Abstract: PRELIMINARY REMARKS Entrepreneurship is gaining scientific status and tends to consolidate as a research field (Bruyat & Julien, 2000; Shane & Venkataraman, 2000). For instance, the Academy of Management, in 1987, created a division for studies in this field including a definition of entrepreneurship as follows: Entrepreneurship is the creation and management of new businesses, small businesses and family firms, as well as the characteristics and special problems of entrepreneurs. Its major topic areas include: new venture ideas and strategies; ecological influences on venture creation and demise; the acquisition and management of venture capital and venture teams; self-employment; the owner-manager, and the relationship between entrepreneurship and economic development (Shane, 1997, p. 83). Prior to the Academy of Management creation of the Entrepreneurship Division, Harvard Business School, since 1946, has established a research programme on entrepreneurship defining it as the pursuit of opportunity beyond the tangible resources currently controlled, described as a way of managing rather than a specific economic function or characteristic of an individual (Retrieved December 9, 2001, from http://www.entrepreneurship.hbs.edu/). Furthermore, the Arthur M. Blank Center for Entrepreneurship at Babson College defines entrepreneurship as a way of thinking and acting that is opportunity obsessed, holistic in approach and leadership balanced. At Babson, entrepreneurship is conceptualized as identifying an opportunity regardless of the resources currently available and executing on that opportunity for the purpose of wealth creation in the private, public and global sectors (Retrieved December 9, 2001, from http://www2.babson.Edu/babson/babsoneshipp.nsf/). Explanations about the entrepreneurial act have been sought in both individual's traits and behaviors (Kets de Vries, 1985; Carland & Carland, 1991; Hufner, Hunt, & Robinson, 1996; Machado & Gimenez, 2000). Thus, entrepreneurs have been described in diverse manners in the literature. Researchers and practitioners divide among those who consider the entrepreneurial act as an extraordinary phenomenon, those who consider it as common as the breathing process, i.e., a universal human feature, and those (the majority) that consider it as a complex and multifaceted process. Our own understanding is that the most adequate definitions can be found in Filion (1999a) and Carland et al. (1984) that are included in the third group above. The entrepreneur is someone who, in the process of building a vision, establishes a business aiming for profit and growth, manifesting an innovative behavior and adopting a strategic posture. We also believe that studies should not focus on being or not an entrepreneur, but as Carland and colaborators point out, on a continuum of different levels of entrepreneurial behavior. Individuals may show higher or lower levels of entrepreneurial behavior. The present paper aims to discuss the validation of a translated version into Portuguese of the Carland Entrepreneurship Index--CEI. This instrument measures personal entrepreneurial orientation and has been widely applied in entrepreneurship research across the USA. There have been no reports, to our knowledge, of CEI's use in other cultures, and this is the first time it has been used in the Portuguese language. Entrepreneurship has been studied as a culturally independent phenomenon (Reynolds et al, 2000) thus, this paper contributes to this discussion showing the appropriateness of this measure for another culture. THE CARLAND ENTREPRENEURSHIP INDEX CEI is the result of research efforts conducted by Jim and JoAnn Carland and collaborators over a long period of time as reported in Carland, Carland & Hoy (1992). Their work has been published widely since 1982, and CEI is still being investigated quite recently (Carland et al, 1998; Carland, Carland & Ensley, 2000). …

On Heidegger, 'Theory of Nothing' and Entrepreneurship a Prologue to an Entrepreneurial Philosophy of Nothing

Abstract: This paper proposes that entrepreneurs hip is often considered a decision-making paradigm and that the equally important 'theory of Nothing' has not received the attention it deserves. With reference to Heidegger's existence oriented philosophy, the paper indicates how nothing can be a condition for an entrepreneurial decision-making paradigm. It is suggested that the 'theory of Nothing' bears the possibility of further development and can re-create the entrepreneurial paradigm of decision making. This may also indicate a structure for understanding the possibilities in entrepreneurs hip research. INTRODUCTION "Since capitalist enterprise, by its very achievements, tends to automatize progress, we conclude that it tends to make itself superfluous-to break to pieces under the pressure of its own success" (Schumpeter 1987: 134). ". . . because Dasein is lost in the 'they', it must first find itself. . .it must be shown to itself in its possible authenticity" (Heidegger 1962: 268) Heidegger's potential in offering insights into entrepreneurial research has not received much attention, despite the striking resemblance between the entrepreneurial and economic need for newness (Schumpeter 1987) and a reading of Heidegger's thinking as the philosophy of newness (Chattopadhyay and Srivastava 2007). Shionoya (2010) is one of the few who has commented upon this issue and observes that; "Schumpeter, from the Austrian school of economics, criticized the static nature of mainstream economics and took a unique approach to dynamic economics based on the concept of innovation and development. However, his economic theory is part of his concept of a universal social science: he had a much broader vision of society based on a typology of Dasein, though he did not use this ontological term " (: 191). In short, Heidegger's notion of newness involves relinquishing the 'automatized' and 'practical' self-understanding (Dasein) which may block us from being open to possibilities. Entrepreneurship is often understood as the art of the new: new ventures, new companies, new products, innovations and so on. It would thus seem to be contradictory to speak about 'nothing' and the importance of 'a theory of Nothing' with regard to the constructive creation of new products, ventures and the like. Instead of embracing the oxymoronic and paradoxical nature of entrepreneurial nothingness, which considers entrepreneurial being and nothing as mutually exclusive aspects, I offer the view that it is a valid and useful addition and condition to the lexicon of entrepreneurial decision-making practices. It is incorrect to view 'nothing' and entrepreneurial as being opposites. This applies equally to lay thinking and the very theory or essence of entrepreneurship. I will also claim that there is much to be gained or recalled in analytic terms from understanding a 'theory of Nothing'. It is possible to rethink certain takenfor-granted notions about what kind of decision-making entrepreneurship consists of, and also expand the notion of the entrepreneurial decision making. This is not an effort to completely translate the sublime and often very difficult philosophical thinking of Heidegger into the realm of entrepreneurship studies, or to enter into a difficult sorting out the different periods and writings of Heidegger's thinking. There is no intention to offer a 'grand' and novel theory of entrepreneurship. Instead I will show how some aspects of how entrepreneurship and decision making have usually been interlinked and discussed, and suggest how this relationship can be recreated. Even though I will talk of a 'theory of Nothing', I do not claim to have such a theory. The way of thinking is to indicate that non-being and nothingness show something beyond theory and language. This is a kind of phenomenology where the phenomena and subjectivity of human experience become more valued. Heidegger (1962) argues that much of the Western tradition has merely assumed a general theory about being human based on limited phenomena without adequately examining the phenomena themselves and without letting that phenomena guide any theorizing. …

The Impact of Industry Clusters on the Economy in the United States

Abstract: In the technology industry, people from different companies are trying to find ways of sharing employment, industry, and other characteristics that help strengthen their company. The information technology cluster identified in this study will provide useful information about a regional economy's strengths and weaknesses. The research shows an industry can compete around the world provided some of the incentives. Also the research shows an IT cluster can produce quality innovative personnel for when they join other business companies around the U.S., they can enhance performance and increase efficiency in those areas. Keywords: Cluster, Silicon, Jobs, Unemployment, Industry, Region. INTRODUCTION It is important that we first understand what clusters are before attempting to highlight their importance. Harvard business school defines the term 'clusters' as "a geographically proximate group of interconnected companies and associated institutions in a particular field, including product producers, service providers, suppliers, universities, and trade associations". Michael Porter is responsible for the introduction and popularization of clusters. Porter stated that "clusters have the potential to affect competition in three ways: by increasing the productivity of the companies in the cluster, by driving innovation in the field, and by stimulating new businesses in the field. In the modern global economy, comparative advantage, how certain locations have special endowments to overcome heavy input costs, is less relevant. Now, competitive advantage, how companies make productive use of inputs, requiring continual innovation, is more important" (Porter, 1998). Clusters are groups of inter-related industries that drive wealth creation in a region, primarily through export of goods and services. The use of clusters as a descriptive tool for regional economic relationships provides a richer, more meaningful representation of local industry drivers and regional dynamics than do traditional methods. An industry cluster is different from the classic definition of industry sectors because it represents the entire value chain of a broadly defined industry from suppliers to end products, including supporting services and specialized infrastructure. Cluster industries are geographically concentrated and interconnected by the flow of goods and services, which is stronger than the flow linking them to the rest of the economy. Clusters include both high and low-value added employment. Industry clusters are not new to the business. They have been in development for years. This research focuses on how American companies clustered together, are beneficial to their businesses. Observing various regions, this study takes a look at the importance of information technology clusters. According to Michael Porter, similar companies are not the only companies that tend to cluster together. It happens in virtually every business and it has to do with natural competitive advantages created by the clustering process (Porter, 1998). It has been proven that when companies cluster together, they tend to have a mutual reinforcement and the flow of information is enhanced when these companies work in the same field. It is much more efficient to do business within a cluster because companies can turn to suppliers or other companies who are near them, rather than creating everything from zero. It is also easy to find people, new business partners and it is a self-reinforcing process that tends to feed on itself. In fact, the government plays a strategic role to improve the performance of each key industry through the development and deployment of such project (Tan, 2009). Statement of Problem Many businesses in the United States have trouble competing nationally and globally. This is due to a lack of skilled manpower, government policies, the cost and quality of the labor force, the supplier networks and a lack of economic development incentive programs. …

Valuing Internet Companies: A More Accurate, Comprehensive Financial Model

Abstract: INTRODUCTION The Internet has become a part of life for many, if not most, households in the US and most of the developed world. It is commonly used for communication, commerce, entertainment, and education. According to the PEW Internet and American Life Project national survey (Rainie, 2010), 74% of American adults (age 18 and older) use the Internet, 60% of American adults use broadband connections at home, and 55% of American adults connect to the Internet wirelessly, either through a WiFi or WiMax connection via their laptops or through their handheld device including smart phones. Because of its growing reach and potential, entrepreneurs sought to profit from the diverse opportunities the Internet presented. Pioneering internet companies such as Amazon.com, eBay, Overstock.com, and thousands of other e-businesses emerged in the 1990's to take advantage of the huge market potential supported by increasingly sophisticated software platforms for enabling rapid ordering, inventory control, customer data collection and marketing innovations. However, opportunity does not guarantee profitability and sustainability. Who remembers the promise of drugstore.com? The fact is, most Internet companies created in the late 1990s and shortly after the peak of the NASDAQ in 2000 no longer exist today (Laseter & Roth, 2011). In hindsight, market valuations of Internet company value defied common sense. In many cases, the complete lack of product, sales, earnings, or profits did not stop investors from placing big price tags on these companies. Why did investors choose to ignore such fundamentals when valuing Internet companies? What factors determined the worth of an Internet business? In recent years there have been attempts to more clearly understand an Internet pricing model that aligns with traditional company valuations. The question posed in this paper is, "What is the most accurate way to determine Internet company value and what factors support a robust valuation outcome?" This question is more critical now than ever, given the high degree of economic uncertainty in the US and in the global economy. There is little room for the huge speculative errors of the past, especially given the lack of corporate reserves, bank financing and the inability for many financial institutions to weather losses. Jackson (2009) points out while most business leaders and investors agree the Internet has created a few high-profile success stories, there are many more Internet businesses that have destroyed rather than created value. His research illustrates how more recently executives have lowered expectations for the transformational potential of Internet companies and have reduced investments accordingly. The valuation accuracy of Internet firms is needed for a number of stakeholders including venture capitalists who participate in additional funding for e-businesses as well as investors and owners. Yet traditional finance theory provides little useful guidance (see Herring, Olbrich, & Steinrucke, 2006; and Herbst, Lin, & Pantzalis, 2001). There is also little room for error in evaluation as entrepreneurial failure rates tend to increase during recessionary times. Goldenberg and Goldenberg (2009) agree it is challenging to value Internet firms and other technology-based start-ups. There is even a new debate regarding the successful LinkedIn IPO, with some prominent analysts concerned it has signaled the forming of a new Internet bubble 2.0. With the LinkedIn IPO and many more social network IPOs on the horizon including Facebook, Twitter, and Groupon, the issue of valuation of Internet companies has become important once again. Analysts predict the soaring valuations such Internet IPOs could be even bigger than the first one (Rosenbush, 2011). The purpose of this paper is to present an approach to Internet startup valuation which optimizes the strengths of highly effective approaches while omitting the practices which have shown to be unreliable. …