Showing papers in "Journal of Business and Entrepreneurship in 2012"

The entrepreneurship education sub-ecosystem in the united states: opportunities to increase entrepreneurial activity

Abstract: "Entrepreneurship ecosystem" is a popular buzz phrase among academicians, politicians, and practitioners. An ecosystem is the interaction of people, roles, infrastructure, organizations, and events that create an environment for heightened levels of entrepreneurial activity, Entrepreneurship education is a critical part of the system that warrants deeper examination. This paper explores entrepreneurship education as a nested sub-ecosystem within the broader entrepreneurship ecosystem by considering the context of the United States, By delving into a specific subsystem, we highlight the complexity often missed in higher level conversations on entrepreneurship ecosystems. EXECUTIVE SUMMARY In the United States, there is an increasing focus on entrepreneurship by politicians, academics, and practitioners looking to reinvigorate the United States' international competitiveness, to create jobs, and to generate economic growth. This focus is characterized by a celebration of entrepreneurship and reductions in barriers to entrepreneurial activity. Such measures are good things, but we argue that they are short term solutions to an increasingly complex problem. The root of this problem is a lack of entrepreneurship education at all levels. Entrepreneurship education deserves more attention due to its critical role in developing entrepreneurial attitudes, aspirations, and activity. We consider entrepreneurship education as a nested sub-ecosystem within the broader entrepreneurship ecosystem. This approach allows us to consider the different groups that entrepreneurship education must reach, and the differing role entrepreneurship education plays for each group. Specifically, we discuss entrepreneurship education across three distinct levels - K- 12, higher education, and vocational training - and consider how the four programmatic questions outlined by the World Economic Forum are currently being answered for each of the levels in the case of the United States (US). These questions are: 1) What is being taught? 2) Who is being taught and who is doing the teaching? 3) Where are students being taught? and 4) How are students being taught? (Volkmann, et al. 2008). Our analysis demonstrates that the current hodgepodge of programs in the US fails to answer these questions in a coherent manner, and thus fails to meet the needs of entrepreneurs at all levels. If the US wishes to leverage entrepreneurship as a source of competitiveness and as an engine of economic growth, it must develop such coherence by building a network of education programs that fit together in a coordinated way. INTRODUCTION It is widely held that the forces of technology and globalization have fundamentally changed business in the 21st century. China's manufacturing might and India's IT and engineering prowess (Friedman, 2005) have created fear in the United States that the country is doomed to economic and political decline if it cannot somehow respond. Such fears have been stoked by the recent economic crisis with high levels of unemployment, soaring national debt, and foreign policy issues that have put added strain on the US economy. In searching for an answer to these growing threats, the US has turned to its historical strengths in innovation, ingenuity, and capitalism. Some believe that the US can maintain its economic lead if it can outpace other countries in developing and commercializing new ideas and technologies (Schramm, 2006). The country is searching for innovative entrepreneurs to achieve this goal - entrepreneurs that are distinct from those who replicate existing business models in that their businesses drive not just economic activity, but economic growth (Summit Consulting, 2009). These innovators found companies that rapidly grow in size, revenue, and in the number of people they employ. The disproportionate impact they have is dramatic - 15% of the highest growth firms account for 94% of the jobs created (Reynolds, et al. …

Financing Activities of Entrepreneurship Centers in the United States

Abstract: This article examines the financial activities within a sample of entrepreneurship centers in the Unites States. Two hundred and forty-nine entrepreneurship centers were surveyed about their center 's endowments, budgets, salaries, fundraising, seminars/workshops and other financial activities. We received 122 responses for a 49% response rate. The findings of this research can be used as a benchmark for both U.S. schools and center directors in determining benchmarks for their respective centers. INTRODUCTION The nature of business has been transformed in this fast-paced, highly threatening, and increasingly global environment. With the U.S. suffering from its worst economic downturn since the Great Depression of the 1930's, companies are realizing that sustainable competitive advantage is fleeting. And yet, in the midst of this economic turmoil, successful companies have made the fundamental discovery that the ability to continually innovate (to engage in an ongoing process of entrepreneurial actions) has become the newest source of competitive advantage (Kuratko, 2009). The Global Entrepreneurship Monitor (GEM) is a unique, long-term project initiated in 1999 and developed jointly by Babson College, London Business School, and the Kauffman Foundation. Now reaching 42 countries worldwide, GEM provides annual assessment of the entrepreneurial environment of each country. According to the GEM studies, entrepreneurs lead to economic growth in two different ways. One is by entering and expanding existing markets, thereby increasing competition and economic efficiency. The other is by creating entirely new markets by offering innovative products, which present profit opportunities to others, further spurring economic growth. Overall, every GEM study continues to demonstrate that entrepreneurs' ability to expand existing markets and create new markets makes entrepreneurship important for individuals, firms, and entire nations (Minniti and Bygrave, 2004; Autio, 2007). Entrepreneurial firms make two indispensable contributions to the market economies. First, they are an integral part of the renewal process that pervades and defines market economies. Entrepreneurial firms play a crucial role in the innovations that lead to technological change and productivity growth. In short, they are about change and competition because they change market structure. The market economies are dynamic organic entities always in the process of "becoming," rather than an established one that has already arrived. They are about prospects for the future, not about the inheritance of the past. Second, entrepreneurial firms are the essential mechanism by which millions enter the economic mainstream. Entrepreneurial firms enable millions of people, including women, minorities, and immigrants, to access the pursuit of economic success. In this evolutionary process, entrepreneurship plays the crucial and indispensable role of providing the "social glue" that binds together both high-tech and "Main Street" activities (Kuratko, 2009). One definition of entrepreneurship points out that it is a dynamic process of vision, change, and creation to recognize opportunity that requires an application of energy and passion towards the creation and implementation of new ideas and creative solutions (Kuratko, 2009). In this light entrepreneurship is more than the mere creation of business. Although that is certainly as important facet, it's not the complete picture. The characteristics of seeking opportunities, taking risks beyond security, and having the tenacity to push an idea through to reality combine into a special perspective that permeates entrepreneurs. An "entrepreneurial perspective" can be developed in individuals. This perspective can be exhibited inside or outside an organization, in profit or not-for-profit enterprises, and in business or non-business activities for the purpose of bringing forth creative ideas. …

Human assets and entrepreneurial performance: a study of companies started by business school graduates

Abstract: We examined the effect of taking core elective entrepreneurs hip courses on the performance of independent businesses started by Babson alumni who graduated between 1985 and 2009. Taking entrepreneurs hip courses enhanced the amount of startup capital raised, but real-world experience enhanced it more. However, neither taking entrepreneurs hip courses nor learning how to write a business plan had any effect on the subsequent operating performance of the business. In contrast, professional experience gained after graduation before starting a business improved operating performance.EXECUTIVE SUMMARYOur study examines if businesses started by alumni who took core elective entrepreneurship courses performed any better than ones started by alumni who never took those courses. We surveyed 3,775 Babson alumni who graduated during a 25-year period, 1985-2009; 63% had taken one or more of three core elective entrepreneurship courses and 37% had taken none.During the past 25 years, entrepreneurship education has become a major field of business school pedagogy, so it is surprising that there have been few studies of whether it is effective. What's more, almost all those studies concentrate only on short-term effects of entrepreneurship education on students' intentions to become entrepreneurs; very few have looked at long-term effects; and fewer yet have studied the performance of businesses started by alumni. Not surprisingly, the National Council for Graduate Entrepreneurship (NCGE 2004) report pleaded for research into the performance of entrepreneurship education graduates in action as actual entrepreneurs. Our paper is a pioneering attempt to answer the question raised by the NCGE report and by many others concerned with the effectiveness of entrepreneurship education. We look at whether entrepreneurship education has a positive influence on performance when starting up a new venture or subsequently operating it and also examine the effect of experience on entrepreneurial performance.We found that taking entrepreneurship courses enhanced the amount of startup capital raised, but real-world experience enhanced it more. However, neither taking entrepreneurship courses nor learning how to write a business plan had any effect on the subsequent operating performance of the business. In contrast, professional experience gained after graduation before starting a business improved operating performance.The results provide new insights about the value of entrepreneurship courses in higher education and their importance relative to practical experience. Our findings are important for students, educators, policy makers, foundations, and benefactors.LITERATURE SUMMARYThe literature that is most relevant to our study deals with the relationship between entrepreneurial performance and founder's human capital - education and experience in particular - because according to human capital theory, education and experience are the most important determinants of intellectual performance and facilitate assimilating new knowledge and adapting to new situations (Weick, 1996; van der Sluis, van Praag, Vijverberg, 2008). Literature on the effect of general education on entrepreneurial performance is fairly extensive, but published articles on the effect of entrepreneurship-specific education on entrepreneurial performance are extremely rare. Due to space limitations, we present the following brief summary of what the literature tells us about the relationship between human assets and entrepreneurial performance. (An extensive literature review is available from the lead author.)SummaryGeneral education is related positively to entrepreneurial performance, especially in the USA. But empirical evidence relating entrepreneurship-specific education with performance is extremely scarce and not convincing. The literature on creativity and expertise leads to the conclusion that it takes 10 years to become an expert in any domain; which we infer also applies to entrepreneurship. …

Examining Minority Business Enterprises as Government Contractors

Abstract: The current study examines contracts awarded by Johnson Space Center to Minority Business Enterprises from 2005 – 2007 with the goal of better understanding the degree to which MBE status was associated with specific industrial categories when compared with non-minority enterprises. Using NAICS code categories, findings indicated that MBEs are more-likely to serve as contractors within Construction (NA23), Administrative, Support, and Waste Management (NA56), and Educational Services (NA61). Within these NAICS codes, Socially Disadvantaged Businesses (SDB) were significantly more likely to be Construction (NA23) and Administrative, Support, and Waste Management (NA56) firms than were the other minority groups. Women Owned Businesses (WOB) were the most likely providers of Educational Services (NA61). Metal Manufacturing (NA33) is characterized by significantly more non-minorityowned small businesses contractors.

Are Hispanic-Owned Businesses Different? an Empirical Study on Market Behavior and Risk Patterns of Hispanic-Owned Business Ventures

Abstract: Much of the research on the business risk and market behavior concerning Hispanic-owned businesses (HOB) has been limited. The purpose of this study is to measure and examine the market behavior and risk patterns of HOBs. The foundation for this study was established from key theoretical concepts grounded in accounting, economics, entrepreneurship, finance, marketing, and management literature. A sample (N = 201) of HOBs were examined for this comparative study, which consisted of two studies: a pilot study and formal study. This study used an exploratory factor analysis approach: a principal component analysis (PCA). The results of the PCA revealed there were major eight factors that affect HOBs in terms of business risk and market behavior.Keywords: Hispanic-owned businesses, market behavior, business risk, risk patterns, factor analysisINTRODUCTIONThe prior research on Hispanic-owned businesses is very limited. There is a need to conduct more research on HOBs. The limitation of the prior research and existing scholarly literature principally focuses on small business enterprises (SME) compared to Hispanic-owned businesses is quite extensive. This study took a different approach. The researchers wanted strictly focused on the market behavior characteristics ofHOBs.The survival rates for small businesses are quite alarming. This has been and continues to be significant, if not a challenging issue. As self-employment and the entrepreneurial spirit of business, ownership in America continues to proliferate. This new trend toward entrepreneurial interest trend has especially flourished in this new economy, "the information age. However, the questions are, are HOBs any different or have any behavioral patterns that are unique to them? That is what this study will investigate. The limitation of the prior research and existing scholarly literature on Hispanic-owned businesses needs further investigation.BackgroundThe Entrepreneurial Risk Survey (ERS) was pilot-tested on 73 HOBs in South Texas city. The data collected from the field test was used to evaluate and perfect the instrument in terms of question clarity, consistency, flow and construct before beginning the distributing the survey to the targeted population. In the process of developing and refining the instrument, a second study was conducted with a sample population of 128 HOBs. The pilot study was used to address issues with the instrument in terms of: (a) reliability and validity of the scales, (b) survey question clarity, (d) issues or inconsistencies with the survey questions, and (e) survey design and face validity issues of the instrument. This led to the further development of the Entrepreneurial Risk Assessment Scale (ERAS) instrument and the finalized version used for the second study. This will be discussed more in depth later in the article.Purpose of the StudyThe purpose of this study is to measure and examine the market behavior and risk patterns of HOBs. To achieve this objective, the following actions were taken: (a) the researcher pilot-tested the instrument developed by the researcher to measure market behavior and risk patterns with HOBs; and (b) analyze industry and market sector differences with HOBs. This study was built on the researcher's prior research on small business enterprises (SME). This study was built on key theoretical concepts grounded in economics literature. The objective of this study is to examine market behavior and risk patterns of Hispanic-owned business enterprises. This article used data drawn from two studies: (a) a pilot study with 73; and (b) a subsequent study with 128 Hispanic-owned business enterprises.MethodologyThe study utilized a quantitative approach using theoretical analysis of a sample of 201 Hispanic-owned businesses from an estimated population of 20,000. The target population varies across diverse industries, and demographic groups. …

TAILORING ENTREPRENEURSHlP EDUCATION: EXPLORING COMPONENTS OF ENTREPRENEURSHIP EDUCATION FOR UNDERREPRESENTED GROUPS

Abstract: Black-owned businesses represent 7.1% of U.S. businesses. White-owned businesses represent 83.4% of U.S. businesses. Similar gaps occur for Hispanics and women. The authors present two clusters of entrepreneurship education components. Three social facets, posited to be positively related to entrepreneurship self-efficacy, are expected to increase the likelihood of underrepresented groups to start a business. Three technical facets, proposed to be positively related to entrepreneurial and business acumen, are expected to be related to increased lifespan and performance of businesses owned by underrepresented groups. Implications and research recommendations are provided. INTRODUCTION The number of women-owned and minority-owned businesses in the United States (U.S.) is disproportionately less than the proportion of women and minorities in the U.S. Although women slightly outnumber men in the U.S. (U.S. Census Bureau, 2007), women-owned businesses represent only 28.7% of U.S. firms while male-owned businesses represent almost twice that many (U.S. Census Bureau, 2007) at 5 1 .3%. Similarly, although Blacks make up approximately 12.8% of the U.S. population (U.S. Census Bureau, 2007), only 7.1% of U.S. businesses are Black-owned (U.S. Census Bureau, 2007). Hispanics represent about 15.1% of US population but Hispanics only account for 8.3% of owned businesses (U.S. Census Bureau, 2007). These statistics, and others, are presented in Table 1. This disparity has long been documented (e.g., Bates, 1995). Although these gaps are decreasing, they remain despite government incentive programs designed to increase entrepreneurship of underrepresented groups. Although the disproportionately low percentage of women-owned and minority-owned businesses in the U.S. might lead one to conclude that these underrepresented groups do not aspire to business ownership, this is far from the case. When asked the question "Do you think you want to start a business of your own?" 75% of U.S. Black youth answered "Yes" (Walstad & Kourilsky, 1998: 9). More recent research has shown that Black undergraduate college students exhibit stronger entrepreneurial attitudes than do their White and Asian counterparts (Louw, van Eden, Bosch, & Venter, 2003). In fact, Blacks and Hispanice are much more likely to report wanting to start their own business than their White counterparts (Gartner, 2004). Similar research has shown a strong trend of entrepreneurial aspiration in women as well, in that 42% of U.S. teen girls surveyed indicated an interest in entrepreneurship (Wilson, Kickul, & Martino, 2007). More recently, Shinnar and her colleagues (Shinnar, Pruett, & Toney, 2009) found no statistically significant differences between male and female entrepreneurial aspirations among university students. Together, these studies provide strong evidence that business ownership of these underrepresented groups in the U.S. is far less than many individuals in these populations would desire. Why is there this disjuncture between entrepreneurial intent and actual entrepreneurship among women and minorities? Certainly a large literature embracing multiple theories has been established to account for the gap in Black entrepreneurship (Fairchild, 2008; Bogan & Darity, 2008), which has been persistent for over 100 years (Fairlie & Meyer, 2000). Similarly, many theories have been promulgated to explain why women continue to lag significantly in entrepreneurship despite overall gains in employment (AhI, 2006; Scherer, Brodzinski, & Wiebe, 1990). The resulting range of factors to explain this gap varies widely across macro-structural and economic, collective cultural, and individual cognitive factors. Yet, in the face of these manifold factors, there has been considerably less research into formulating a comprehensive entrepreneurship education model which addresses how underrepresented individuals can overcome these obstacles. …

Entrepreneurial Design: A Design Based Theory of Entrepreneurship

Abstract: In this paper the authors offer design theory as an alternative to both existing entrepreneurship processes and a theory of entrepreneur ship, consistent with the most commonly accepted definition of entrepreneurship. Design theory acknowledges and is built upon, social constructionist theory, is prescriptive, creative, and content free. The design theory framework is discussed in an entrepreneurial context, and two real-world cases, one from a professional design company, and one from an undergraduate entrepreneurship program are recounted to demonstrate the efficacy of the framework. INTRODUCTION Entrepreneurship as a field of studyhas often been in search of a defining framework. Without a defining framework, a field suffers from a lack of focus in its scholarship and application of knowledge generated. Entrepreneurship often borrows theories from other disciplines. Because of this, we discuss theories used in entrepreneurship as opposed to theories of entrepreneurship. One group of theories brought into the entrepreneurship field in its early scholarly development focused on entrepreneurial motivation. Maslow's (1968) hierarchy of needshas been used to explain the motivations of some entrepreneurs, and need for achievement (McClelland, 1961) is another classic concept that has been used to explain why some people but not others choose to become entrepreneurs. Other examples of motivational theories applied to entrepreneurship include disadvantage theory (Evans & Leighton, 1989) and vocational choice (Holland, 1985). As a group these theories give some insight into who becomes an entrepreneur and why they do so. However, they give no explanation into the processes that entrepreneurs use to select their competitive spaces, develop their business ideas, or launch and grow their businesses. Other theories seek to explain where business ideas come from and how they develop. For example, population ecology theory posits that ideas are fairly random in how they arrive. Many ideas are tried, most fail, and a few succeed (Aldrich & Martinez, 2001). Businesses are the market selected result of the successful idea. This explanation gives us a reasonable description of what happens that allows for new businesses to come into existence, but does not address the issue of how it happens. If entrepreneurship is to establish itself with other social sciences, it must define its domain of scholarly inquiry. Recognizing this obstacle to furthering research in entrepreneurship, Shane and Venkataraman (2000) concluded that the field at its essence is based on how people pursue opportunities. They state, "Consequently, the field involves the study of sources of opportunities; the processes of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit them" (Shane and Venkataraman, 2000: 218). By focusing on opportunity, the field can amass a body of work that separates it from other disciplines and provides entrepreneurship scholarship with a distinctive identity and expertise. Shane and Venkataraman offer their definition as a starting point for developing a "conceptual framework that explains and predicts a set of empirical phenomena not explained or predicted by conceptual frameworks already in existence in other fields" (2000: 217). Previous work examining the opportunity phenomena include Schumpeter's concept of "creative destruction" (Schumpeter, 1942: pp 81-86), Kirzner'sdescription ofentrepreneurial alertness (Kirzner, 1997, Shane, 2003), and the idea that opportunities are created by the entrepreneur's actions (Aldrich and Ruef, 2006). These landmark studies are descriptive in where opportunities come from and what entrepreneurs typically do in pursuing them. While useful in better understanding the opportunity phenomenon, a new line of prescriptive research is being developed that offers guidelines in how entrepreneurs should pursue opportunity. …

Entrepreneurial Learning and Business Assessment - What New Decisions Would Be Made after Learning?

Abstract: The purpose of this was to explore whether or not entrepreneurs learn from their experience in creating a new venture, how they assess their businesses, and what changes they would make if they were to start again. The results show that entrepreneurs do learn. Their assessment of the businesses showed some differences among entrepreneurs. We also explored how their assessment of their new venture was related to changes in future business ventures. Many entrepreneurs would make changes, particularly in management, marketing, and finance.INTRODUCTIONThe notion of entrepreneurship focuses on transformation. Entrepreneurial initiatives often lead to planned or unexpected changes in behavior and decisions. While researchers have identified entrepreneurs as the key to revolutionize economic and social development, it is not clear how entrepreneurs initiate such transformation associated with personal growth and enterprise formation. The primary learning theory has been established in the field of psychology since 1930s. Theories about human learning have been grouped into four broad perspectives: behaviorism, cognitive, humanistic, and social. Entrepreneurial learning, as discussed by many, seems to be a combination of these four perspectives; however, there has been limited empirical data to support conceptualized hypotheses.The purpose of this paper is to report some empirical findings related to entrepreneurial learning based on a large scale field survey. Previous literature concur that entrepreneurs posses a unique set of cognitive traits, including independence, locus of control, and seeking personal satisfaction as rewards (Liang & Dunn, 201 1; Liang & Dunn, 2010; Liang & Dunn, 2008). However it is still a puzzle in the entrepreneurship field regarding how entrepreneurs reflect on learning in the new venture formation process, and if entrepreneurial learning triggers transformation and changes in entrepreneurial behavior or decisions.Using the results of a survey with more than 500 entrepreneurs, we examine (1) if entrepreneurs assess business performance consistently across personal satisfaction and financial rewards; (2) how assessment of the business performance relates to entrepreneurial learning; and (3) if entrepreneurial learning indeed occurs, what entrepreneurs will do differently in the next new venture formation process; i.e. the transformation of individual behavior and decision linked to reflections on learning.The central aim of this study is to explore, in more depth, the parallel learning theories in psychology and entrepreneurship using empirical survey information. The results of the sample respondents should not be generalized to learning experiences for entrepreneurs. Our approach follows the Grounded Theory method which is to provide a systematic generation of theory from data that contains both inductive and deductive thinking (Glaser & Strauss, 1967; Glaser, 1992). The research questions we ask are "what has happened when entrepreneurs learn?" and "what would entrepreneurs do to reflect on their learning experiences?" The goal of this study is to verify the parallel learning theories in psychology and entrepreneurship with empirical evidence, which will contribute to creating more robust integrated research framework by linking psychology to entrepreneurship.LITERATURE REVIEWLearning TheoryHuman learning can be grouped into four perspectives: behaviorism, cognitive, humanistic, and social. Behaviorism focuses on observable behavior rather than on internal cognitive processes (Watson, 1931; Thorndike, 1932; Tolman, 1932; Guthrie, 1952; Hull, 1935; Skinner, 1938). The environment triggers the learning and behavior. The term "primary reinforcement of learning" or "reward" was first introduced by Torndike and later developed by Skinner. The basic concept of the primary reinforcement was the dominant paradigm of psychology from the early 1900s through the 1960s. …

The Need for Entrepreneurship in Journalism

Abstract: ENTREPRENEUR'S PERSPECTIVE The Entrepreneur's Perspective section of JBE will provide an opportunity for current practice to meet current thought, providing insight into what stimulates and drives successful ventures. We look to encourage and foster a free and constant exchange between entrepreneurs, the general public, and those researching and educating the next generation of entrepreneurs. Looking back at two years of teaching journalism entrepreneurs, the lesson that surfaces is this: They crave a connection to others like them. They also need money - earned or given. They want case studies, for ideas and guidance. They seek access to technology experts and marketing pros. But more than that, they need to know they aren't alone. "I seem to need a group to keep motivated." "Mentorship is what I needed and still need for my idea to become a success." These comments came from a survey of participants in entrepreneurial journalism workshops at The Poynter Institute, an independent, non-profit school considered among the best in the world for teaching journalism. For 36 years, Poynter has taught journalists, students, educators and media leaders the craft and values of the field, from reporting and writing to leadership during these times of dramatic change. Yes, there's endless guidance and advice online. But it isn't enough. "I'm getting sick of trawling, and there is a HUGE amount of BS by 'experts' on social media, etc., people who are just repeating the same old stuff. The reality is this is a hugely tough enterprise, and it's easy to give people advice from the cheap seats. Unless you're really doing it, you just don't know." Since 2010, Poynter has taught four workshops, each one week long, for journalism entrepreneurs. Grants funded the teaching, with the Ford Foundation providing the most support. The school's e-learning division, News University (www.NewsU.org) has launched related courses and webinars, and the school's media news site Poynter.org covers trends in the field. Newspapers have cut more than 12,000 newsroom jobs in the last four years. Some of those people found work in broadcast or online, but with employment options in traditional media limited, it's not surprising that those who came to Poynter's workshops remain committed to entrepreneurship. Even if they kept their day jobs, they want the option of working for themselves. More than half of Poynter's 80 entrepreneurial alumni responded to a survey, and all 48 said they were still involved in entrepreneurial journalism. Almost all (84%) are carrying out a project, while others are in the planning stages or searching for a venture. Are they making money? Not much. Half of those who had launched their venture and were willing to share information told us in November they expected to lose money in 2011. …

Pricing Practices in Very Small Businesses: A Replicative Study

Abstract: Pricing is an important decision in small business management. This paper explores the factors that impact small business owners/managers in setting and changing prices. Satisfactory profits, costs and competitors' decisions seem to be the basic factors that affect setting and changing prices among small business owners/managers. Additionally we explore non-price tools used by small business as an alternative way to compete. INTRODUCTION In 2010, the authors conducted a study of very small businesses in northeast Louisiana to determine if small firms use the established economic principles that economists rely on when explaining the behavior of large firms regarding pricing objectives and strategies. The original study was conducted with a sample of small businesses using a questionnaire designed to indicate respondents' agreement or disagreement with a series of questions regarding pricing practices. In reviewing the findings of this study, the authors felt that questionnaire used in the original study did not clearly reveal the true underlying values of small business owners/managers in making initial pricing decisions or really identify the factors that most influence owners/mangers to change previous pricing decisions. This replicative study is conducted in the same geographic area with a similar sample of small businesses, but with a questionnaire designed to force entrepreneurs to identify their basic values concerning initial pricing and indicate the relative importance among factors influencing changes in pricing. That is, instead of asking respondents to agree or disagree with each of the four alternatives in the statement, "When setting prices, I always try to maximize profits, make satisfactory profits, maintain market share, and cover variable costs, we ask respondents to make a single choice between the four alternatives that reflects their underlying concern in pricing products and services. We believe this type of questioning forces the respondent into revealing the most critical elements in the pricing decision process, and thus, provide us better insights into the pricing decision processes of owners/managers of very small businesses. BACKGROUND Large businesses use, probably because they have more information, established economic principles to develop goals, price strategies and similar management decisions. From microeconomics textbooks such as Hyman (2010) and Parkin (2012) to managerial economics textbooks such as Keat & Young (2009) and Thomas & Maurice (201 1), the basic principles of price theory have been well documented and thoroughly explained. General economic theory suggests that: a. The objective of the firm is to maximize profits. b. Optimal prices are chosen based on the demand the firm faces in order to at least cover variable costs and to meet the goal of profit maximization. c. Changes in the optimal price will occur in response to changes in costs or market conditions. d. Competition can be undertaken in ways other than price changes. Specifically, for example, Hyman (2010) states ". . .models based on the assumption that those who operate firms seek to maximize profits have proved to be very fruitful. These models have consistently yielded hypotheses that empirical evidence has supported." (Chapter 8, page 7) Parkin (2012) describes the pricing decision as "It (the firm) produces the quantity at which marginal revenue equals marginal cost and then charges the price that buyers are willing to pay for that quantity. . . " (p. 327). Thomas and Maurice (20 1 1 ) describe in considerable detail how firms typically respond to changes in costs (pp. 404-415) and changes in demand (pp. 476-477). They conclude that if costs increase, firms should reduce output and increase price. If demand increases, firms should raise output and raise price. Keat and Young (2009) describe the different ways that firms can compete other than through price. …

The Effect of External Social Resources on Firm Patent Performance: The Impact of Boards, Partnerships and Geographic Proximity

Abstract: We have a limited understanding innovation, specifically how research and development translates into patents. Prior research assumes that internal resources are preeminent, largely ignoring external factors. This paper reviews outside resources to assess their effect on firm innovation. Using a sample of firms at their initial public offering, it was found that partnerships with universities and firm geographic location improve innovative activity, while government grants and partnerships with large firms did not foster improved innovative activity. The Board of Directors has no significant main impact, but a negative interaction effect on innovative activity.Key words: innovative activity, research and development, patents, external resources, board of directors, initial public offering (IPO).INTRODUCTIONHigh technology entrepreneurial firms by definition, encounter environmental change as well as technological and market uncertainty (Kor 2003), and need continual innovation to improve their performance (Deeds, and DeCarolis, 2000). Innovation is a process that involves the creation of new technical ideas and the harnessing of new knowledge which requires human and financial resources (Somaya, Williamson and Zhang, 2007).The focal research question is which external factors foster enhanced innovation? Innovation process research frequently focuses on elucidating the effects of research and development (RD Hall and Ziedonis, 2001; Kim and Marschke, 2004). While RD this is followed by the hypothesis development. The methodology and variables measurement is subsequently detailed. The paper then provides a description of the data analysis, results and a discussion of findings and concludes with implications, limitations and future research directions.THEORETICAL DEVELOPMENTThe Resources of a Firm and the Value of External ResourcesAccording to Barney and Arikan (2002 p. 138), "A resource is defined as tangible and intangible assets that firms use to conceive of and implement their strategies". The resource-based view of the firm assumes that firms manipulate multiple internal and external resources that affect their performance (Barney, 1991; Barney and Arikan, 2002). Antecedents of firm performance include manipulation of resources to create innovations. Prior research has examined the effect of firm internal (Somaya et al. …

Young Ventures, Internationalization and Barriers to Growth

Abstract: The purpose of this paper is to shed some light on the determinants of rapid growth of firm start-ups. We consider both firm external and internal perspectives in a multilevel framework, and empirically test notions advocated by the theory of the firm, industrial economics, and economic geography. Our findings suggest that new venture growth is associated to early internationalization and the learning process of firms that are born small and grow fast. Contesting RBV premises, industry productivity growth and location economies seem to be a favorable environment for those firms that struggle to surmount the growth barriers they face.Key words: Firm growth, early internationalization, productivity growth, external economies.(ProQuest: ... denotes formulae omitted.)INTRODUCTIONAn increasing number of scholars and policy makers hold that the entrepreneurial ecosystem of a region plays a fundamental role for economic growth. Not only new and young firms constitute an important source of new jobs at the meso (or macro) level (Acs & Mueller, 2008; Stam, Suddle, Hessels, & Stel, 2008), but also, they transform innovative ideas into real business projects at the micro level (Acs, Braunerhjelm, Audretsch, & Carlsson, 2009). Nearly all net job creation in the United States between 1980 and 2005 occurred in firms less than five years old and, even without startups, an analysis for 2007 shows that young firms (defined as one to five years old) still account for roughly two-thirds of job creation (Stangler & Litan, 2009). Regions like Silicon Valley in the USA or Cambridge in UK suggest that an appropriate entrepreneurial ecosystem embedded in a territory seems to be crucial to nurture rapidly growing ventures (Bresnahan, Gambardella, & Saxenian, 2001). Reversely, although most firms do not grow much after start-up (Headd & Kirchhoff, 2009), the formation of high growth innovative ventures is a sine qua non condition to boost a competitive region (Acs & Mueller, 2008; Stam, Suddle, Hesseis, & Stel, 2008). Are the firm-internal distinctive competences of a young organization what determine venture grow? Is it rather the local environment what matters? Or perhaps a combination of both, and if so, what is the weight of each? These questions remain still unanswered in the entrepreneurship literature. A study on the nexus of the micro-level (that is, individual start-up firm level) and meso-level (that is, entrepreneurial ecosystem level) of analysis of entrepreneurship, becomes necessary to better understand the development and evolution of an endogenous mechanism which allows for rapid venture growth and regional economic growth (Braunerhjelm, Acs, Audretsch, & Carlsson, 2010).Conventional wisdom suggests that in the new century the largest portion of new jobs in developed economies is generated by a small number of rapidly growing firms, frequently young and small size ventures, often known as 'gazelles' (Henrekson & Johansson, 2009). Despite the unquestionable economic impact of rapidly growing young ventures, little is known on the factors driving their rapid growth path. Our conjecture is that factors describing both micro and meso levels of analysis matter for surmounting growth barriers faced by young ventures.More studies are needed to gain a better understanding on the success factors that determine the fast growth path of young ventures. We contribute to the field of high growth entrepreneurship in three ways. First, industrial economists have widely analyzed the effect of entry barriers and survival barriers on venture performance. To our knowledge, little attention has been paid to the study of obstacles growth barriers) faced by entrepreneurs in their attempt to achieve rapidly high growth for their start-up businesses. Secondly, most studies examine separately either firm external factors (environmental perspective) or firm internal factors (organizational view), offering in most instances a partial view of the venture high growth phenomenon. …

Mission, Ministry, & Margin: The Case of Restore Ministries and the YMCA

Abstract: The Restore Ministries case presents the story of a social entrepreneur, Scott Reall, who successfully created Restore, a behavioral healthcare venture, within the YMCA. Despite the initial collaborative success, Restore was at a crossroad. Growth following a "ministry mindset," a mindset in which the goal was to meet everyone 's needs regardless of their ability to pay, had produced an inconsistent fee structure, confusion among stakeholders, and branding questions. It also created concerns over business model scalability and sustainability. A key question was whether Restore and the Y were adequately prepared to undertake Reaall's vision to the next stage of growth?Keywords: Social entrepreneurship, opportunity, growth, sustainability, business modelINTRODUCTIONScott Reall, Director of Restore Ministries, sat alone in the somewhat dimly lit, cavernous community room of the Green Hills YMCA Youth Center in Nashville, Tennessee. The building was relatively empty this early hour in the morning. Projected onto the empty white wall was the current version of a strategic plan that was being prepared for the board of Restore Ministries (Restore), a sponsored program of the YMCA of Middle Tennessee, a member organization of the national YMCA. Reall was joined a few moments later by Rebecca and Charity who served as Head Counselor and Head of Group respectively, and by Victor Enzork, an outside management consultant engaged to guide the Restore team in their strategic planning. Reall approached Enzork eight months earlier and was frustrated by the fact that Restore had previously commissioned three previous strategic plans for growth and saw no benefit from any. Both agreed that the previous attempts lacked clear definition with respect to goal alignment between Restore and the YMCA, and failed to develop an actionable growth plan that Restore's staff could understand and support.Over the last eight months, Reall worked closely with his program team, senior managers of the Greenhills YMCA, and key executive staff of the corporate YMCA of Middle Tennessee. Under Enzork's guidance, the goal was to develop a strategic plan that would capture Read's vision of hope and healing for those "whose aches and longings run much deeper than the physical" (Newman, 2008). He felt strongly that the steps which helped him overcome his own spiritual and emotional struggles would also benefit others and was very consistent with the notion of "wholeness" reflected in the YMCA's emphasis on mind, body, and spirit. Of great importance to Read, was the ability for Restore to build strong operational capabilities. Read's underlying hope was that the plan would enable Restore to scale its efforts within the operations of the YMCA of Middle Tennessee. Moreover, he believed that the process he followed could be first replicated throughout the Middle Tennessee YMCA. Next, he hoped to make it widely available through the YMCA's national network. Longer term, he envisioned Restore services being offered outside the YMCA system.Despite ad the analysis and preparation work that had been done to that point, Read still had one major concern. Read believed Restore's relationship with the YMCA had always been one of the greatest resources toward fostering its growth. Yet the very program growth Read envisioned was now creating confusion and straining operations to a level he felt was simply too much for himself, as one person, to bear. Simply put, his intuition was that the relationship between Restore and the Y was at an important crossroad. Enzork shared Read's concern. He felt Restore had the potential to be a critical component in the delivery of the YMCA of Middle Tennessee's mission, particularly given its 'hope for life' initiatives. For both Read and Enzork, the real question was what should Read do to take his vision to the next stage of growth given his enduring desire to build Restore through the YMCA?History of the YMCA1The YMCA was founded in 1844. …