Showing papers on "Entrepreneurship published in 1992"

Price, Quality and Trust: Inter-firm Relations in Britain and Japan

Abstract: List of figures List of tables Acknowledgements Introduction Part I. Theory and Concepts: 1. A spectrum of transactional patterns: from ACR to OCR 2. Trust and organisational efficiency Part II. Case Studies and Survey: 3. Setting the scene 4. JJ Electric, GB Electronics and TCP (UK) 5. The analysis of supplier companies Part III. Explanations of Variations: 6. Economic and technological factors 7. The legal framework 8. Banks and financial links 9. Employment system links 10. Entrepreneurship, and the dynamics of small firm creation Part IV. Outcomes and Implications: 11. How ACR-P OCR patterns relate to competitiveness 12. Conclusions Appendix Notes Bibliography.

Venture Capital at the Crossroads

Abstract: Venture capital (VC) has had a profound impact on the U.S and world economies. The landmarks of venture capitalism are the formation of the venture capital fund ARD in 1946 and the establishment of small business investment companies by the U.S. Small Business Administration in 1958. After a boom in the 1960s, the VC industry all but collapsed between 1970 and 1977. The VC industry revived in the 1980s and reached a peak in 1987 from which it declined. At the moment of its decline in 1990, the industry was radically altered and transformed and was at a crossroads from its recent shake-out. This book examines the state of the VC industry at this point in 1990, examining current trends, developments, and practices, and looking at future prospects for the industry, suppliers, and users of risk capital, as well as the nation's economy as a whole. The VC industry has been transformed by two changes. (1) New and specialized financial and investment strategies emphasize deal making, transaction crafting and closing, fee generating, and short-term gains. This "merchant capital" approach is oriented to investing in established firms, as opposed to the classic VC approach of providing equity financing in new, emerging, innovating, and technology-based firms. This change may be due to professionals entering the field from MBA backgrounds rather than business-building backgrounds. (2) The altered market has resulted in reduced opportunities, globalization, increase in available capital, and dominance of institutional money, and the VC industry is losing its classic company-building skills. The major virtue of the traditional VC industry, which has been a wellspring of innovation and great rewards, is the skills brought by the venture capitalists that add value in the firm's forming, building, and harvesting. Changes in the VC industry are seen in an explosion of investing activity, heterogeneity of industry structure, niche funds, declines in rate of return, and increased competition and shake-out. Examples of classic revolutionary industries financed by VC are the semiconductor, computer, and biotechnology industries. Some lessons from these industries are drawn. Lessons are also drawn from the case of the Winchester disc-drive industry, which represents a case of "capital market myopia." Historical VC returns have been in the 10% to 20% range, occasionally in the 20% to 30% range, and rarely higher. The main reason for the unsatisfactory returns on VC since 1983 has been the initial public offering (IPO) drought. The benefits and implications for the VC industry of syndicated investments are examined. The contribution of VC to economic development is explored in terms of internal and external factors. Some high-tech regions were not planned; some planned regional centers have failed. Three factors affect the flow of VC: investors who put up the money, entrepreneurs who form the company, and the venture capitalists. The value-added of classic VC investment lies in the guidance, contracts, know-how, and support of the backers. The relationship between the venture capitalist and management team critically affects the success of the venture. Also examined are relationships between flows of VC and public policy, capital markets, new technologies, and changes in industries. Most important in fostering VC are government policies. Since VC is vital element to entrepreneurship, the U.S. must actively foster classic venture capital by changing some national attitudes and policies in culture, education, and role of government, for which recommendations and suggestions are offered. (TNM)

Acting as If: Differentiating Entrepreneurial from Organizational Behavior:

Abstract: This paper suggests that entrepreneurship is the process of “emergence.” An organizational behavior perspective on entrepreneurship would focus on the process of organizational emergence. The usefulness of the emergence metaphor is explored through an exploration of two questions that are the focus of much of the research in organizational behavior: “What do persons in organizations do?” (we will explore this question by looking at research and theory on the behaviors of managers), and “Why do they do what they do?” (ditto for motivation). The paper concludes with some implications for using the idea of emergence as a way to connect theories and methodologies from organizational behavior to entrepreneurship.

The “Austrian” School of Strategy

Abstract: Although traditional industrial organization continues to serve as one of the conceptual foundations for strategic thinking and research, many of its premises have come under widespread criticism. Industrial organization largely ignores, despite their importance, change, uncertainty, and disequilibrium in the business environment. Because these fundamental characteristics are cornerstones of the Austrian School of Economics, this doctrine offers unique strategic perspectives. The Austrian emphasis on “the market process” and entrepreneurial discovery establishes a framework for both strategy formulation and research.

Gaining the upper hand: Economic mobility among immigrant and domestic minorities

Abstract: Labour market experiences of three immigrant minorities in the United States are reviewed and contrasted with the three principal theories bearing on ethnic poverty and economic mobility: cultural assimilation, human capital acquisition, and industrial restructuring. Although there is support for each, they do not account satisfactorily for the experiences of many ethnic groups, in particular those who have progressed on the basis of socially embedded small entrepreneurship. An alternative conceptualization is suggested by these experiences that highlights the significance of community level variables and, in particular, alternative sources of social capital. The character of these processes is examined. Its implications for theories and policy towards ethnic minorities are discussed.

Toward a theory of the political entrepreneur: evidence from local government

Abstract: Political scientists have been increasingly interested in entrepreneurs—individuals who change the direction and flow of politics. In this research note, we synthesize aspects of an economic approach to entrepreneurship with concepts used in political science. We then tie these theoretical observations to the emergence of entrepreneurs in local governments and test components of our theory using observations from a large set of suburban municipal governments. Empirically, we identify several conditions that affect the probability that an entrepreneur will emerge in a local government, especially slack budgetary resources that the political entrepreneur can reallocate. We also find that the probability with which an entrepreneur is found in local government is a function of the difficulty of overcoming collective action problems in a community.

Beyond business process redesign: redefining Baxter's business network.

Abstract: Business process redesign has focused almost exclusively on improving the firm's internal operations. Although internal efficiency and effectiveness are important objectives, the authors argue that business network redesign--reconceptualizing the role of the firm and its key business processes in the larger business network--is of greater strategic importance. To support their argument, they analyze the evolution of Baxter's ASAP system, one of the most publicized but inadequately understood strategic information systems of the 1980s. They conclude by examining whether ASAP's early successes have positioned the firm well for the changing hospital supplies marketplace of the 1990s.

The Entrepreneur and the Initiation of New Venture Launch Activities

Abstract: Much of the previous research attempting to relate traits of the entrepreneur to new venture creation has failed to demonstrate a definitive linkage. This failure should not impugn the importance o...

Bootstrap finance: the art of start-ups.

Abstract: Entrepreneurship is more popular than ever: courses are full, policymakers emphasize new ventures, managers yearn to go off on their own. Would-be founders often misplace their energies, however. Believing in a "big money" model of entrepreneurship, they spend a lot of time trying to attract investors instead of using wits and hustle to get their ideas off the ground. A study of 100 of the 1989 Inc. "500" list of fastest growing U.S. start-ups attests to the value of bootstrapping. In fact, what it takes to start a business often conflicts with what venture capitalists require. Investors prefer solid plans, well-defined markets, and track records. Entrepreneurs are heavy on energy and enthusiasm but may be short on credentials. They thrive in rapidly changing environments where uncertain prospects may scare off established companies. Rolling with the punches is often more important than formal plans. Striving to adhere to investors' criteria can diminish the flexibility--the try-it, fix-it approach--an entrepreneur needs to make a new venture work. Seven principles are basic for successful start-ups: get operational fast; look for quick break-even, cash-generating projects; offer high-value products or services that can sustain direct personal selling; don't try to hire the crack team; keep growth in check; focus on cash; and cultivate banks early. Growth and change are the start-up's natural environment. But change is also the reward for success: just as ventures grow, their founders usually have to take a fresh look at everything again: roles, organization, even the very policies that got the business up and running.

The State of the Art of Entrepreneurship

Abstract: Part 1: Entrepreneurship education. Part 2: Entrepreneurship and economic development. Part 3: Entrepreneurship research: linkages and methodology. Part 4: Entrepreneurial firm growth and financing. Part 5: International entrepreneurship. Part 6: Research needs and issues for the 1990s.

The Operation of Intentions in Time: The Emergence of the New Venture:

Abstract: Entrepreneurs’ timeframes for the birth and early development of new ventures offers a new lens for understanding the psychology and social construction of new organizations. This paper reviews the...

Sociology and Entrepreneurship: Concepts and Contributions:

Abstract: Sociological perspectives and research provide important and distinctive contributions to the understanding of entrepreneurship in three ways. The first is through the development of societal conce...

Research at marketing interface to advance entrepreneurship theory

Abstract: The knowledge base for the emerging field of entrepreneurship should be interfunctional and interdisciplinary. Yet the functional discipline of marketing has contributed to the entrepreneurship fie...

What Happened before the Organization? A Model of Organization Formation:

Abstract: This paper attempts to explain the observations that not all Individuals have the potential to found organizations, and that of those who do, not all try or succeed. Three dimensions to organizatio...

A decision theory model for entrepreneurial acts

Abstract: The decision to become an entrepreneur is considered as an alternative to wage labor. The potential entrepreneur evaluates whether there are positive expected net present benefits of entrepreneursh...

An Inter-Industry Examination of the Impact of Owner Experience on Firm Performance

Abstract: INTRODUCTION In most areas of managerial endeavour, the experience of an individual is seen to have an important influence on that person's performance. Prescribed educational requirements, apprenticeships, conventional career paths stemming from entry-level positions, and professional development programs are common features in many organizations, and are designed explicitly to standardize performance by standardizing individuals' experience with work-related activities. However, requirements and programs such as these do not exist for business owners. The backgrounds of business owners are heterogeneous, which has led to the suggestion that differences in the experiences of owners might explain variance in the performance of their firms. The question of whether owners' experience impacts firm performance is an important one. There are implications for lenders, policy makers, educators, researchers and business owners themselves if experience, or certain kinds of experience, are found to be predictive of firm performance. The relevant types of experience could be used as criteria in evaluating business plans or loan applications, and as a basis for tailoring development, incubation, and educational programs aimed at business owners. They could also be used as control variables in further research on the factors that influence firm performance. In addition, prospective and new business owners would have some criteria against which to assess their own readiness for ownership or to identify further experience which they might want to develop, as well as gaining insights on ways to capitalize on the experience they do have, such as entering certain industries. There is evidence that individuals who finance new ventures weigh the owners' experience significantly when making financing decisions (Goslin and Barge 1986; MacMillan, Siegel and SubbaNarasimha 1987); yet, studies which seek to find a direct relationship between experience and performance have found mixed results. Reuber, Dyke, and Fischer (1990) argue that such mixed findings may be due to the fact that various kinds of experience are relevant to entrepreneurship, and that the relevance of a specific kind of experience may vary in different contexts, such as in different industries. This argument is supported by findings which indicate that different types of management practices are used in different industries (Covin, Slevin, and Covin 1990). Thus, to develop a fuller understanding of the impact of experience on firm performance, it is important to study a variety of types of experiences and to investigate their impact across industries. This is the objective of this study. This article reports the findings from a project that collected data on firm performance and seven kinds of owner experience from firms in five different industries. In the next section, the previous literature on experience and performance is reviewed, in order to highlight the experience variables examined. Following the review is a discussion of the research method used and the results. The article concludes with a discussion of the implications of the findings. PREVIOUS LITERATURE ON EXPERIENCE Previous studies which have examined the relationship between the experience of the owner-manager and firm performance are summarized in table 1. The kinds of experience studied are shown in the table. Most of these relate to experience acquired before ownership of the current firm. Individuals with previous management experience are generally found to own more successful firms, although the relationship was insignificant in two of the studies shown. The results are more mixed for owners with previous industry experience (prior work experience in firms which provide the same products or services as does the current firm). Examining only one type of firm (technology-based companies and educational software companies respectively), Keeley and Roure (1990) and Van de Ven, Hudson, and Schroeder (1984) did not find a significant relationship between industry experience and firm performance. …

Strategic management's potential contributions to a theory of entrepreneurship

Abstract: The article offers an overview of strategic management and its various schools of thought, followed by a summary of the field of entrepreneurship and its own disagreements over definition and bound...

Entrepreneurial Stress: Is it Hazardous to Your Health?

Abstract: Entrepreneurship is playing an increasing role in the U.S. economy. Kirchoff and Phillips (1988) reported that small firms are the major source of new job creation. New business ventures accounted for 55% of new jobs between 1970 and 1980 (Hoy and Carland, 1983). New firm creation enhances economic growth and expansion. However, entrepreneurship is a risky process; while more than five hundred thousand businesses are started each year, only one in five survives for ten years (Wall Street Journal, 1982: 15). Recognizing the need to understand the nature of this influential business segment, researchers have begun to focus on the nature of entrepreneurship. For purposes of this study, an entrepreneur is defined as one who innovates, creating a new business and assuming full authority and control of the venture (Cunningham and Lischeron, 1991). Although an entrepreneur clearly has managerial responsibilities, the venture creation process adds a unique element to entrepreneurship. Do entrepreneurs experience high levels of stress in the initiation and management of a new business? The three research questions posed by this study are: 1. Is the nature of entrepreneurial stress different from managerial stress, 2. What factors in venture creation and growth are related to entrepreneurial stress, and ? 3. Do personality and behavioral characteristics moderate the relationships between en-trepreneurial stressors and health and job satisfaction? What causes stress? Kahn et al. (1964) and Kahn and Quinn (1970) view stress as a function of discrepancies between one's expectations and one's ability to meet demands, and discrepancies between the individual's expectations and his/her personality. When one is unable to fulfill one's role demands, stress occurs. To the extent that entrepreneurs' work demands and expectations exceed their abilities to perform as venture initiators, they are likely to experience stress. However, entrepreneurs and their role demands differ from those of managers as the next section shows.

Critical Success Factors in Winning BOT Contracts

Abstract: The build-operate-transfer (BOT) concept represents a step forward in meeting the needs of developing countries for more capital investments in infrastructure and industrial construction. However, for a private-sector consortium bidding for a BOT concession, the road to winning a major BOT contract is not easy. The consortium must be willing to take calculated risks and at the same time be adaptable to changing demands and circumstances in the host country. This paper describes the importance and characteristics of six critical success factors (CSF) that are vital for project sponsors in their endeavors to win lucrative BOT contracts. These factors are: entrepreneurship, picking the right project, a strong team of stakeholders, an imaginative technical solution, a competitive financial proposal, and the inclusion of special features in the bid.

The Entrepreneurial Venture

Abstract: Examines the concepts and emerging issues in entrepreneurship. The text argues that venture creation requires planning and skill as well as inspiration and portrays the entrepreneur as the ultimate general manager, responsible for orchestrating the relationships among all parts of the enterprise.

Idiosyncratic Milieus of Entrepreneurial Research: The Need for Comprehensive Theories

Abstract: Considers one approach to the selection and adoption of new research tools and theories for topics in entrepreneurship which have proved difficult to study. Eight topics are identified as challenging to study because the person or event is difficult to find. Included in these topics are consistently entrepreneurial firms, habitual entrepreneurs, and emergence of new industries. The difficulty in finding these events or people is a result of their obscurity. This obscurity can be explained through two factors: event history of the entrepreneurial action and event privacy. An examination of other fields of study which must analyze obscure events is used to identify methods that may be useful in the study of entrepreneurship. Focus is on the field of epidemiology, but it is suggested that the fields of criminology, history, archeology, and paleontology might also be helpful. There are two types of ideas that can be adopted from these other fields: theories and methods. The adoption process can be direct, or it can be metaphorical; this analysis supports the metaphorical adoption of ideas. Five lessons from these other fields are presented: (1) need to have hypotheses waiting to be tested; (2) need to become comfortable using models and homomorphs; (3) need to have common measures; (4) need to build competing theories; and (5) need for comprehensiveness. Using the approach identified, the study of entrepreneurship can move toward theory building. (SRD)