Showing papers on "Entrepreneurship published in 1993"

Marketing Places: Attracting Investment, Industry, and Tourism to Cities, States, and Nations

Abstract: Today's headlines report cities going bankrupt, states running large deficits, and nations stuck in high debt and stagnation. Philip Kotler argues that thousands of "places" - cities, states, and nations - are in crisis, and can no longer rely on national industrial policies, such as federal matching funds, as a promise of jobs and protection. The authors show that places must, like any market-driven business, become attractive "products" by improving their industrial base and communicating their special qualities more effectively to their target markets. From studies of cities and nations throughout the world, Kotler offer a systematic analysis of why so many places have fallen on hard times, and make recommendations on what can be done to revitalize a place's economy. He shows how "place wars" - battles for Japanese factories, government projects, Olympic Games, baseball team franchises, convention business, and other economic prizes - are often misguided and end in wasted money and effort.The hidden key to vigorous economic development, the author argues, is strategic marketing of places by rebuilding infrastructure, creating a skilled labour force, stimulating local business entrepreneurship and expansion, developing strong public/private partnerships, identifying and attracting "place compatible" companies and industries, creating distinctive local attractions, building a service-friendly culture, and promoting these advantages effectively. Strategic marketing of places requires a deep understanding of how "place buyers" - tourists, new residents, factories, corporate headquarters, investors - make their place decisions. With this understanding, "place sellers" - economic development agencies, tourist promotion agencies, mayor's offices - can take the necessary steps to compete aggressively for place buyers.

Entrepreneurship and the concept of fit: A model and empirical tests

Abstract: This paper reports the results of a study designed to investigate entrepreneurship and 'fit' in small and medium sized high technology manufacturing firms. A normative model of fit has been developed, which including the variables of entrepreneurial style, organizational structure, and mission strategy, determines a measure of the firm's fit with its environment. The normative model of fit proposed here is based on variables and relationships found to be important in previous empirical studies. Data on environmental turbulence, entrepreneurial style, organization structure, mission strategy, and financial performance were collected from 82 manufacturing firms. A measure of fit was calculated for each firm. Findings indicate that performance among firms was positively related to the measurement of fit. In short, fit is an important construct for firm success. Implications include prescriptive guidance to assist practitioners in diagnosing and correcting 'misfit' for individual firms.

A Conceptual Model of Entrepreneurship as Firm Behavior: A Critique and Extension:

Abstract: The study of firm-level entrepreneurship Is fast becoming a central Issue In the literature. Research on the topicshows Increased vitality and rigor. Recently, Covin and Slevin (1991) have suggested an Integrative model that explains the association between a company's entrepreneurial posture and Its external environment, strategy, Internal factors, and organizational performance. This article highlights several areas wherethe Covin-Slevin model should be revised and extended to better capture the nature of entrepreneurial behavior as well as Its antecedents and consequences.

An Interactive Model of the Corporate Entrepreneurship Process

Abstract: A review of the intrapreneurship and entrepreneurship literature suggests that there may be consistent organizational and Individual characteristics that lead to intrapreneurial behavior. To date, very little research exists which attempts to establish a theoretical framework or model that outlines the various components, Including Individual and organizational characteristics that affect the corporate entrepreneurship process. This paper proposes a model that explains the intrapreneurial process based on a review of past theoretical and empirical research.

Challenges to theory development in entrepreneurship research

Abstract: Why do some new ventures succeed while others fail? What is the essence of entrepreneurship? Who is most likely to become a successful entrepreneur and why? How do entrepreneurs make decisions? What market, regulatory, and organizational environments foster the most successful entrepreneurial activities? Entrepreneurship research is plagued by these and other fundamental unanswered questions, for which there does not exist a cohesive explanatory, predictive, or normative theory. In this article we identify major challenges for entrepreneurship theory development, and offer insights into promising directions for future research. Our conclusion suggests that it may be too ambitious to expect a complete and robust theory due to the interdisciplinary nature of entrepreneurship. However, we show that by integrating perspectives and by applying analytic, empirical and experimental tools from a range of fields, some of the fundamental questions can be answered.

A Factor Analytic Study of the Perceived Causes of Small Business Failure

Abstract: The important role of small business in the U.S. economy suggests that an understanding of why firms fail (and are successful) is crucial to the stability and health of the U.S. economy. Robinson and Pearce (1984) recognized a growing interest, statewide and on the federal level, in identifying factors associated with the conduct and performance of small firms. An understanding of such factors would enable public policymakers and small business advisors to better serve the small business sector. Cochran (1981) suggests that research on business failure for subgroups of the small business sector would prove useful, and that research on business failures for specific industries in regions might be more useful than studies that are national in scope. Consistent with the advantages cited by Robinson and Pearce (1984), and Cochran (1981), the focus of this study is limited to a single industry within one region of the country. An analysis of the distribution of the total U.S. small business population identified retail trade as the largest sector of the small business industry (Handbook of Small Business Data 1988). In terms of specified kinds of retail businesses, the most current Census of Retail Trade for Iowa (1982) lists apparel and accessory stores as the most numerous types of retail establishments. This article, therefore, presents the results of a study that examined perceived causes of small business failure in the apparel and accessory retailing industry. Such research would be useful in identifying practices to be avoided and in aiding educators, consultants, and small business support agencies in meeting the needs of the small business community. REVIEW OF THE LITERATURE Recognizing the dynamic relationship between the firm and its operating and environmental characteristics, Keats and Bracker (1988) proposed a conceptual model of small firm performance. This model suggests that performance outcomes are a function of many variables, including individual owner characteristics, owner behaviors, and environmental influences. Their model, grounded in strategic, entrepreneurship, and organizational theory, transcends the belief that small firms are merely miniature versions of large businesses and recognizes small firms as unique entities. According to Keats and Bracker (1988), small firm performance is influenced by multiple constructs which have been labeled as "Entrepreneurial Intensity" (entrepreneurial characteristics and behaviors which differentiate entrepreneurs from other individuals); "Task Motivation" (intensity of entrepreneurial motivation to attain goal achievement); "Perceived Strength of Environmental Influences" (strategic choices and reactions in response to environmental elements); "Behavioral Strategic Sophistication" (acquisition and implementation of sophisticated strategic management practices); "Cognitive Strategic Sophistication" (comprehension and integration of strategic management practices); and "Task Environment Factors" (structure of the industry in which the organization operates). These six constructs have been proposed as substantial influences of small firm performance outcomes. Performance outcomes in the Keats and Bracker model includes a number of interpretations and measures including financial performance. The Keats and Bracker model is meant to provide a basis for explaining how owner characteristics, behaviors, and contextual factors relate to small firm performance. Small firm performance has been studied from a variety of approaches to better understand why some firms fail and why others succeed. Weitzel and Jonsson (1989) discuss business failures as being the last stage of an organization's life cycle. Organizational decline, leading to failure, is characterized by managers who have become reactionary. The result is inadequate or non-existent planning and inefficient decision-making. One of the earliest empirical studies (Larson and Clute 1979) examined the role of various owner and firm characteristics to explain business failures. …

Entrepreneurship and Dynamic Capitalism: The Economics of Business Firm Formation and Growth

Abstract: The Dynamics of Economic Growth Dynamic Capitalism's Conflict with General Equilibrium Economics Schumpeter's Theory of Creative Destruction The Dynamic Capitalism Typology Data Systems to Support Dynamic Capitalism Data Foundations for Measuring Firm Dynamics Evidence of Dynamic Capitalism in the U.S. Economy Entrepreneurial Success: New Firm Survival Measuring New Firm Formation and Economic Growth The Future of Dynamic Capitalism References Index

Small Firms and Entrepreneurship: An East-West Perspective

Abstract: The present analysis brings together a series of studies across a spectrum of selected countries in developed Western nations and Eastern Europe to identify the exact role of small firms, and how that role has evolved during the fifteen years preceding the publication of the book in mid-nineties. The studies included provide systematic evidence on the following issues: first, the role of small firms and the extent to which they account for economic activity, and how this varies across nations; second, how the role of small firms varies across sector and industries; third, whether the firm-size distribution has shifted towards or away from small businesses. Results emerging from the present studies indicate that a consistent shift away from large firms and towards small businesses has occurred within the manufacturing sector of all Western countries in the time period under discussion. In contrast, Eastern European countries had experienced a shift away from small enterprises. The major challenge for political and economic reform in Central and Eastern Europe that emerges from these analyses is how to create the strong entrepreneurial sector which exists in the West. Chapters 2 through 7 focus on the role of small firms in the economies of the United States and Western Europe (UK, West Germany, Netherlands, Portugal and Italy). Among the findings: New business formation in the 1980s in the United Kingdom had led to a significant increase in the number of businesses in the service sectors, but not nearly as much increase in manufacturing. Small firms in West Germany are not a source of dramatic job generation. The decrease in average firm size for the West German economy as a whole can more or less completely be explained by the change in sectoral composition. When the employment measure is used, no significant shift in the size of firms in the overall US economy between 1976 and 1986 is noticed. However, when the sales measure is used, a slight trend towards smaller firms can be identified. By contrast, within the manufacturing sector a pronounced shift away from large firms and towards small businesses had occurred. This trend is less apparent when the employment measure is used, but much stronger when the sales measure is applied Smaller firms have provided the bulk of employment in the Netherlands, and there has been a shift towards an increased importance of smaller-scale enterprises? In Portuguese manufacturing, entry barriers, namely economies of scale and product differentiation, had a negative impact on small-firm intensity, and small firms avoided export-oriented industries that are characterized by more intense competition. In the Italian economy there has been great turbulence among small firms. While small firms have persisted since the early 1950s, there has been recent growth, structural changes in the economy, and changes in relationship with large firms. Chapters 8 through 10 focus on Czechoslovakia, East Germany and Poland, respectively. The examination of the role of small firms in Czechoslovak manufacturing offers an alternative to the often fallacious description of firm behavior in the command economy as a strict government controlled hierarchical structure, through an analysis of Czechoslovak manufacturing firms within the context of the economic strategy based on the returns to scale paradigm. The enterprise structure of the past in East Germany has been changing rapidly; this study emphasizes which specific preconditions should be promoted in order to facilitate a vital entrepreneurial sector. A chapter on the implications of the Polish economic reform for small business adds to the discussion of the development of small business in Poland during the transformation from central planning to a market economy, using a sample of small businesses in the area around and including Gdansk. The final ch

Entrepreneurship in Regional and Local Development

Abstract: This article surveys the topic of entrepreneurship within the processes of regional and local development. The issue of entrepreneurship is complex, and the interest in it shown by researchers and ...

Entrepreneurial Start-up and Growth: A Classification of Problems:

Abstract: The purpose of this study was to develop a classification scheme for the types of problems encountered by emerging organizations using an open-ended approach to generating the Initial response data...

A Constructivist Framework for Understanding Entrepreneurship Performance

Abstract: This paper outlines a constructivist framework for understanding the outcomes of the entrepreneurial process. The core thesis of the paper is that, taken alone, neither the personality of the entrepreneur nor the structural characteristics of the environment determine the outcome. Rather, it is argued that the outcome of the entrepreneurial process is emergent from a complex interaction between the entrepreneur, the environment, chance events and prior performance. The framework is illustrated with evidence from biographies of six entrepreneurs involved in successful processes.

Venturing into Foreign Markets: The Case of the Small Service Firm

Abstract: The study contrasts foreign market entry behavior of small and large service firms. The sample consisted of 141 firms of which 54 were small firms and 87 were larger firms. The study provides empir...

Entrepreneurs' Problem-Solving Styles: An Empirical Study Using the Kirton Adaption/innovation Theory

Abstract: Entrepreneurship has become a subject of research interest as scholars strive to learn what characteristics, cognitive styles, and behaviors identify a potentially successful business initiator, how entrepreneurs survive the early years of a risky venture startup, and finally how they make the transition to a professionally managed business. Past recent research has focused on entrepreneurial characteristics and personality profiles (e.g., Hornaday and Aboud 1971; McClelland 1965; Sexton and Bowman-Upton 1986, 1990). Other research has focused on the differences in decision-making styles of managers and entrepreneurs. Begley and Boyd (1986) found that entrepreneurs exhibited higher risk-taking propensity than small business managers. Hoy and Carland (1983) found entrepreneurs to be more perceptive and flexible while small business owners were more logical and methodical in their decision making. In a comparison of the decision-making approaches used by entrepreneurs and managers of larger firms, Smith, Gannon, Grimm, and Mitchell (1988) found that the managers used a more rational approach than did the entrepreneurs. Finally, Swayne and Tucker (1973) argued that entrepreneurs are more innovative than managers in seeking ways to expand their business or start new ones. While research investigating entrepreneurs' unique personality attributes and actions to solve problems has contributed to our understanding of the entrepreneur, it sheds little light on how entrepreneurs approach the challenges of venture initiation. More recently, research has shifted to an examination of entrepreneurs' cognitive styles. ENTREPRENEURIAL COGNITIVE STYLES A number of other researchers have examined the relationship between decision styles and (1) subsequent behaviors and (2) firm performance. Hoy and Hellreigel (1982) applied the Kilmann and Herden (1976) model of organizational effectiveness criteria to small business. The underlying premise of this model (based on Jung's theory of psychological types) is that managers perceive and solve problems in different ways, depending on their preferred problem-solving style. Hoy and Hellreigel (1982) found that the majority of their participants were characterized by a logical, analytical thinking process with a focus on the specific details of the situation. Brodzinski, Scherer, and Weibe (1990) found that entrepreneurs' decision style, again defined by the Kilmann and Herden model and tested by the Myers-Briggs Type Inventory (MBTI), affected selection of boundary-spanning activities. That is, the number and type of outside contacts sought and the way that information was analyzed differed as a function of cognitive style. Dollinger (1984) found that small business owners' boundary-spanning activities, including networking and information seeking, were related to two dimensions of decision styles: integrative complexity (the ability to interpret and recode environmental information) and tolerance of ambiguity. Entrepreneurs high on both dimensions spent a greater percentage of their time on boundary-spanning activities. Further, Dollinger found that this decision style was positively associated with firm financial performance. In their investigation of small business owners' psychological traits associated with different information search patterns, Welsch and Young (1982) found two traits influenced entrepreneurs' choice of source and type of information sought from the environment: (1) rigidity, defined as a lack of variability and adaptability, and (2) openness to innovation. Thus, innovativeness seems to be related to one set of managerial behaviors: environmental scanning. Cumulatively, the results of these studies indicate that decision style affects such behaviors as information search and boundary spanning in small business. All of these studies used small business owners rather than individuals who fit the definition of an entrepreneur as one who creates, manages, and assumes the risk of a new venture (Cunningham and Lischeron 1991). …

'Schemes of Practical Utility': Entrepreneurship and Innovation Among 'Great Inventors' in the United States, 1790-1865

Abstract: The growth in inventive activity during early American industrialization is explored by examining the careers of 160 inventors credited with important technological discoveries. Analysis of biographical information and complete patent histories through 1865 indicates that these "great inventors" were entrepreneurial and responded systematically to market demand. Their inventions were procyclical and originated disproportionately from localities linked with extensive markets. Although unexceptional in terms of schooling or technical skills, they vigorously pursued the returns to their inventions, redirected their inventive activity to meet emerging needs, and were distinguished by high geographical mobility toward districts conducive to invention and its commercialization. A central and long-standing question about the process of economic growth is the extent to which technical change responds to market forces or is otherwise endogenously determined. Some scholars believe that the timing of important inventions is typically due to chance or to the logical evolution of technical knowledge, and depict the individuals responsible as geniuses or eccentrics inspired by motives other than material gain. Even when conceding that incremental improvements, or "microinventions," might be induced by material incentives, they continue to hold that important discoveries, or "macroinventions," are largely exogenous with respect to market demand.' An alternative perspective regards all inventions as probabilistic outcomes of investments in inventive activity that are influenced, like any other investment, by an assessment of the potential financial returns. In this view, circumstances that enhance the expected net return to inventive activity, such as the characteristic expansion of markets during the initial

Small Businesses As A Research Subject: Some Reflections on Knowledge of Small Businesses and Its Effects on Economic Theory*

Abstract: Most economists agree in their view of small and medium-sized enterprises, or small businesses (SMEs), as a marginal scientific subject. They may go so far as to ignore them, either because they think these economic units do not lend themselves to conventional economic studies — studies which, for instance, take into account the “sacred cow” theory of economies of scale — or because they see them as being not really different from big businesses. However, at least a few economists have recognized, first, the many characteristics differentiating SMEs from big firms, and second, their increasing importance in terms of numbers and job creation within economies. Among these few, Schumpeter was one of the first to show the importance of entrepreneurs and SMEs as the main variable of change in an economy. Simon and Lucas also explained the difference between small and big firms through the differing abilities required by managers to run them. Penrose looked at the question from another point of view by highlighting the interstices taken up by SMEs to fulfil needs that cannot be fulfilled by bigger units. Critics of the theory of economies of scale showed that such economies may be offset by a number of diseconomies, thus justifying the efficiency of many SMEs. More recently, Mills and Schumann suggested that SMEs compensate for their lack of economies of scale by their production flexibility, particularly in today's turbulent economy. The limits of traditional economic theory are clearly demonstrated by the fact that it does not take account of all these theories, concepts and ideas. It thus neglects a number of important economic phenomena, including the persistence and current expansion of SMEs. Consideration of such phenomena may lead to the development of a new economic theory based on the concepts of instability and contingency, together with the behaviour of entrepreneurs and small firms, thus tending to contradict, in particular, the concept of equilibrium in conventional economic theory.