Entrepreneurship and Theory in Practice ; Paradoxes in play
Suna Lowe Nielsen, Kim Klyver, Majbritt Rostgaard Evald and Torben Bager
Third edition
Chapter 1-9 (1-167)
,Chapter 1: What is entrepreneurship?
- Entrepreneurship is a complex phenomenon that occurs in many different contexts, and
varies in terms of its scope, process and output
- Entrepreneurship ->
1. A desire for independence
2. A need to survive in a world that requires differentiation and renewal -> organizations
should create or discover opportunities and pursue them
3. Generating jobs, economic growth and prosperity
4. Developing healthy competition in the economy
- The economic tradition ->
1. Cantillon (1680-1734) -> the entrepreneurs function was to compensate for discrepancies
between supply and demand by buying something cheaply and selling it again at as high
price as possible. The entrepreneur is someone who obtains and distributes resources at
risks, thereby bringing economy towards equilibrium
2. End 1700 -> entrepreneur is a person who plans, supervises, organizes or owns factors or
production
3. 1800s -> distinction between those who supply funds and those who create profit
4. 1900s Knight -> entrepreneur carries uncertainty of the economy on his shoulders ->
three types of uncertainty ->
1. Different outcomes in the future exist and are known -> calculate probabilities and
make decision based on them
2. The future outcome exists but is not now known in advance
3. The true uncertainty -> the future outcome does not exist and it is therefore not
possible to know anything about it
5. 1934 Schumpter -> the entrepreneurship bears no uncertainty about the economy, it is an
innovator who generates new opportunities and organizations in the economy and is the
main source of development in the economy
6. The starting point is an economy in equilibrium until an entrepreneur generates new
opportunities by combining existing things, thereby creating market imbalance
7. Creative destruction -> new projects/organizations are constantly being formed and
others are shutting down
- The social-psychological tradition (1960-1980s) ->
1. Psychological explanations are gaining ground in entrepreneurship -> personal traits are
becoming important
2. Sociology has taken over -> more focus on the relationships between people than
focusing on just an individual
- Emergence tradition (1980s) ->
1. Entrepreneurship is an organizing process that leads to particular output -> the
formation of a new organization
2. Distinction between entrepreneurs and non-entrepreneurs -> entrepreneurs form new
organizations
3. Entrepreneurship = organizational formation
4. Conventional organization theory -> the starting point begins at the place where the
emerging organization ends -> focus on the process of building a new organization
, 5. Organization/entrepreneurship theory -> is mainly interested in what happens once an
organization has been created and developed
- The opportunity tradition ->
1. Entrepreneurship -> discovery, evaluation and exploitation of opportunities to introduce
new goods and services, ways of organizing, markets, processes and raw materials
2. Renewal and opportunity are the core of entrepreneurship
3. Entrepreneurship is something innovative, brining opportunities that add something new
to the world we already know
4. Opportunities -> situations in which new goods, services, raw materials, markets and
organizing methods can be introduced through the formation of new means, ends or
mean-ends relationship
- Kroeger (1974) stage model idea of the organizations’ lifecycle ->
1. Initiation
2. Development
3. Growth
4. Maturity
5. Decline
- Period before start-up -> gestation/discovery -> nascent entrepreneur
- Period just after launching -> early stage phase -> owner manager
- Potential entrepreneurs -> when ideas arises and are being explored
- Nascent entrepreneurs -> taking concrete steps to start the business
- Opportunity emergence -> concerned with the entrepreneur discovering or creating a
business opportunity
- Opportunity evaluation -> entrepreneurs’ assessment of the opportunity in terms of
whether it is attractive to the market or not
- Opportunity organizing -> the entrepreneur tries to exploit the opportunity by implementing
it
- Hofer’s definition of entrepreneur -> someone who perceives an opportunity and creates an
organization to pursue it
- Context within the entrepreneurship develops -> affects the type of network and resources
that the entrepreneur has access to during the opportunity emergence, evaluation and
organizing process
Suna Lowe Nielsen, Kim Klyver, Majbritt Rostgaard Evald and Torben Bager
Third edition
Chapter 1-9 (1-167)
,Chapter 1: What is entrepreneurship?
- Entrepreneurship is a complex phenomenon that occurs in many different contexts, and
varies in terms of its scope, process and output
- Entrepreneurship ->
1. A desire for independence
2. A need to survive in a world that requires differentiation and renewal -> organizations
should create or discover opportunities and pursue them
3. Generating jobs, economic growth and prosperity
4. Developing healthy competition in the economy
- The economic tradition ->
1. Cantillon (1680-1734) -> the entrepreneurs function was to compensate for discrepancies
between supply and demand by buying something cheaply and selling it again at as high
price as possible. The entrepreneur is someone who obtains and distributes resources at
risks, thereby bringing economy towards equilibrium
2. End 1700 -> entrepreneur is a person who plans, supervises, organizes or owns factors or
production
3. 1800s -> distinction between those who supply funds and those who create profit
4. 1900s Knight -> entrepreneur carries uncertainty of the economy on his shoulders ->
three types of uncertainty ->
1. Different outcomes in the future exist and are known -> calculate probabilities and
make decision based on them
2. The future outcome exists but is not now known in advance
3. The true uncertainty -> the future outcome does not exist and it is therefore not
possible to know anything about it
5. 1934 Schumpter -> the entrepreneurship bears no uncertainty about the economy, it is an
innovator who generates new opportunities and organizations in the economy and is the
main source of development in the economy
6. The starting point is an economy in equilibrium until an entrepreneur generates new
opportunities by combining existing things, thereby creating market imbalance
7. Creative destruction -> new projects/organizations are constantly being formed and
others are shutting down
- The social-psychological tradition (1960-1980s) ->
1. Psychological explanations are gaining ground in entrepreneurship -> personal traits are
becoming important
2. Sociology has taken over -> more focus on the relationships between people than
focusing on just an individual
- Emergence tradition (1980s) ->
1. Entrepreneurship is an organizing process that leads to particular output -> the
formation of a new organization
2. Distinction between entrepreneurs and non-entrepreneurs -> entrepreneurs form new
organizations
3. Entrepreneurship = organizational formation
4. Conventional organization theory -> the starting point begins at the place where the
emerging organization ends -> focus on the process of building a new organization
, 5. Organization/entrepreneurship theory -> is mainly interested in what happens once an
organization has been created and developed
- The opportunity tradition ->
1. Entrepreneurship -> discovery, evaluation and exploitation of opportunities to introduce
new goods and services, ways of organizing, markets, processes and raw materials
2. Renewal and opportunity are the core of entrepreneurship
3. Entrepreneurship is something innovative, brining opportunities that add something new
to the world we already know
4. Opportunities -> situations in which new goods, services, raw materials, markets and
organizing methods can be introduced through the formation of new means, ends or
mean-ends relationship
- Kroeger (1974) stage model idea of the organizations’ lifecycle ->
1. Initiation
2. Development
3. Growth
4. Maturity
5. Decline
- Period before start-up -> gestation/discovery -> nascent entrepreneur
- Period just after launching -> early stage phase -> owner manager
- Potential entrepreneurs -> when ideas arises and are being explored
- Nascent entrepreneurs -> taking concrete steps to start the business
- Opportunity emergence -> concerned with the entrepreneur discovering or creating a
business opportunity
- Opportunity evaluation -> entrepreneurs’ assessment of the opportunity in terms of
whether it is attractive to the market or not
- Opportunity organizing -> the entrepreneur tries to exploit the opportunity by implementing
it
- Hofer’s definition of entrepreneur -> someone who perceives an opportunity and creates an
organization to pursue it
- Context within the entrepreneurship develops -> affects the type of network and resources
that the entrepreneur has access to during the opportunity emergence, evaluation and
organizing process
