Essentials of Entrepreneurship
Difference risk & uncertainty
College 1
Cantillon: entrepreneurs bring equilibrium into supply-demand because they create
better matches
Say: entrepreneurs are coordinators, not many can do it
Mars: entrepreneurs drive the production and distribution process, they coordinate
supply and demand, yield innovation and progress
Schumpeter: entr is prime mover of economic progress
Knight: entr is responsible for direction and control whenever uncertainty is involved
- Entrepreneurial ability: high degree of self confidence, leadership, intellectual
Kirzner: entr no special ability, but need special type of knowledge → know where to
look and exploit opportunity
Shane & Venkatamaran (200): The promise of entrepreneurship as a field of
research
The absence of entrepreneurship from our collective theories of markets, firms,
organizations, and change makes our understanding of the business landscape
incomplete.
Three different categories of opportunities:
- The creation of new information, as occurs with the invention of new technologies
- The exploitation of market inefficiencies that result from information asymmetry,
as occurs across time and geography
- The reaction to shifts in the relative costs and benefits of alternative uses for
resources, as occurs with political, regulatory, or demographic changes
Creation, exploitation, evaluation
VB categories:
- Creation of info/opportunity evaluation: seeing what is the problem and if there
could be a benefit in it, landing page
- Opportunity exploitation: what is done to meet demand and build the business:
building website, offering discounts, putting money into it
,Two broad categories of factors that influence the probability that particular people will
discover particular opportunities:
- The possession of the prior information necessary to identify an opportunity and
- The cognitive properties necessary to value it
The Decision to Exploit Entrepreneurial Opportunities is a function of the joint
characteristics of the opportunity and the nature of the individual.
Eigen woorden
3 different categories of opportunities:
- Creation of new information with invention of new tech
- Exploitation of market inefficiencies
- Reaction to shifts in relative costs and benefits of alternative uses of resources
Categories of probability that someone discovers an opportunity:
- Possession of prior information to identify opportunity
- Cognitive properties to value it
Alvarez & Barney (2007): Alternative theory of entrepreneurial action
Purpose of paper:
- Describe entrepreneurial theories of mountain climbing and mountain building
- Understand implications for actions of entrepreneurs associated with these
theories
Mountain climbing: discovery theory that says that entrepreneurial opportunities are like
mountains waiting to be climbed/exploited
Mountain building: creation theory that says that opportunities are created by the
actions of entrepreneurs
The 3 assumptions for teleological theories of human actions:
- Nature of human objectives
- Nature of individual
- Nature of decision making context
Discovery:
- Objectives:
- Individual:
- Decision making:
Creation:
, - Objectives:
- Individual:
- Decision making:
The decision-making context in discovery theory is risky because it assumes that
opportunities are objective in nature. As objective phenomena, entrepreneurs can use a
variety of data collection and analysis techniques to understand the possible outcomes
associated with an opportunity, along with the probability of those outcomes.
The decision-making context in creation theory is uncertain. This is because, according
to this theory, opportunities do not exist until they are created. At the point when a
decision about whether to try to form an opportunity is made, the information required to
know the possible outcomes associated with this decision, and their probability, does
not yet exist.
Difference risk & uncertainty
College 1
Cantillon: entrepreneurs bring equilibrium into supply-demand because they create
better matches
Say: entrepreneurs are coordinators, not many can do it
Mars: entrepreneurs drive the production and distribution process, they coordinate
supply and demand, yield innovation and progress
Schumpeter: entr is prime mover of economic progress
Knight: entr is responsible for direction and control whenever uncertainty is involved
- Entrepreneurial ability: high degree of self confidence, leadership, intellectual
Kirzner: entr no special ability, but need special type of knowledge → know where to
look and exploit opportunity
Shane & Venkatamaran (200): The promise of entrepreneurship as a field of
research
The absence of entrepreneurship from our collective theories of markets, firms,
organizations, and change makes our understanding of the business landscape
incomplete.
Three different categories of opportunities:
- The creation of new information, as occurs with the invention of new technologies
- The exploitation of market inefficiencies that result from information asymmetry,
as occurs across time and geography
- The reaction to shifts in the relative costs and benefits of alternative uses for
resources, as occurs with political, regulatory, or demographic changes
Creation, exploitation, evaluation
VB categories:
- Creation of info/opportunity evaluation: seeing what is the problem and if there
could be a benefit in it, landing page
- Opportunity exploitation: what is done to meet demand and build the business:
building website, offering discounts, putting money into it
,Two broad categories of factors that influence the probability that particular people will
discover particular opportunities:
- The possession of the prior information necessary to identify an opportunity and
- The cognitive properties necessary to value it
The Decision to Exploit Entrepreneurial Opportunities is a function of the joint
characteristics of the opportunity and the nature of the individual.
Eigen woorden
3 different categories of opportunities:
- Creation of new information with invention of new tech
- Exploitation of market inefficiencies
- Reaction to shifts in relative costs and benefits of alternative uses of resources
Categories of probability that someone discovers an opportunity:
- Possession of prior information to identify opportunity
- Cognitive properties to value it
Alvarez & Barney (2007): Alternative theory of entrepreneurial action
Purpose of paper:
- Describe entrepreneurial theories of mountain climbing and mountain building
- Understand implications for actions of entrepreneurs associated with these
theories
Mountain climbing: discovery theory that says that entrepreneurial opportunities are like
mountains waiting to be climbed/exploited
Mountain building: creation theory that says that opportunities are created by the
actions of entrepreneurs
The 3 assumptions for teleological theories of human actions:
- Nature of human objectives
- Nature of individual
- Nature of decision making context
Discovery:
- Objectives:
- Individual:
- Decision making:
Creation:
, - Objectives:
- Individual:
- Decision making:
The decision-making context in discovery theory is risky because it assumes that
opportunities are objective in nature. As objective phenomena, entrepreneurs can use a
variety of data collection and analysis techniques to understand the possible outcomes
associated with an opportunity, along with the probability of those outcomes.
The decision-making context in creation theory is uncertain. This is because, according
to this theory, opportunities do not exist until they are created. At the point when a
decision about whether to try to form an opportunity is made, the information required to
know the possible outcomes associated with this decision, and their probability, does
not yet exist.
