Contents
Lecture 1 – Introduction to Innovation&Entrepreneurship...................................................................2
Lecture 1 - Summary..........................................................................................................................2
Part 1 - Introduction......................................................................................................................2
Part 2 – Entrepreneurship – An opportunity based framework.....................................................2
Shane, S. and S. Venkataraman (2000), The Promise of Entrepreneurship as a Field of Research,
Academy of Management Review, 25(1), 217-226............................................................................8
Åstebro, T. (2003), The Return to Independent Invention: Evidence of Unrealistic Optimism, Risk
Seeking or Skewness Loving? The Economic Journal, 113(484), 226–239.......................................13
Lecture 2 – Successfully managing the entrepreneurial process – a Resource and Legitimacy
perspective..........................................................................................................................................17
Lecture 2 - Summary........................................................................................................................17
Alvarez, S.A., J.B. Barney, and P. Anderson (2013), Forming and exploiting opportunities: The
impactions of discovery and creation processes for entrepreneurial and organizational research.
Organization Science, 26(1), 301-317..............................................................................................26
Kerr, W. R., Nanda, R., & Rhodes-Kropf, M. (2014). Entrepreneurship as experimentation. Journal
of Economic Perspectives, 28(3), 25-48...........................................................................................35
Hsu, D. H. (2007). Experienced entrepreneurial founders, organizational capital, and venture
capital funding. Research Policy, 36(5), 722-741.............................................................................35
Lecture 3 - Successfully managing innovation processes - a resource and governance perspective...36
Lecture 3 – Summary.......................................................................................................................36
Evanschitzky, H., Eisend, M., Calantone, R.J. and Jiang, Y. (2012), Success Factors of Product
Innovation: An Updated Meta-Analysis, Journal of Product Innovation Management, 29(1), 21-37.
.........................................................................................................................................................41
Hansen, M. T., & Birkinshaw, J. (2007). The innovation value chain. Harvard Business Review,
85(6), 121–131.................................................................................................................................46
Ederer, F., & Manso, G. (2013). Is Pay for Performance Detrimental to Innovation? Management
Science, 59(7), 1496–1513...............................................................................................................49
Lecture 4 - Innovation & Entrepreneurship: Building a framework.....................................................49
Lecture 4 – Summary.......................................................................................................................49
Part 1: Linking Innovation to Entrepreneurship – building a framework – Legitimacy 1..............51
Part 2 – Linking Innovation to Entrepreneurship – building a framework – Legitimacy 2 &
Organizational forms...................................................................................................................52
Part 3 – Linking Innovation to Entrepreneurship – building a framework –Organizational forms
.....................................................................................................................................................54
9. Aldrich H.E. and C.M. Fiol, (1994), Fools rush in? The Institutional Context of Industry Creation,
Academy of Management Review, 19(4), 645-670..........................................................................56
10. Singh Rao, R., Chandy, R.K., and J.C. Prabhu (2008), The Fruits of Legitimacy; Why Some New
Ventures Gain More From Innovation Than Others, Journal of Marketing, 72, 58-75.....................63
, 11. Powell W.W. (1990). Neither Market nor Hierarchy: Network Forms of Organization. Research
in Organizational Behavior, 12, 295-336..........................................................................................69
Lecture 5 – Guest Lecture –.................................................................................................................76
Lecture 1 – Introduction to
Innovation&Entrepreneurship
Lecture 1 - Summary
Part 1 - Introduction
Main Course Objectives
Define the concepts of innovation and entrepreneurship and explain their interrelationships.
Develop a theoretical framework distinguishing factors that influence the success of an
innovation/entrepreneurial activity.
Assess the validity of the theoretical framework in a real business setting by analyzing
secondary data on a specific case.
Logically, clearly, carefully express your own activities, opinions and research findings to the
lecturer and fellow students.
Format
Theoretical part (Lectures 1-4):
Mainstream literature on innovation and entrepreneurship that provides the input for the
theoretical part of your essay.
Definitions of innovation and entrepreneurship
The relationship between innovation and entrepreneurship
Criteria for evaluating the success of an innovation
Stages in processes of innovation management and the entrepreneurial processes
Factors influencing the process and effectiveness of innovation (e.g. resources, legitimation,
and the choice for an organizational form)
Part 2 – Entrepreneurship – An opportunity based framework
Structure of the course
,Index
1. Goals
2. Motivation
3. Entrepreneurship as an opportunity-based framework
4. Comparative advantages of entrepreneurial vs incumbent innovators
5. What does evidence tell us?
6. Possible relevant (exam) questions
7. Take-away points
8. References
1. Goals
Understand the nexus between innovation and entrepreneurship:
o definitions and interrelationship
Distinguish between (1) start-up innovation vs (2) incumbent innovation: two modes of
entrepreneurship.
1. Innovation taking place through the formation new ventures.
2. Innovation taking place in an established corporation
Discuss advantages and prevalence of each mode of innovation
2. Motivation
Creative destruction (periods of quiet waves of disruption new players in market)
Schumpeter believed that innovation causes most markets to evolve in a characteristic pattern
Markets have periods of comparative quiet, when firms that have developed superior products
and technologies earn positive profits
These periods are punctuated by fundamental shocks that destroy old sources of advantage and
replace them with new ones.
Entrepreneurs who exploit the opportunities created by the shocks enjoy economic profits
during the next period of quiet.
Examples:
Blockbuster vs Netflix
Taxi vs Uber
, DVD vs MP3
Kodak vs digital camera
Nokia vs iPhone
Disruptive Technologies (radical innovations)
New entrants are associated with the creation of disruptive technologies. Such disruptive
technologies are heralded as a key driver of rising living standards.
Incumbent firms often are associated with incremental innovations that contribute more
marginal gains to innovation. Often believed to be aimed at preserving market power.
Creative Destruction & Competitive Advantage
What is the comparative advantage of start-ups vs incumbents at discovering and exploiting
opportunities?
3. Entrepreneurship as an opportunity based framework (Shane and
Venkataraman)
Entrepreneurship as the ability to exploit opportunities
Entrepreneurship (innovation): the discovery and exploitation of a lucrative opportunity
Opportunities: situations in which new goods, services, raw materials, and organizing methods
can be introduced and sold at greater [value] than their cost of production (Casson, 1982)
Who discovers opportunities?
Opportunities are objective, but the process to identify them is subjective. Entrepreneurship
requires that people hold different beliefs and capabilities about the value of resources.
Heterogeneity (e.g. different information, specific capabilities) generates a comparative
advantage that allows some individuals and not others to act on certain opportunities
Startup vs incumbent innovation
Entrepreneurship does not require (but can include) the creation of new organizations
It depends on who discovers and who exploits opportunities (do not need to be the same)
Four types of innovation depending on the locus (startups vs incumbent firms) of the two key
stages of entrepreneurship (discovery and exploitation)
A. Incumbent innovation – all in-house
B. Incumbent innovation – external invention
Lecture 1 – Introduction to Innovation&Entrepreneurship...................................................................2
Lecture 1 - Summary..........................................................................................................................2
Part 1 - Introduction......................................................................................................................2
Part 2 – Entrepreneurship – An opportunity based framework.....................................................2
Shane, S. and S. Venkataraman (2000), The Promise of Entrepreneurship as a Field of Research,
Academy of Management Review, 25(1), 217-226............................................................................8
Åstebro, T. (2003), The Return to Independent Invention: Evidence of Unrealistic Optimism, Risk
Seeking or Skewness Loving? The Economic Journal, 113(484), 226–239.......................................13
Lecture 2 – Successfully managing the entrepreneurial process – a Resource and Legitimacy
perspective..........................................................................................................................................17
Lecture 2 - Summary........................................................................................................................17
Alvarez, S.A., J.B. Barney, and P. Anderson (2013), Forming and exploiting opportunities: The
impactions of discovery and creation processes for entrepreneurial and organizational research.
Organization Science, 26(1), 301-317..............................................................................................26
Kerr, W. R., Nanda, R., & Rhodes-Kropf, M. (2014). Entrepreneurship as experimentation. Journal
of Economic Perspectives, 28(3), 25-48...........................................................................................35
Hsu, D. H. (2007). Experienced entrepreneurial founders, organizational capital, and venture
capital funding. Research Policy, 36(5), 722-741.............................................................................35
Lecture 3 - Successfully managing innovation processes - a resource and governance perspective...36
Lecture 3 – Summary.......................................................................................................................36
Evanschitzky, H., Eisend, M., Calantone, R.J. and Jiang, Y. (2012), Success Factors of Product
Innovation: An Updated Meta-Analysis, Journal of Product Innovation Management, 29(1), 21-37.
.........................................................................................................................................................41
Hansen, M. T., & Birkinshaw, J. (2007). The innovation value chain. Harvard Business Review,
85(6), 121–131.................................................................................................................................46
Ederer, F., & Manso, G. (2013). Is Pay for Performance Detrimental to Innovation? Management
Science, 59(7), 1496–1513...............................................................................................................49
Lecture 4 - Innovation & Entrepreneurship: Building a framework.....................................................49
Lecture 4 – Summary.......................................................................................................................49
Part 1: Linking Innovation to Entrepreneurship – building a framework – Legitimacy 1..............51
Part 2 – Linking Innovation to Entrepreneurship – building a framework – Legitimacy 2 &
Organizational forms...................................................................................................................52
Part 3 – Linking Innovation to Entrepreneurship – building a framework –Organizational forms
.....................................................................................................................................................54
9. Aldrich H.E. and C.M. Fiol, (1994), Fools rush in? The Institutional Context of Industry Creation,
Academy of Management Review, 19(4), 645-670..........................................................................56
10. Singh Rao, R., Chandy, R.K., and J.C. Prabhu (2008), The Fruits of Legitimacy; Why Some New
Ventures Gain More From Innovation Than Others, Journal of Marketing, 72, 58-75.....................63
, 11. Powell W.W. (1990). Neither Market nor Hierarchy: Network Forms of Organization. Research
in Organizational Behavior, 12, 295-336..........................................................................................69
Lecture 5 – Guest Lecture –.................................................................................................................76
Lecture 1 – Introduction to
Innovation&Entrepreneurship
Lecture 1 - Summary
Part 1 - Introduction
Main Course Objectives
Define the concepts of innovation and entrepreneurship and explain their interrelationships.
Develop a theoretical framework distinguishing factors that influence the success of an
innovation/entrepreneurial activity.
Assess the validity of the theoretical framework in a real business setting by analyzing
secondary data on a specific case.
Logically, clearly, carefully express your own activities, opinions and research findings to the
lecturer and fellow students.
Format
Theoretical part (Lectures 1-4):
Mainstream literature on innovation and entrepreneurship that provides the input for the
theoretical part of your essay.
Definitions of innovation and entrepreneurship
The relationship between innovation and entrepreneurship
Criteria for evaluating the success of an innovation
Stages in processes of innovation management and the entrepreneurial processes
Factors influencing the process and effectiveness of innovation (e.g. resources, legitimation,
and the choice for an organizational form)
Part 2 – Entrepreneurship – An opportunity based framework
Structure of the course
,Index
1. Goals
2. Motivation
3. Entrepreneurship as an opportunity-based framework
4. Comparative advantages of entrepreneurial vs incumbent innovators
5. What does evidence tell us?
6. Possible relevant (exam) questions
7. Take-away points
8. References
1. Goals
Understand the nexus between innovation and entrepreneurship:
o definitions and interrelationship
Distinguish between (1) start-up innovation vs (2) incumbent innovation: two modes of
entrepreneurship.
1. Innovation taking place through the formation new ventures.
2. Innovation taking place in an established corporation
Discuss advantages and prevalence of each mode of innovation
2. Motivation
Creative destruction (periods of quiet waves of disruption new players in market)
Schumpeter believed that innovation causes most markets to evolve in a characteristic pattern
Markets have periods of comparative quiet, when firms that have developed superior products
and technologies earn positive profits
These periods are punctuated by fundamental shocks that destroy old sources of advantage and
replace them with new ones.
Entrepreneurs who exploit the opportunities created by the shocks enjoy economic profits
during the next period of quiet.
Examples:
Blockbuster vs Netflix
Taxi vs Uber
, DVD vs MP3
Kodak vs digital camera
Nokia vs iPhone
Disruptive Technologies (radical innovations)
New entrants are associated with the creation of disruptive technologies. Such disruptive
technologies are heralded as a key driver of rising living standards.
Incumbent firms often are associated with incremental innovations that contribute more
marginal gains to innovation. Often believed to be aimed at preserving market power.
Creative Destruction & Competitive Advantage
What is the comparative advantage of start-ups vs incumbents at discovering and exploiting
opportunities?
3. Entrepreneurship as an opportunity based framework (Shane and
Venkataraman)
Entrepreneurship as the ability to exploit opportunities
Entrepreneurship (innovation): the discovery and exploitation of a lucrative opportunity
Opportunities: situations in which new goods, services, raw materials, and organizing methods
can be introduced and sold at greater [value] than their cost of production (Casson, 1982)
Who discovers opportunities?
Opportunities are objective, but the process to identify them is subjective. Entrepreneurship
requires that people hold different beliefs and capabilities about the value of resources.
Heterogeneity (e.g. different information, specific capabilities) generates a comparative
advantage that allows some individuals and not others to act on certain opportunities
Startup vs incumbent innovation
Entrepreneurship does not require (but can include) the creation of new organizations
It depends on who discovers and who exploits opportunities (do not need to be the same)
Four types of innovation depending on the locus (startups vs incumbent firms) of the two key
stages of entrepreneurship (discovery and exploitation)
A. Incumbent innovation – all in-house
B. Incumbent innovation – external invention
