Essentials of Entrepreneurship – Learning objectives
Entrepreneurial Opportunities
Article 1 – Shane & Venkatamaran
Explain opportunity recognition, evaluation and exploitation
Explain why some people discover and exploit opportunities
Existence of opportunities = situations in which new goods, services, materials, and
methods can be sold at greater cost than needed for production
Opportunity recognition = an opportunity might exist, but the individual has to see it.
Factors that influence this:
Information corridors = people possess different parts of information and you need specific
information to recognize an opportunity. Prior knowledge helps to recognize a problem.
Cognitive properties = even though you possess the needed information, you should be able
to see a means-end relationship. You don’t only need the knowledge, but also the capacity to
work with the knowledge.
Opportunity evaluation = is there a fit between the opportunity and the market/available
resources/policies?
Market research = validate the problem and solution
Is the product/service repeatable and scalable?
Constant changes based on new information
Can all resources be obtained in time?
Opportunity exploitation = the decision to exploit an opportunity is based on the nature of
the opportunity and the characteristics of the entrepreneur, such as
Risk perception
Alertness
Self-efficacy
Tolerance for ambiguity
Prior relevant knowledge and personal characteristics of the entrepreneur might lead to
opportunity recognition. The opportunity needs to be evaluated to know if it is repeatable
and scalable. When all resources are available, opportunity exploitation can start.
Article 2 – Alvarez & Barney
Explain the differences between opportunity discovery and creation
Opportunity discovery theory = the opportunity exists but has to be found by the
entrepreneur. It exists independent from the entrepreneur.
Role of the entrepreneur: the entrepreneurs who exploit opportunities are significantly
different than the ones who don’t. The entrepreneur profits from an opportunity, while
others do not see it or do not know what to do with it. The cause for this difference lies in
alertness. This makes entrepreneurs different beforehand.
, Nature of decision-making context: risky; information about possible outcomes van be
collected, so risks can be calculated.
Opportunity creation theory = the opportunity is created by the entrepreneur (new product
in the market).
Role of entrepreneur: before an entrepreneurial opportunity is created, entrepreneurs may
not differ. Luck can play a role here. Even small differences between entrepreneurs can make
the difference in creating opportunities.
Nature of decision-making context: uncertain; no information available
, Entrepreneurial Methods
Article 3 – Sarasvathy & Venkataraman
Explain the difference between the scientific and entrepreneurial method
Explain how entrepreneurship (education) can be a useful skill to both entrepreneurs and non-
entrepreneurs
Entrepreneurial method = case studies and qualitative studies about how entrepreneurs act
and how they make decisions. Why are some people able to see opportunities where others
don’t? Studies human nature and assumes that entrepreneurship can be taught (and is not
just a born skill). The focus is on interactions, reaction, transformation and co-creation – this
is what analyzed. Also, the dominant logic here is effectuation.
This can all be taught!
Scientific method = looks at nature and tries to make general laws for it. It focuses on the
objective and analyzes through data collection, testing and analytical techniques. The
dominant logic is experimentation.
Entrepreneurial Opportunities
Article 1 – Shane & Venkatamaran
Explain opportunity recognition, evaluation and exploitation
Explain why some people discover and exploit opportunities
Existence of opportunities = situations in which new goods, services, materials, and
methods can be sold at greater cost than needed for production
Opportunity recognition = an opportunity might exist, but the individual has to see it.
Factors that influence this:
Information corridors = people possess different parts of information and you need specific
information to recognize an opportunity. Prior knowledge helps to recognize a problem.
Cognitive properties = even though you possess the needed information, you should be able
to see a means-end relationship. You don’t only need the knowledge, but also the capacity to
work with the knowledge.
Opportunity evaluation = is there a fit between the opportunity and the market/available
resources/policies?
Market research = validate the problem and solution
Is the product/service repeatable and scalable?
Constant changes based on new information
Can all resources be obtained in time?
Opportunity exploitation = the decision to exploit an opportunity is based on the nature of
the opportunity and the characteristics of the entrepreneur, such as
Risk perception
Alertness
Self-efficacy
Tolerance for ambiguity
Prior relevant knowledge and personal characteristics of the entrepreneur might lead to
opportunity recognition. The opportunity needs to be evaluated to know if it is repeatable
and scalable. When all resources are available, opportunity exploitation can start.
Article 2 – Alvarez & Barney
Explain the differences between opportunity discovery and creation
Opportunity discovery theory = the opportunity exists but has to be found by the
entrepreneur. It exists independent from the entrepreneur.
Role of the entrepreneur: the entrepreneurs who exploit opportunities are significantly
different than the ones who don’t. The entrepreneur profits from an opportunity, while
others do not see it or do not know what to do with it. The cause for this difference lies in
alertness. This makes entrepreneurs different beforehand.
, Nature of decision-making context: risky; information about possible outcomes van be
collected, so risks can be calculated.
Opportunity creation theory = the opportunity is created by the entrepreneur (new product
in the market).
Role of entrepreneur: before an entrepreneurial opportunity is created, entrepreneurs may
not differ. Luck can play a role here. Even small differences between entrepreneurs can make
the difference in creating opportunities.
Nature of decision-making context: uncertain; no information available
, Entrepreneurial Methods
Article 3 – Sarasvathy & Venkataraman
Explain the difference between the scientific and entrepreneurial method
Explain how entrepreneurship (education) can be a useful skill to both entrepreneurs and non-
entrepreneurs
Entrepreneurial method = case studies and qualitative studies about how entrepreneurs act
and how they make decisions. Why are some people able to see opportunities where others
don’t? Studies human nature and assumes that entrepreneurship can be taught (and is not
just a born skill). The focus is on interactions, reaction, transformation and co-creation – this
is what analyzed. Also, the dominant logic here is effectuation.
This can all be taught!
Scientific method = looks at nature and tries to make general laws for it. It focuses on the
objective and analyzes through data collection, testing and analytical techniques. The
dominant logic is experimentation.
