Samenvatting Entrepreneurship
Lecture 1:
The government cares about how big a SME is.
Also important to give subsidies and funding
It's important to know about the staff headcount, not really the turnover and balance sheets.
Shane and Venkataraman (2000)
Definition e’ship: E’ship is the discovery and exploitation of entrepreneurial opportunities.
2 types of profit opportunities:
- 1. Entrepreneurial opportunities
- 2. Non-entrepreneurial opportunities
Entrepreneurial opportunities are a subgroup to a large group of opportunities. Some ideas are
entrepreneurial, meaning that this is about engaging and new activities,
The non- entrepreneurial activities mean engaging in existing activities and trying to enhance the
efficiency of these activities.
The level of newness can vary from incremental (not really new but new to the person introducing it) to
very radical
Sharma and Chrisman (1999)
Definition e’ship: Acts of organizational creation, renewal or innovation inside or outside an organization.
Entrepreneurship: individuals or groups of individuals, acting independently or as part of a corporate
system, who create new organizations, or instigate renewal or innovation within an existing organization.
Small businesses
- Entrepreneurship is considered to be innovative and new but small business or SME is typically about
small established organizations that already exist.
- Many small businesses have existed for decades and they aren’t new, they survive but that does not
equal entrepreneurship.
SME = Small or medium enterprises
Solo self employeds (SSE =ZZP) not a separate EU category! Yet because this is a very big group 80% of
the firms in the NL are actually solo self employeds. 99.8% of the firms are classified as an SME. Not all
entrepreneurship occurs in SMEs (e.g. Shell, Google etc). Not every SME is entrepreneurial.
Terms entrepreneurship and small business are often used together.
Entrepreneurship is about: innovation/renewal, new venture creation, ‘building a road’
,Small business (or SME’s) more about management, running an established firm, ‘travelling an existent
road’
(Quantitative) definitions of SMEs
1. The EU definition: look at the numbers more, so number of employees (staff headcount), additionally
they look at turnover level and/or balance sheet total. So more at financial levels to see if a firm is large.
Why it is important to know these quantitative definitions/for whom → e.g. governments with giving out
subsidies.
2. Scale (micro, small or medium)
3. Staff headcount, turnover etc.
From ME to EE
ICT leads to more flexibility and opportunities to share knowledge across the world which increases
innovation and entrepreneurship.
Schumpeter(1909, Mark 1): SME’s are important for creative destruction. If we want to innovate we
need small firms because of their flexibility.
Schumpeter( 1947, Mark2): Importance of SMEs will decrease, because they can not produce as much
as big e’ships.
Kuratko developed different kinds of frameworks to understand entrepreneurship and is therefore
different from Shane and Venkataraman.
- Schools of thought framework
- Integrative framework
- Typology of entrepreneurs framework
- Process frameworks
- Venture typology frameworks
- Life cycle frameworks.
1
,Kuratko et. al (2015) SCHOOLS OF THOUGHT FRAMEWORK
Reasons for people to start a new entrepreneur business. Schools of thought framework: how researchers
have thought about entrepreneurship.
Macro schools of thought view (FED):
1. Environmental school of thought
2. Financial/ capital school of thought
3. Displacement school of thought
Macro view looks at factors from the external world that impact entrepreneur business. For example
culture, banks, legal factors. People start a new business because of the displacement school of thought
because they don’t feel like they fit in.
Micro schools of thought view (VES):
1. Entrepreneurial trait school of thought = Traits that make a successful entrepreneur.
2. Venture opportunity school of thought = Essence of an opportunity that has attractive potential
to become a successful venture.
3. Strategic formulation school of thought = The process of using available knowledge to
document the intended direction of a business and the actionable steps to reach its goals.
A micro view looks at how the entrepreneur affects the external environment.
→ Micro view can also be linked to the shane en venkataraman article
The integrative framework
The integrative frameworks distinguish different elements that are affecting the entrepreneurial process:
● The environment: external factors, like banks. What aspects from the environment affect the
entrepreneurial process/outcome
● The entrepreneur: role of the entrepreneur, motivation, personality
● The resources: hrm, finance? Everything that you can have as a firm so financial, staff,
technological capabilities etc) (THIS ONE IS NOT DISCUSSED IN THE FIRST
FRAMEWORK (school of thought))
● The concept: What is sold, a good or service? Is it entrepreneurial?
● The organizational context: small or corporate? Is the entrepreneur perhaps external from the
venture? how is it organized, independent entrepreneurship or entrepreneur acting in established
company so corporate entrepreneur)
→ All affect the entrepreneurial process and outcome.
Sharma and Chrisman (1999)
Sharma and Chrisman are more clear about how forms of entrepreneurship can take place.
Venture typology framework
Corporate entrepreneurship = The process whereby an individual or a group of individuals, in
association with an existing organization, create a new organization or instigate renewal or innovation
within that organization
2
, Independent entrepreneurship = Independent entrepreneurship is the process whereby an individual or
group of individuals, acting independently of any association with an existing organization, create a new
organization.
Corporate venturing = Corporate entrepreneurial efforts that lead to the creation of new business
organizations within the corporate organization
Internal corporate venturing = Corporate venturing activities that result in the creation of
organizational entities that reside within an existing organizational domain
External corporate venturing = Corporate venturing activities that result in the creation of semi
autonomous or autonomous organizational entities that reside outside the existing organizational domain
Stages in entrepreneurship life cycle models
Different development stages main idea is that company’s go through developments
The processes of discovering opportunities and exploitation of opportunities goes back and forth. In the
end after exploitation of opportunities, you can make the decision to grow/ maintain, or you might even
have to downsize.
Shane and Venkataraman: First discover an idea and then exploitation of opportunities.
- But its more complex so then check the different stages of development
- You can grow development en maintenance
- But you can also downsizing bankruptcy/ quitting (e.g. DVD rent stores were really popular but
nowadays they disappear.
- Each stage has its own characteristics and organizational challenges.
Shane and Venkataraman stop after the exploitation of opportunities and don’t acknowledge that the ideas
go back and forth
Core ideas of business life cycle models:
● During their lifetime firms proceed through different stages: start, growth, maturity and decline. ● Each
stage has its own characteristics and organizational challenges
Churchill and Lewis 1983
Pitfalls of traditional life cycle models:
● Age and size are not related, a digital business for example can be very big but young. ● Not all
firms go through these stages.
● Only 10% want to grow as entrepreneurs, only they feel the need to become a larger company, so
not everyone wants to grow.
● Not every firm will grow, you can also go bankrupt or decrease.
● Failure to capture very early stages
● Only focus on annual sales, not on other factors
● Focus only on internal factors, not on environmental factor (own addition)
3
Lecture 1:
The government cares about how big a SME is.
Also important to give subsidies and funding
It's important to know about the staff headcount, not really the turnover and balance sheets.
Shane and Venkataraman (2000)
Definition e’ship: E’ship is the discovery and exploitation of entrepreneurial opportunities.
2 types of profit opportunities:
- 1. Entrepreneurial opportunities
- 2. Non-entrepreneurial opportunities
Entrepreneurial opportunities are a subgroup to a large group of opportunities. Some ideas are
entrepreneurial, meaning that this is about engaging and new activities,
The non- entrepreneurial activities mean engaging in existing activities and trying to enhance the
efficiency of these activities.
The level of newness can vary from incremental (not really new but new to the person introducing it) to
very radical
Sharma and Chrisman (1999)
Definition e’ship: Acts of organizational creation, renewal or innovation inside or outside an organization.
Entrepreneurship: individuals or groups of individuals, acting independently or as part of a corporate
system, who create new organizations, or instigate renewal or innovation within an existing organization.
Small businesses
- Entrepreneurship is considered to be innovative and new but small business or SME is typically about
small established organizations that already exist.
- Many small businesses have existed for decades and they aren’t new, they survive but that does not
equal entrepreneurship.
SME = Small or medium enterprises
Solo self employeds (SSE =ZZP) not a separate EU category! Yet because this is a very big group 80% of
the firms in the NL are actually solo self employeds. 99.8% of the firms are classified as an SME. Not all
entrepreneurship occurs in SMEs (e.g. Shell, Google etc). Not every SME is entrepreneurial.
Terms entrepreneurship and small business are often used together.
Entrepreneurship is about: innovation/renewal, new venture creation, ‘building a road’
,Small business (or SME’s) more about management, running an established firm, ‘travelling an existent
road’
(Quantitative) definitions of SMEs
1. The EU definition: look at the numbers more, so number of employees (staff headcount), additionally
they look at turnover level and/or balance sheet total. So more at financial levels to see if a firm is large.
Why it is important to know these quantitative definitions/for whom → e.g. governments with giving out
subsidies.
2. Scale (micro, small or medium)
3. Staff headcount, turnover etc.
From ME to EE
ICT leads to more flexibility and opportunities to share knowledge across the world which increases
innovation and entrepreneurship.
Schumpeter(1909, Mark 1): SME’s are important for creative destruction. If we want to innovate we
need small firms because of their flexibility.
Schumpeter( 1947, Mark2): Importance of SMEs will decrease, because they can not produce as much
as big e’ships.
Kuratko developed different kinds of frameworks to understand entrepreneurship and is therefore
different from Shane and Venkataraman.
- Schools of thought framework
- Integrative framework
- Typology of entrepreneurs framework
- Process frameworks
- Venture typology frameworks
- Life cycle frameworks.
1
,Kuratko et. al (2015) SCHOOLS OF THOUGHT FRAMEWORK
Reasons for people to start a new entrepreneur business. Schools of thought framework: how researchers
have thought about entrepreneurship.
Macro schools of thought view (FED):
1. Environmental school of thought
2. Financial/ capital school of thought
3. Displacement school of thought
Macro view looks at factors from the external world that impact entrepreneur business. For example
culture, banks, legal factors. People start a new business because of the displacement school of thought
because they don’t feel like they fit in.
Micro schools of thought view (VES):
1. Entrepreneurial trait school of thought = Traits that make a successful entrepreneur.
2. Venture opportunity school of thought = Essence of an opportunity that has attractive potential
to become a successful venture.
3. Strategic formulation school of thought = The process of using available knowledge to
document the intended direction of a business and the actionable steps to reach its goals.
A micro view looks at how the entrepreneur affects the external environment.
→ Micro view can also be linked to the shane en venkataraman article
The integrative framework
The integrative frameworks distinguish different elements that are affecting the entrepreneurial process:
● The environment: external factors, like banks. What aspects from the environment affect the
entrepreneurial process/outcome
● The entrepreneur: role of the entrepreneur, motivation, personality
● The resources: hrm, finance? Everything that you can have as a firm so financial, staff,
technological capabilities etc) (THIS ONE IS NOT DISCUSSED IN THE FIRST
FRAMEWORK (school of thought))
● The concept: What is sold, a good or service? Is it entrepreneurial?
● The organizational context: small or corporate? Is the entrepreneur perhaps external from the
venture? how is it organized, independent entrepreneurship or entrepreneur acting in established
company so corporate entrepreneur)
→ All affect the entrepreneurial process and outcome.
Sharma and Chrisman (1999)
Sharma and Chrisman are more clear about how forms of entrepreneurship can take place.
Venture typology framework
Corporate entrepreneurship = The process whereby an individual or a group of individuals, in
association with an existing organization, create a new organization or instigate renewal or innovation
within that organization
2
, Independent entrepreneurship = Independent entrepreneurship is the process whereby an individual or
group of individuals, acting independently of any association with an existing organization, create a new
organization.
Corporate venturing = Corporate entrepreneurial efforts that lead to the creation of new business
organizations within the corporate organization
Internal corporate venturing = Corporate venturing activities that result in the creation of
organizational entities that reside within an existing organizational domain
External corporate venturing = Corporate venturing activities that result in the creation of semi
autonomous or autonomous organizational entities that reside outside the existing organizational domain
Stages in entrepreneurship life cycle models
Different development stages main idea is that company’s go through developments
The processes of discovering opportunities and exploitation of opportunities goes back and forth. In the
end after exploitation of opportunities, you can make the decision to grow/ maintain, or you might even
have to downsize.
Shane and Venkataraman: First discover an idea and then exploitation of opportunities.
- But its more complex so then check the different stages of development
- You can grow development en maintenance
- But you can also downsizing bankruptcy/ quitting (e.g. DVD rent stores were really popular but
nowadays they disappear.
- Each stage has its own characteristics and organizational challenges.
Shane and Venkataraman stop after the exploitation of opportunities and don’t acknowledge that the ideas
go back and forth
Core ideas of business life cycle models:
● During their lifetime firms proceed through different stages: start, growth, maturity and decline. ● Each
stage has its own characteristics and organizational challenges
Churchill and Lewis 1983
Pitfalls of traditional life cycle models:
● Age and size are not related, a digital business for example can be very big but young. ● Not all
firms go through these stages.
● Only 10% want to grow as entrepreneurs, only they feel the need to become a larger company, so
not everyone wants to grow.
● Not every firm will grow, you can also go bankrupt or decrease.
● Failure to capture very early stages
● Only focus on annual sales, not on other factors
● Focus only on internal factors, not on environmental factor (own addition)
3
