Defining Entrepreneurship- Competing Perspectives

8/9/2019 Defining Entrepreneurship- Competing Perspectives

1/18

E F IN I N G E N T R E P R E N E U R S H I P

by J Barton Cunningham and Joe Lischeron

W e continue t o know very little abou t

entrepreneurs, even though there is

much interest and many publications

on the subject. Much ofthe material is

fragmented and highly controversial.

For example, self-employed indiv iduals

and business proprietors may be sur-

prised to learn tbat some academics

and researchers would suggest they

are not really en trep ren eu rs but

small business owners. Indeed, many

people who ha ve long perceived them-

selves to be successful entrepreneurs

would not fit some of the definitions

which are now being proposed.

Selection oftheap prop riate basis for

defining a nd understan ding the entre-

preneurial person creates a challenging

problem for academic researchers and

writers. The field of research has been

described as young, at a formative

stage , and still in its infancy (Paulin et

a l 1982, Perrym an 1982, Peterson and

Horvath 1982, Sexton 1982). There is

generally no accepted definition or

model of what the entrepreneur is or

does (Churchill and Lewis

1986).

In the

past decade, a number of trends have

emerged which distinguish between

individual entrepreneurship and cor-

porate entrepreneurship (Wortman

Dr, Cunningham is an associaW professor in the

School of Public AdminiBtration al the University of

Victoria, He is currently working on projects concerned

with crifliB management, entrepreneurship. management

skills,

and action research.

1987), and entrepreneurs and small

bus iness ow ners (Ca rland et al. 1984).

The literature abounds with criteria

rangin g from creativity and innova tion

to personal traits such as appearance

and

style.

Models ofthe entrepreneurial

leader are almost as plentiful as the

number of authors who write about

them.

A large literature has developed

ranging from academic studies to pre-

scriptive b lueprin ts for se tting up new

ventures. Tbe term entrep reneu r has

often been applied to the founder of a

new business, or a person wbo started

a new business where there was none

before (Gartner 1985). In this view,

anyone who inherits (Henry Ford II),

or buys an existing enterprise (George

Steinbrenner's purchase of the Yan-

kees), or manages a turnaround as an

employee { L e e Iacocca) is by definition

not an en trepreneur. Others reserve the

term to apply only to the creative

activity of the innovator (Schumpeter

1934).

With this last definition, the

majority of those pursuing entrepre-

neurial and business activities would

be excluded. Yet, others refer to the

identification and exploitation of an

opportunity as entrepreneurial (Peter-

son 1985). Those who develop a niehe

in the market or develop a strategy to

satisfy some need are also, by some,


2/18

different perspectives. The term has

been used to define a wide range of

activities such as creation, founding,

adapting , and m anaging a venture. No

single discipline provides the tools for

managing an entrepreneurial venture

(Stevenson 1988). With such a var iation

in viewpoints, it

is

not surprising th at a

consensus has not been reached ahout

what entrepreneurship is.

This article descrihes six schools of

thought and attempts to show how

they may he useful for understanding

the entrepreneurial process. These

schools offer unique viewpoints to

illustrate what the entrepreneur does

and what functions and processes are

key.

SCHOOLS OF THOUGHT

ON ENTREPRENEURSHIP

Although an agreed-upon definition

may serve to unite the field, research

activity seems

to

fall with in six schools

of thought, each with its own under-

lying set of beliefs. Each of these

schools can he categorized according to

its interest in studying personal char-

acteristics, opportunities, management,

or the need for adapting an existing

venture.

Assessing Personal Qualities

1. The G reat Pe rso n School of

Entrepreneurship

2.

The Psychological Characteristics

School of Entrepreneurship

Recognizing Opportunities

3 The Classical School of Entrepre-

neurship

Acting and Managing

4. TheManagementSchoolofEntre-

preneurship

5.

The Leadership School of Entre-

preneurship

Reassessing and Adapting

6. The Intrapreneurship School of

Entrepreneurship

or skills. The hehaviors and skills of

different schools of thought are pre-

sented in tahle

and described in the

following paragraphs.

Th e Great Person

Scho ol of Entrepreneurship

Are entrepren eurs (like leaders) horn,

or are they made? Can one teach

another or learn to be a manager,

leader, or entrepreneur, or does the

individual come into this world carry-

ing the genes or the inborn natural

capacity

to

perform these activities? As

there is (or was) a school tha t helieves

in the charism atic leader,

so

there is (or

was) a school that might he called the

gre at pers on school of entrepre-

neurship.

Newspaper columnists of the day

provide snippe ts of current gre at

people ran gin g from the Fords or the

Kennedys to a Lee Iacocca, an Enzo

Ferrari, a Rockefeller, a Trump, or a

Bronfman. Television stories depict

fictional cha racters and biographies

of

this genre. Writers of magazines such

as

Fortune

and

Business Week

offer

docum entaries, not on the daily lives

of

the hard-working, persevering entre-

preneu r, but on the exceptional flashy

story of the successful grea t people.

The picture presented is usually one

of power, success, and wealth, the

image of our husiness elite. To be

inspirational, these individuals must

he ahle to present ideas, concepts, and

heliefs that others find interesting,

intriguing, or stimulating. This sug-

gests that they are endowed with

certain traits or qualities that differ-

en tiate them from others (Garfield 1986,

Hughes 1986, Silver 1985).

Biographies frequently identify the

intuitive ahiiity of the great people to

recognize an opportunity an d make the

appropriate decision. They imply that,


3/18

IS

X

X

ij

z

J

DC

0 .

UJ

OC

»

c

IB

2

v

n

m

Z

UI

O

z

m

a

u

T-

tn

woe

0

u.

V

UJ

Z

J

O

OC

3.

D.

U .

O

r

s

s

3

<

at

M

o

a

a.

o

M

3

O

o

a

c

£ _

o.

c

E

0)

-

m

><

Q)

o

2

•c

o

o

o c 2; .^

z

«

*

ra

u

« ̂ 0)

Q- c o

ID

o

•S

o

I- •> O

O OJ •

>•

J 5 ro

Q.

O

w

-•

Q_

E

CO

E

o

1—

to

~

w

n

A

o

j

e

c

t

en

t

c

l

a

o

,c

1 -

0)

r

s

h

i

p

0)

a

c

ro

x :

0 }

g

a

h

c

5

• a

"o

3>

§,̂

•

e

n

e

u

r

r

i

n

i

a o

~

0)

Hi O

ro

c

ra

E

o

o

c

CO

»

g8

is

il

ra c

LU

CO

5

o

o

ro

5 a

O

C

o o

O | ^

eg

< ra

2 Q)

•a jc ,2

o Q. a

t-a o

£

— ro

,E LU

o

c

o

OT

£

o

... o

i

c

l

O l

o

o

o

o

ro

o

o

ra

o

O

o

c

0)

i o

o

o

c

o

c

< E

ro — -

c c

E

£ ^•,E E

fC

3 >

D

O

6 S E ^ E S

0)

W

n

0)

I

1J y

D C — c - £

O D

.C ,— Q) a)

«

raS-S ro «

-

o 3 *. £-D

ra

"5.

^ c

^

o -2

Q ^

• *-* rtv

C

c ~ 5) - '

Q..Z » ^ g ^'

o 3 i; Q -S J?

•" 0) — £ c J;

c

«

CO

,„ Q) 2

UJ U N ,« Q. E

x :


4/18

that an Estee Lauder has for which

fragrances will sell and which will no t.

The editors oi MAD Magazine reported

th at they respond more to their instinct,

feel, and intuition while other maga-

zine editors respond to market forecasts

and ana lyse s. Iacocca described this a s

a feel for the problem and a decisive

ability to make decisions when others

are still looking for facts (Iacocca

1984).

The successful entrepreneur is also

described as having strong drives for

independence and success, with high

levels of vigor, persistence, and self-

esteem. This individual ha s, if nothing

else, an exceptional belief in himself

(herself) and his (her) abilities. The

individual is what he/sh e is and

significant change may not be possible

(Roscoe 1973). A ttention is paid to such

traits as energy, perseverance, vision,

and single-mindedness, or such abil-

ities as being inspirational or moti-

vational- Other traits frequently men-

tioned include physical attractivene ss

(including height, weight, and phy-

sique),

popularity and sociability, intell-

igence, knowledge, judgment and flu-

ency of speech; also tact, diplomacy,

and decisiveness.

Which of these traits is most im-

portant? Are some importan t all of the

time,

or are all of them im portant some

of the time? There is little evidence to

suggest that certain traits are asso-

ciated with successful entrepreneurs.

Early leadership research, attempting

to describe the gr ea t peo ple by

identifying inborn traits, came to a

similar conclusion. Researchers did,

however, conclude that traits will not

totally describe the elements of leader-

ship and that many situational ele-

ments influence who will be a suc-

cessful leader and who will not (Yukl

1981).

depend upon elaborate concepts and

jargonistic definitions; (2) the theory

defines an entrepreneur by the concepts

and traits most valued; and (3) the

theory is commonly understood by

others and contains common sense

truths about people.

The Psychological Characteristics

School of Entrepreneurship

It is widely thoug ht that one's needs,

drives, attitudes, beliefs, and values

are primary determinants of behavior

(i.e., w hat one does). People behave in

accordance with their values far more

often than not, despite variations in

situations. Similarily, one's behavior

results from attempts to satisfy needs,

be they for power recognition, achieve-

ment, or acceptance and love.

This psychological school, wbich

focuses on personality factors, believes

that entrepreneurs hav e unique values

and attitudes toward work and life.

These, along with certain dominant

needs, propel the individual to behave

in certain ways. Entrep reneurs can be

differentiated from non-entrepreneurs

by personality characteristics.

People who possess the same char-

acteristics as entrepreneurs do,

will

have

a higher tendency (or potential) to

perform entrepreneurial acts, than do

people who do not possess such char-

acteristics (Lachman 1980).

Three personality characterist ics

have received considerable attention

in the research : (1) the personal values

such as honesty, duty, responsibility,

and ethical behavior; (2) risk-taking

propensity; and

3)

the need for achieve-

ment.

Personal value system Is it merely

socially desirable for entrepreneurs to

be honest a nd upright, h ave a sense of

responsibility an d duty to other people,

be ethical, incorruptible, scrupulous,


5/18

fictional and real-life—which present

the entrepreneurs as unethical, unscrup-

ulous, dishonest, and totally self-ori-

ented. However, studies of entrepre-

neurs indicate that many are highly

ethical

and

socially responsible, com-

pared

to

the general population {Cun-

ningha m and Lischeron, forthcoming).

This school generally believes that

entrepreneurs cannot he developed or

trained in classroom situa tions . Much

ofthe entrepreneur's ahiiity relates to a

perso nality or style of hehavior which

develops over time, primarily through

relationships with paren ts and teachers

early in

life.

Values and ideals, fostered

in one's family, school, church, com-

munity, and even culture, stay with the

individual and guide him or her for a

lifetime. These va lues are learned and

internalized, and reflect the process of

socialization into

a

culture. Personal

values

are

hasic

to the way an

indi-

vidual behaves

and

will

be

expressed

regardless ofthe situation.

Risk taking propensity.

John

Stuart Mill,

in

introducing

the

term

e n t r e p r e n e u r s h i p

to the

field

of

economics, suggested th at risk-bearing

is

the key

factor

in

dist inguishing

entrepreneurs from managers (Mill

1984). Some writers suggest that the

entrepreneurial function primarily in-

volves risk measurement and risk-

taking (Palmer

1971).

The risks involve

not only financial success,

hut

career

opportunities, family relations,

and

psychic well-being (Liles 1974, Sara-

chek 1978). Schumpeter (1934)

dis-

agreed, avowing that risk-taking is

inherent in ownership and tha t entre-

preneurs, the combiners, are not neces-

sarily owners. Nevertheless, three

recent dictionary definitions

of

entre-

preneurship

{Random House 1967,

Webster s

1966,

Funk

and

Wagnalls

1968 all include the notion of assum ing

skills

in

Las Vegas. In stead , ent-repre-

neurs prefer to take moderate risks in

situations w here they have some degree

of contro l or skill in realizing a profit.

They do not prefer situatio ns which

involve either extremes

of

risk

or

certainty {McClelland 1961, McClel-

land and Winter 1969).

Much ofthe entrepreneurial literature

has included risk taking

as a

major

character is t ic

of the

entrepreneur .

Practicing entrepreneurs and business

managers have also felt it to be im-

portant. The current chairman of the

Ford Motor Company provided the

following statement

on

risk-taking

in

entrepreneurship;

We are allowing our m anagers to act

more like entrepreneurs, like the owners

of the ir own business—to let them know

there are rewards for sensible risk-tak ing.

W henlsay risk-takmg , I'm not talking

about seat-of-the-pants adventurism.

I'm not talkin g ahout a Las Vegas roll of

the dice. I m talking ahout a seasoned

judgement that allows decisions to be

made in a timely way—judgement that

doesn't require every issue to he studied

to th e point of exhaustion (Gordon 1985).

Some writers (the Classical School)

pointedly distinguish entrepreneurial

activity from management activity

by

insist ing that

one is no

longer

an

entrepreneur once the innovative/cre-

ative activity is completed. Yet, as early

as

the

late seventeenth century, Can-

tillion described the entrepreneur as a

rational decision-maker who assumed

the risk and provided the m anagem ent

of the firm {Kilhy 1971).

Need for Achievement.

Industrious-

ness and the need for achievement are

specific values broadly held by many

individuals in certain cultures. The

individual who has learned

the

value

of industriousness

in the

process

of

growing

up is

most likely

to

have

a


6/18

Theory of Capitalism

concluded that

ome cultures achieve more than others

because of the values of their people.

The development of capitalism and

entrepreneurial drive are largely due to

the cultural values whieh are dom inant

in certain countries. Protestan t values

encourage the need for achievement

since a person's life is to be judged by

his or her aecomplishments (Hagen

1962; MeClelland 1961; McClelland and

Winter 1969; McClelland, Atkinson,

Clark, and Lowell 1976; Weber 1905,

1958).

The belief that entrepreneurs might

have a distinctly higher need for

achievement is widely held (McClelland

1965), However, the need for achieve-

ment, isolated from other variables,

may be a weak predictor of an indi-

vidual's tendency to start a business

(Hull, Bosley, and Udell 1980). Having

such a need and finding oneself blocked

and frustrated by the bureaucracy of

large organizations provides the con-

ditions, according to this school, to

propel the ind ividual into a n entrepre-

neurial venture.

In sum mary, the psychological school

of entrepreneurship believes that cer-

tain individual values and needs are

the necessary preconditions for entre-

preneurship. Since these values are

learned early in life and are well-

established prior to adulthood, entre-

preneurial characteristics are hard to

inculcate in universities and schools.

Characteristics whieh have received a

great deal of atte ntion include: need for

achievement, locus of control, risk-

taking, tolerance of ambiguity, and

type A behavior (Begley and Boyd

1987;

Brockhaus,

Sr

and Horwitz 1986).

The lassical School

of Entrepreneurship

tinguishes between a m ana ge r and

an entrepreneur. The word derives

from the French verb entre pren dre,

meaning to undertake and was

trans-

lated from the Germ an verb unter-

neh m en which also m eans to under-

take. In the early sixteenth century,

entrepreneurs were thought of as

Frenchmen who undertook to lead

military expeditions. The term was

broadened by 1700 to include contrac-

tors who undertook to build for the

military: roads, bridges, ha rbo rs, forti-

fications, and the like. At that time,

French economists also used the word

to describe people who bore risk and

uncertainty in order to make innova-

tions (de Farcy 1973, Berthold 1951).

These definitions encompass the notion

of unde rtakin g (or founding) a venture

(or adventure) which h as an element

of

risk and requires some creativity or

innovativeness.

One migh t argue th at the dilution of

the term, and hence today 's confusion,

began around the turn of the century.

In 1885, the

Oxford University Dic

tionary

used the term to describe the

director or m ana ger of a public m usical

institution: one who gets up entertain-

ments . . . . A contractor acting as

intermediary between capita l and

labou r. Th is definition reinforces the

notion of innovation and organization

of talent or people, but excludes the

element of risk by an owner (i.e., a

public institution is not owned by a

single individual). Hence, the critical

aspect of entrepreneurship appears to

be the process of do ing rath er than

ow ning a venture or business(Hebert

and Link 1982).

Indeed, according to Schumpeter

(1934), the key ingredient of entrepre-

neurship lies in the innovativeness of

the individual and may not involve


7/18

duction, then, these com hiners need

not necessarily be owners.

Innovation, creativity, or discovery

are the key faetors underlying the

classical hody of thou ght and research.

Entrepreneurship, in this view, refers

to the process of creating an oppor-

tunity or, as a current writer suggests,

th e op portuni ty-se eking style of

management that sparks innovation

{Peterson 1985). As an entrepreneur

exp lains it, You have to he a creative

dreamer, be able to visualize w here you

will be in

years from now . . . .

(Peterson 1985).

Frequently, creativity is associated

with fervent individualism or inde-

pendence bordering on nonconformity.

It is sometimes perceived as antisocial

behavior having an impact on estab-

lished ways of thinking or behaving.

The discoveries of Galileo, Newton,

and Darwin, for instance, initially

encountered more resistance than

enthusiastic support.

Because every creative act overpasses

the established order

in some way and in

some degree, it is likely at

first

o appear

eccentric to most men. An inventor

ordinarily must begin in isolation and

draw the group to himself only as it is

discovered, sometimes very slowly, that

he has invented some part of what they

are in need of (Ghiselin 1952).

Many innovative people, in describ-

ing their creative process, have em pha-

sized its subjectivity and individualistic

nature. The innovator is often moti-

vated to satisfy personal needs, and

sometimes has little regard for the

interests of society or organizations.

There is little concern for the reactions

of others, as a statement from Picasso

suggests:

How would you have a spectator live my

picture as I have lived it? A picture comes

to

me

from far off,

I

divined it,

I

saw

it

I

desires, my thoughts, which have taken

a long time to elaborate themselves and

bring themselves to the light, ahove all

seize in them what I have brought about,

perhaps, against my will? Zervos 1952).

A more current example of creative

and innov ative bebavior can be seen in

the story of Apple Computer. Steve

Jobs, one of the co-founders, is char-

acterized as an innovative, energetic

individual who was able to excite others

and stimulate their creativity in order

to launch what is essentially a new

industry. One wonders if Schumpter

would have predicted Job s' demise once

the venture was up and running. The

same energy which drives an entrepre-

neur might sow the seeds for the des-

truction of effective management and

administration, if the case of Steve

Jobs is a representative example.

The Management School

of Entrepreneurship

As in most fields of organizational

study, entrepreneursh ip draws heavily

from management theory. The initial

definitions of management gained

acceptance because they seemed intui-

tively logical and were thus acceptable.

Thesedefinitions, many of which might

parallel the initial tradition of Henri

Fayol, suggest tha t m ana gers perform

a number of functions such as plan-

ning, organizing, staffing, budgeting,

coordinating, and controlling (Fayol

1916, 1950; Follett 1942; Gulick 1937;

Mooney and Reiley

1931;

Taylor 1911;

Urwick 1933).

The management school suggests

th at an entrepreneur is a person who

organizes or mana ges a business under-

taking , assum ing the risk for the sake

ofprofit (We6s(er's

1966).

John Stuart

Mill, in describing the entrepreneur,

noted that in addition to risk-taking,

the functions of an entrepreneur include

supervision, control, and providing


8/18

relate to start-up: strategizing, devel-

oping the business plan, getting started,

a n d m a n a g i n g d e v e l o p m e n t a n d

growth (Good 1989, Kao 1989). Other

writers define th e trans ition of moving

from entrepreneurial to professional

management as a strategy of coordi-

nation which includes the manner in

which responsibilities are delegated

and the degree of formality with which

those tasks are controlled (Roberts

1987). Certain functions might include

developing formal business plans,

analyzing opportunities, acquiring

resources, and working toward goals

(Bird 1988). Many university and

eollege courses offered

to

en trepreneurs

use the material gleaned from text-

books written for managers of large

organizations. There may not be sub-

stantial differences between entrepre-

neuria l marketing and other marketing

courses, or between venture capita l and

other finance courses, or at least not

enough to warrant separate courses

(Vesper 1985).

This m anage m ent school deals with

the technical aspects of management

and seems

to e

based

on

the belief tha t

entrepreneurs can be developed or

trained in the classroom. Since many

entrepreneurial ventures fail each year,

a significant proportion of these fail-

ures might be traced to poor m ana ging

and decision making, as well as to

financing and marketing weaknesses.

According to this school, entrepreneur-

ship is a series of learned activities

which focus on the central functions of

managing a firm. The management

school is directed at improving a per-

son's management capability through

developing his or her rational, an alytic,

and eause-and-effect orien tation . Since,

according to this sehool, entrepreneur-

ship can be taught, a central aim is to

identify the specific functions involved

ture finance are quite appropriate

(Boberg 1988). T ra in in g in th ese

ma nagem ent functions can, it

is

hoped,

help reduce the number of business

failures.

The Leadership S chool

of Entrepreneurship

An entrepreneur is often a leader

who relies on people to accomplish

purposes and objectives. The leadersh ip

school of entrepreneurship is a non-

technical side of the management

school, which suggests that entrepre-

neu rs need to be skilled in appealing to

others to join the cause. A successful

entrepreneur mus t also be a people

m ana ger or an effective leade r/men tor

who plays a m ajor role in m otivating,

directing, and leading people. Th us ,

the entrepreneur must be a leader, able

to define a vision of what is possible,

and attr ac t people to rally around t ha t

vision and transform it into reality

(Kao 1989).

There are two stre am s of writings

concerning entrepreneurial leadership.

The first stream of development has

been grouped within the gre at person

school, and describes the writings

which suggest that certain traits and

personal characteristics are important

for success. The gre at person sehool

follows early leadership research which

suggests that traits such as adaptabil-

ity to situations, eooperativeness, en-

ergy, and willingness to take respon-

sibility are im porta nt aspects of success

(Stogdill and Suttell

1948,

Stogdill 1974,

Bass 1981).

The most pervasive stream of the

leadership school is concerned with

how a leader gets tasks accomplished

and responds to the needs of people

(Hemphill 1959). Two dimensions are

important for the management of an

enterprise—a concern for getting the


9/18

seareh which tried to descrihe the

esse ntial aspects of leadership (Hemp-

hill 1959).

More recently, there have been sug-

gestions that leaders should adjust

their leadership style hased on the

situations facing them (Fiedler 1966).

Entrepreneurial leadership involves

more than personal traits or style in

relating to others. The role can be a

focal point for change and inculcating

values, and it can involve the skills of

settin g clear goals and c reating oppor-

tunities. These include the skills of

empow ering people, preserving organi-

zational intimacy, and developing a

human resource system (Kao 1989).

This school describes a leader as the

social architec t (Bennis and Nanu s

1985), or as one th at is prim arily an

expert in the promotion and protection

of valu es (Peters and Waterman, Jr.

1982). These values m ight he like those

of IBM's Watson, who emphasized

resp ect for the ind ivi du al , and

Tiffany's Walter Hoving, who suggest-

ed th at we should be true to our own

aesthetic.

Certain writers make the distinction

between leading and exerting mana-

gerial control over people. The entre-

preneur

s

embedded in a complex social

network that can inhihit or enhance

venture development. The network can

provide ideas, access to needed re-

sources, the commitment and assist-

ance to carry out a task, and the skills

of involved employees. It has been

proposed that more effective leaders

are those who can create a vision,

develop commitment to that vision,

and institutionalize it (Bennis and

Nanus 1985).

This school implies th at leaders m ust

be effective in developing a nd mentor-

ing people (Levinson et al. 1978). The

leader is an experienced mentor by

entrepreneur is more than a manager,

but also a leader of people (Carstud et

al.

1986).

The Intrapreneurship School

of Entrepreneurship

The intra pren eurs hip school evolved

in response to the lack of innovative-

ness and competitiveness within organi-

zations. Intrapreneurs, to the limited

extent tha t they possess discretionary

freedom of action, are able to act as

entrepreneurs and implement their

ideas without themselves becoming

owners. Alertness to opportunities is

one dimension of intrap rene urial activ-

ity. Such strategic behavior provides

the means for extending the organi-

zation's activities and discovering

opportunities (Ellis and Taylor 1987).

This allows existing organizations to

develop and diversify their activ ities in

other areas (Burgelman 1983). Intra-

preneurship involves the development

of independent units designed to cre-

ate, market, and expand innovative

services, technologies, or methods

within the organization (Nielsen et al.

1985).

Some question arises as to why the

intrapreneurship school should be

considered a school of entrepreneur-

ship. Entrepreneurial and administered

(bureaucratic) activity have long been

considered a s polar opposites, although

Schumpeter noted tha t successful entre-

preneurial activity often leads to

organization building and to entrepre-

neurs becoming m anag ers (Schumpeter

1934).

The intrapren eurial school generally

assumes tba t innova t ion can be

achieved in existing organizations by

encouraging people to work as entre-

preneurs in semi-autonomous units.

However, there are indications that

large corporations have been unsuc-


10/18

tures often leave the company, some-

timeL-wn frustration, to start their own

entrepreneurial venture (Knight 1988).

Their departure may indicate that

entrepren eurial forces m ight

he

at odds

with normal managerial activity, or

that conventional organizations have

not been able to use the intrapreneur-

ship model to their best adva ntag e. The

success of the intrapreneurial model

seems to depend on the abilities of

operational level pa rticipants to exploit

entrepreneurial opportunities. It also

depends on whether or not managers

in the overall corporate structure see

the need to exploit these opportunities.

The intrapreneurial school does not

just provide a model for encouraging

burea ucratic creativity. As a school, it

is

not merely an attem pt to give freedom

to a group of people so th a t they can be

entrepreneurial. It also requires indi-

viduals to work with others in teams,

much more than entrepreneurs do.

When individuals work together in

groups,

they are better ahle to recognize

the importance of political needs and

understand how to implement their

ideas. In this sense, intrapreneurship

is a tea m model whereby individuals

are asked to work together in solving

problems and creating opportunities.

Building a balanced te am (Echert et

al. 1987) requires the ahiiity to use

people effectively in groups, where

tasks require different input from team

members. For some tasks, intrapre-

neurial activities may require the input

of professionals, while in others the

support and assistance of operational

workers may be needed.

Intrapreneurial activities can focus

on strategic redirection, organ izational

duplication, product development, and

operational efficiency, as illustrated in

figure 1. Strategic intrap rene urship

may require the involvement of key

adding to the existing corporate facil-

ities. Organizational intrapreneurship

may require the com mitment of a cross

section of people as they take respons-

ihility for duplicating the organiza-

tion's tasks in other regions or divi-

sions. Product intrapre neu rship might

involve people who are familiar with

product development and market con-

ditions. The goal is to develop new

products hy capitalizing on existing

corporate facilities. Operational stra-

tegies focus on improving the quality

and efficiency of the services offered.

SELECTING AN APPROPRIATE

ENTREPRENEURIAL MODEL

There is a need to reconcile these

variou s schools of entrepreneursh ip by

recognizing the importance of all of

them. Each school provides different

insights about the many facets of

entrepreneurial behavior (Woo et al.

1988) (see tab le 2).

ne facet of entrepreneurial behavior

has been described by personal quali-

ties or values while another indicates

th at antic ipating the future and finding

and recognizing opportunities are key

attributes. A third facet suggests that

the success of an entrepreneur might

be improved hy technical and non-

technical managerial skills. A fourth

facet recognizes the need to cha nge the

direction ofa venture.

Each ofthe m odels is hased on certain

assum ptions ahout hehavior. Each set

of criteria, including past events, per-

ceptions, traits, or personal principles

and characteristics, provides different

types of insight. For example, success

in the future might

be

better understood

hy und erstand ing the past history and

principles of successful entrepreneurs.

Success might he explained hy under-

standing entrepreneurs' ways of man-

aging people or knowing how they set


11/18

Figure

FOCUS ON INTRAPRENEURIAL AOTIVITIES

Strategic

Redirection

Organizational

uplication

Product

evelopment

Operational

fficiency

important than anotber is like trying

to say that one religion is more godly

than another. The definit ions and

criteria of each school in table 2 are

based on their own traditions and have

their own assumptions and implica-

tions for research , training , and educa-

tion. Definitions of entrepreneurship

vary widely and involve creating,

finding opportunities, ma nag ing, con-

trolling, and ch ang ing . They are based

on criteria ranging from decision

making, creativity, technical expertise/

knowledge, experiences, and values to

the way in which entrepreneurs lead

and develop groups of employees to

work for them.

The c riteria of each school provide an

example of the type of research and

training emphasized by that school.

The classical school emphasizes criteria

such as creativity and decision making

and focuses on seeing opportunities

and getting the venture started. The

histories, principles, and life stories of

successful people offer valuable ex-

amp les and may, in some cases, provide

valuable personal guidance. The re-

search and training provided by the

psychological school suggests that

certain values and behaviors are im-

portant, such as risk-taking, the need

for achievem ent, and others. The tech-

nical knowledge of the management

school provides tools for managing,

ranging from planning to accounting;

the leadership school offers sugges-

tions for leading and motivating

tions and emphasizes the development

of teams for creative problem solving.

These schools of entrepreneurship

address a range of entrepreneurial

perspectives such as evaluating one's

personal values, identifying opportun-

ities, planning and acting, and re-

assess ing. F igure 2 sugges ts tha t

entrepreneu rship might be viewed as a

reiterative process and tha t each ofthe

schools might provide insights into

different aspects ofthe phenomenon.

The psychological and great person

schools might be very helpful in a

personal assessm ent of one's entrepre-

neurial values and a questioning of

which values are most useful for

success. This should not imply that

there is a need to search for personal

psychological law s of entrepreneur-

ial effectiveness. Conceivably, one can

learn a great deal about oneself by

und erstanding one's values and drives,

in addition to those that describe

successful entrepren eurs. Rather, what

are one's values, behaviors, and atti-

tudes toward work? How do they com-

pare with those held by successful

entrepreneurs? Jud ging from this com-

parison, w hat are one's strengths and

weaknesses?

Other schools provide important in-

sights about the process of recognizing

and creat ing an oppor tuni ty. The

classical school has described the

process for identifying opportunities

and taking action. The management


12/18

.2 <

lU

Ik

o

S

S

3

re

c

O

O

• D

V>

V

p

_c

a

re

m

e

o

V

'P

o

re

3

O

CO

«

(0

a)

ro

o

>

CO

V)

Q..5

is

-— to

tn

25

11

o

fc

r >

o 0) ra

- — '-' t

0) O c O

i; o

3 3

O T3

o 9

O)

_o

o

ft-, c-

3 C ^

•c o £

o

a i

0) O 3

3

t:

o

a

5

II

(0 C

n ra (0

o S £

• ^ (0

V 0) U

CO re ra

re re re

^ .c ^

l

e

a

o

03

m

a

3

O

o

T 3

O

X

a

re

• D

re

• a

c

ra

c

h

3

o

o

• a

o

I

Ol

©

E

c

o

*(/

o

•C.

< O) . c

- S 2 E «

o)

^ ra 3 E ;

3

« F D) c a> .

e E S

'̂

I

s

^ ^ -p. ra P c ^

a>

o

.*: c

.c

re

o

c

re

o

O

.5 ° >

o o B

0 £

t: c

0] O

o>>,s

O re


13/18

Figure 2

THE ENTREPRENEURIAL PROCESS

RECOGNIZ ING

OPPORTUNIT IES

EV LU T ING

SELF

CT ING ND

M N G I N G

RE SSESSING NEED

FOR CH NGE

efficient and for motivating people.

These skills involve technical tasks

such as planning and financing and

the human relations know-how neces-

sary for dealing with employees.

Every entrepreneurial venture, at

some stage, must question its present

operation and future direction. In this

regard, the intrapreneursh ip school can

ass ist in redirecting present operations.

The foregoing conception of the entre-

preneurial process does not attempt to

mix the assump tions and philosophies

of the different schools. Rather, entre-

preneurship is seen as a reiterative

process of personal evaluating, plan-

ning, acting, and reassessing which

encou rages people to take on responsi-

bility for creation and inn ovation. This

process involves creating the idea,

assessing one s personal ab ilities, and

taking actions now and in the future. It

assumes that entrepreneurs have the

responsibility for the venture, or share

some of the risks and rewards of it.

CONCLUSION

has sought to avoid the debate over

which school or set of criteria is most

useful. The judgment concerning each

model s appropriateness depends upon

the researcher s assessm ent of its facil-

i ty for explaining and improving

certain aspects of the entrepreneurial

process. The selection of an entrepre-

neu rial model depends on the informa-

tion the researcher or educator wishes

to emphasize in focusing on different

aspects of the entrepreneurial process.

The psychological and great person

schools migh t be helpful in a personal

assessm ent of an entreprene ur s val-

ues,

while the classical sehool might

provide insights about the process of

creating an opportunity. The manage-

ment an d leadership schools might be

helpful for unde rstan ding the ran ge of

technical and interpersonal ski l ls

necessary for making an operation

efficient and for motivating people.

The intrapreneurship school might

ass i s t in redi rec t ing the present

operations.


14/18

ing. I t assumes people have the

respbnsibility for the venture, or that

they assume some of the risk and

rewards of it. The various schools of

thought provide different insights for

recognizing underlying values, respond-

ing to the future, improving manage-

ment, and changing and adapting.

Selectively utilizing the in sights of the

different schools of thought depends

upon one's research agenda or practical

goals. However, it may not be pruden t

to suggest t ha t our knowledge of entre-

preneurs can he ohtained hy focusing

on the criteria of only one school of

thought. An understanding of entre-

preneurs and their ventures requires

criteria from each facet of the overall

process: entrepreneurs' personal per-

spective, their ways of identifying

opportunities, their methods of acting

and man aging, and their m echanisms

for adapting and reassessing.

REFERENCES

Bass,BM.{l^8l), Stogdill s Hand book

of

Leadership.

New York; Free Press.

Bennis, Warren, and Bu rtNa nus (1985),

Leaders: The Strategies for Taking

Charge,

New York; H arper and Row,

UO-151.

Begley, M. W., and D. P. Boyd (1987)

Psychological Characteristics

Asso-

ciated with Performance in En-

t repreneur ia l F i rms and Smal l

Businesses, Journal of Business

Venturing 2,79-93.

Berth old, H. F. (1951), Th e Ea rly

History of Entrep reneurial Theo ry,

Explorations in Entrepreneurial

History 3, 193-220.

Bird, Ba rbara (1988), Implem enting

Entrep reneurial Ideas: The Case for

Intention, Academy of Manage-

ment Review 13, 442-453.

Boherg, A. L. (1988), Chang ing Pat-

terns of Demand: Entrepreneu rship

Wayne A. Long, W. Ed McMullan,

Karl H. Vesper, and William E.

Wetzel,Jr.,WellesIey,Mass.;Bahson

College, 660-661.

Brockhaus, R. H., Sr. and P . S. Horwit

(1986), Th e Psychology of the

En t rep reneu r , in The Art and

Science of Entrepreneurship, ed. D.

L. Sexton and R. W. Smilor, Cam-

bridge: Bailinger, 25-48.

Burgelm an, R. A. (1983), Corpora te

Entrepreneursh ip and St ra teg ic

Management; Insights from a Pro-

cesB Study, Management Science

29,1349-1364.

Carsrud, A. L., C. M. GagHo, and K. W.

Olm (1986), Entrepreneurs— Men-

tors,

Networks, and Successful New

Venture Development An Explora-

tion, in F rontiers of Entrepreneur

ial Research, ed. Robert Ronstadt,

John A. Hornaday, and Karl H.

Vesper, 229-235.

Carland, James W., F. Hoy, W. R.

Boulton, and J. C. Carland (1984),

Differentiating Entrepreneurs from

Sm all Business Owners: Concept-

ualization, Academy of Manage-

ment Revietv (2), 354-359.

Churchill, Neil C, and Virginia Lewis

(1986), Entrepreneurial Research:

Directions and M ethods, in The

Art and Science of Entrepreneurship,

ed. D. L. Sexton and R. W. Smilor,

Cam bridge: Bailinger 333-365.

Cunningham, J. B. and J. Lischeron

(fortheoming), Entepreneurial Inno-

vation.

de Farcy, Henri (1973), Esprit d enter-

prise et developpement economique,

Archives Internationale de Socio-

logue de la Cooperation et du

Developpement

33, 3-42.

Echert,

L. A.,

J . D. Ryan,

R.

J.

Ray,

and

R. J. Brace (1987), Canadian Small

Business: An Entrepreneur s Plan,


15/18

M inneapolis, Minn.: Perfomax Sys-

tems International.)

Fayol, Henri (1950),

Administration

Industrielle el Generate, Par i s :

Dunod. (First published 1916.)

Fiedler,

F.

E.

(1966),

The Contingency

Model: A Theory of Leadership

Effectiveness, in Basic Studies in

Psychology,

ed. H. Proshansk y and

B. Seidenherg, New York: Holt,

Rinehart an d W inston,

538-551.

Follett, M. P. (1942), Dynam ic Admin-

istration,

The Collected Papers of

Mary P arker Follett

ed. H. Metcalf

and L. Urwick. New York: Harper

and Row.

Funk and Wagnalls Standard College

Dictionary

(1968). New York: Funk

and W agnalls.

Garfield, Charles (1986), Pea/fePer/orm-

ers:

The New Heroes of American

Business,

Now York: Avon Books.

Gartner, W. B. (1985), A Conceptual

Framework for Describing the Phe-

nomena of New Venture Creation,

Academ y of M anagem ent Review

10,696-706.

Ghiselin, Brewster(1952),

TheCreative

Process. Berkeley, Calif.: University

of California Press.

Good, W. S. (1989),

Building a Dream:

A Comprehensive Guide to Starting

a Business o f Your Ow n.

Toronto:

McGraw-Hill.

Gordon, M. M. (1985),

The lacocca

Management Technique. New York:

Dodd, Mead, and Com pany.

Gulick, Luther H.

(1937),

Notes on the

Theory of Org aniza tion, in

Papers

on the Science of Adm inistration,

ed. L. H. Gulick and L. F. Urwick.

New York: Columbia University

Press.

Hagen, Everett Einer (1962), On the

Theory of Social Change.

Home-

wood,

111.:

Irwin Press.

Hebert, Robert F. and Albert N. Link

Hem phill, J . K. (1959), Jo b Descrip-

tions for Executives,

Harvard

Business Review

7 (Sept.), 55-67.

Hughes, Jonathan R. T. (1986),

The

Vital Few: American Econom ic

Progress and Its Protagonists.

New

York: Oxford University Press.

Hull, D. L.. J. J . Bosley and G. G. Udell

(1980), Renew ing tbe Hunt for the

Heffalump: Identifying Potential

Entrepreneurs by Personality Char-

acteristics, Journal of Small Busi-

ness Management

18 (1), 11-18.

lacocca. Lee (1984), lacocca: An Auto-

biography,

New York: B an tam

Books, 53-56.

Kao, R.

W.

Y. (1989), Entrepreneurship

and Enterprise Development. Toron-

to:

Holt, Rinehart and Winston of

Canada, Limited.

Kilhy, P. (1971),

Entrepreneurship and

Economic Development. New York:

Free Press .

Knight, R. M. (1988), Spinoff Entre-

preneurs: How Corporations Really

Create En trepreneu rs, in

Frontiers

of Entrepreneurial Research, ed.

Bruee A. Kirchhoff Wayne A. Long,

W. Ed McMuUan, Karl H. Vesper,

William E. Wetzel, Jr., Wellesley,

Mass.: Babson College, 134-150.

Lachman, R. (1980), 'Tow ard M easure-

ment of Entrepreneurial Tenden-

cies, Management International

Review

2

(2), 108-116.

Levinson, D. J., with C. N. Darrow, E.

B. Klein, M. H. Levinson, and B.

McKee (1978),

The Seasons of a

M an s Life.

New York: Ballantine

Books.

Liles, Patrick R. (1974), Who Are the

En t rep reneu r s?

MSU Business

Topics 22(1), 5-14.

McClelland,

D.

C.

(1965), The A chieving

Society. Princeton:

D.

Van Nostrand.

McClelland, David

C.

(1965), Achieve-

ment Motivation Can Be Devel-


16/18

VJinter 1969), Motivating Econo mic

Achievement.

New York: Free

Press.

McClelland, David C , J . W. Atkinson,

R. A. Clark , and E. I. Lowell (1976),

The Achievement Mo tive. New York:

Irvington.

Mill, J. S . (1984), P rinciples of Political

Econom y with Some Applications to

Social Philosophy,London . JohnV^.

Parker. 32.

Mooney, J. D.. and A. C. Reiley (1931),

Onw ard Industry, New

YOTVH

Harper

and Row.

Nielsen, R. P., M. P. Peters, and R. D.

Hisrich (1985), Intr ap ren eu rsh ip

Stra tegy for In te rna l Markets -

Corporate, Non-profit, and Govern-

ment Institution Cases,

Strategic

Management Journals, 181-189.

The Compact Edition of the Oxford

English Dictionary

1911). London:

Oxford University Press.

Paulin, William L., Robert E. Coffey,

and Mark E. Spaulding (1982),

Entrep reneu rship Research; Meth-

ods and Directions, in

The Ency-

clopedia of Entrepreneurship, ed.

Calvin A. Kent, Donald L. Sexton,

and Karl H. Vesper, Englewood

Cliffs, N.J.: Prentice H all, 352-373.

Palm er, M. (1971), The Application of

Psychological Testing to Entrepre-

neurial Potential, California Man-

agement Review 13, 32-38.

Peters, T. J. and Robert J. Waterman,

Jr. (1982), In Search of Excellence.

New York: Harper and Row.

Peterson, Rein (1985), Raisin g Risk-

takers, Metropolitan Toronto Busi-

ness Journal

7

(7), 30-34.

Peterson, Rein, and Deszo Horvath

(1982), Com men tary on Research

in the Field of En trepren eursh ip, in

The Encyclopedia of Entrepreneur-

ship,

ed. Calvin A. Kent, Donald L.

Sexton, and Karl H. Vesper, Engle-

wood Cliffs, N .J.: Prentice Hall.

of E ntrepreneurship, ed. Calvin A.

Kent, Donald L. Sexton, and K arl H.

Vesper, Englewood Cliffs, N.J.:

Prentice Hall.

The Random House Dictionary

(1967).

New York: Random House.

Roberts, M. (1987), M aking the Tran -

sition from Entrepreneurial to Pro-

fessional Management, in Frontiers

of Entrepreneurship Research, ed.

Neil C. Churchill, John A. Horna-

day, Bruce A.

Kirchhoff.

O. J.

Krasner, Karl H. Vesper, Wellesley,


Roscoe, Ja m es (1973), Can En trepre-

neurship Be Tau ght? MBA Maga-

zine June-Jnly).

Sarachek, Bernard (1978), Am erican

Entrepreneurs and the Horatio Alger

Myth, Journal of Econom ic His-

tory 38 439-456.

Schumpeter, J . A.

(1934), The Theory of

Economic

Development.

Cam bridge,

Mass.: Harvard University Press.

Sexton , Donald L. (1982), Research

Needs and Issues in Entrepreneur-

s h i p , in The Encyclopedia of

Entrepreneurship, ed. Ca lvin A.

Kent, Donald

L.

Sexton, and Karl H.

Vesper. Englewood Cliffs, N.J.:

Prentice Hall.

Silver, David A. (1985), Entrepre-

neurial Meg abucks: The 1 Greates

Entrepreneurs of the Last Twenty-

five Years. New York: John Wiley

and Sons.

Stevenson,

H. H.

(1988), General Man-

agemen t and Entrepren eurship, in

Frontiers of Entrepreneurial Re-

search, ed.

Bruce A.

Kirchhoff

Wayne A. Long, W. Ed McMuUan,

Karl H. Vesper, WiUiam E. Wetzel,

Jr., Welleslesy, Mass.: Babson Col-

lege, 667-668.

Stogdill, R. M. and B. Suttell (1948),

Personal Factors Associated with

Leadership: A Survey ofthe Litera-


17/18

Leadership. New York: Free Press,

Taylor, F. W. (1911),

The Principles of

Scientific Management.

New York:

Harper and Row.

Urwick, L, (1933),

Management of

Tomorrow. New York: Nishet.

Vesper, Karl (1985), New Develop-

ments in Entrepreneurship Educa-

tion, in

F rontiers of Entrepreneur

ship Research,

ed. Horna day et al.,

Wellesley, Mass.: Babson College.

Weher,Max(1905,1908), r/ie Pro tes tant

Ethic and the Spirit of Captialism,

t rans . T. Pa rso ns . New York: Scrib-

ner's Sons.

Webster s T hird New International

Dictionary

(1966). Chicago: Rand

McNally and Sons.

W o o ,

C. Y., A. C. Cooper, and W. C.

Dunkelberg (1988), Entrepreneurial

Typologies: Definitions and Impli-

cations, in Frontiers of Enirepre-

neurship Research, ed.

Bruce A.

Kirchoff, Wayne A. Long. W. Ed

McMullan, Karl H. Vesper, and

William E. Wetzel, Jr., Wellesley,


Wortman,

M .

S.

(1987),

Entrepreneur-

ship: An Integrating Typology and

Evaluation of the Empirical Re-

search in the Field,

Journal of

Management 1 3 , 259-279.

Yukl. G. A. (1981), Leadership in

Organizations.

New York: Prentice

Hall.

Zervos, C. (1952), Conversations with

Picasso, Paris: Cahiers

d Art,

trans-

lated hy Brewster Ghiselin, in

The

Creative Process,

Berkeley: Uni-

versity of California Press, 60.

C o p i e s o f a r t i c l e s f r o m t h i s

p u b l i c a t i o n a r e n o w a v a i la b l e f r o m

t h e U M I A r t i c l e C l e a r i n g h o u s e

For more information about the Clearinghouse, please fill

out and mail back the coupon below.

Yes [ would like to kniw more about tfMl Article

Clearinghouse. I am interested m ejfclronic oMerJng

through the follo^^'irg systemls); /

_ JfT Dialcom

yOCLC ILL Subsystem

„ DLALOCDialorder

_ OnTyme

Z Other (please specify).

Z

am interested in sendjrig my order by mail,

Z Please send me your current catalog and user

instructions for the iystem(sl checked above.

\

Name-

Title—

Institution/Company-

Department

\ Address-

ity

om i.

-S Ut e .

i p


18/18

Documents

Defining Entrepreneurship- Competing Perspectives