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Samenvatting Entrepreneurship in Theory and Practice - Paradoxes in Play, Third Edition - Global entrepreneurship and business ()
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Global Entrepreneurship & Business Pre Master Business Administration - boek 3e editie - 2024
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Entrepreneurship in theory and practice third edition : global entrepreneurship and business
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GEB – samenvattingChapter 1: what is entrepreneurship?
Entrepreneurship is much more than just starting an independent organization. It’s a complex
phenomenon that occurs in many different contexts, and varies in terms of its scope, process and
output. There is not one answer to what entrepreneurship is.
Elevator pitch: short sales pitch or oral monologue where a given theme is introduced in the
timespan of an elevator ride. Entrepreneurship has great value for the individual, existing
organizations and society. Not just the prospects of making money drives entrepreneurs, but also the
desire for independence and the need for achievement. Making money however, cannot be ignored,
because in order to implement the entrepreneurial processes entrepreneurs are required to establish
an organization that is commercially viable, so they must at least make enough to cover expenses. In
a way we are entrepreneurs of our own education and careers, and maybe even of ourselves. As an
entrepreneur you’re helping to create something new, this is a challenging and educational
experience especially in the pioneering phase that brings new things into being.
The value entrepreneurs bring to organizations is to differentiate and innovate in an
essentially globalized world with more competition from everything everywhere an has no speed
limits. The differentiation and renewal that is required of organizations require them to be able to
create or discover opportunities and pursue them, this is the core of entrepreneurship. Therefore
more organizations actually look for these abilities in their employees.
For society entrepreneurs generate jobs, economic growth and prosperity. It is also
acknowledged to help develop a healthy competition in the economy as it pushes new ideas,
products and services into the market.
Entrepreneurship in short:
1. A desire for independence
2. A need to survive in a world that requires differentiation and renewal -> organizations should
create or discover opportunities and pursue them
3. Generating jobs, economic growth and prosperity
4. Developing healthy competition in the economy
Historical phases of entrepreneurship:
1. The economic tradition:
welfare, including the conquest of countries was regarded a form of entrepreneurship
because this was considered a natural part of efforts to discover and exploit new
opportunities.
a. Cantillon (1680-1734) -> the entrepreneurs function was to compensate for
discrepancies between supply and demand by buying something cheaply and selling
it again at as high price as possible. The entrepreneur is someone who obtains and
distributes resources at risks, thereby bringing economy towards equilibrium
b. End 1700 -> entrepreneur is a person who plans, supervises, organizes or owns
factors or production
c. 1800s -> distinction between those who supply funds and those who create profit
d. 1900s Knight -> entrepreneur carries uncertainty of the economy on his shoulders ->
three types of uncertainty ->
i. Different outcomes in the future exist and are known -> calculate
probabilities and make decision based on them
, ii. The future outcome exists but is not now known in advance, here a picture
can be formed to predict the outcome
iii. The true uncertainty -> the future outcome does not exist and it is therefore
not possible to know anything about it, no picture can be formed of a
probable outcome.
e. entrepreneurship bears no uncertainty about the economy, it is an innovator who
generates new opportunities and organizations in the economy and is the main
source of development in the economy. The starting point is an economy in
equilibrium until an entrepreneur generates new opportunities by combining existing
things, thereby creating market imbalance
Creative destruction -> new projects/organizations are constantly being formed and others are
shutting down, because new organisations will outperform the existing and create waves of change in
the economy. As the market becomes saturated a new equilibrium emerges.
2. The social-psychological tradition (1960-1980s):
entrepreneurship is often defined from a perspective of psychological mentality. The need to
achieve is identified as the key to why some are more societies do better. This need is linked
to the entrepreneurial personality, so
a. psychological explanations are gaining ground in entrepreneurship, specifically
differences between entrepreneurs and non-entrepreneurs. This faded after 1980s
due to it ignoring that personal traits influence each other and environmental factors
playing a role. It also was criticized because it made the entrepreneur an
‘everyman’& does not make it possible to empirically identify entrepreneurs
personality in a crowd.
b. Sociology has taken over -> more focus on the relationships between people than
focusing on just an individual
3. Emergence tradition (1980s):
Entrepreneurship is an organizing process that leads to particular output -> the formation of
a new organization. Distinction between entrepreneurs and non-entrepreneurs:
entrepreneurs form new organizations. Entrepreneurship = organizational formation,
synonymous with new venture creation and building of new structures because organizations
are characterized by policies and administrative structures and goals. Important distinction:
a. Conventional organization theory -> the starting point begins at the place where the
emerging organization ends -> focus on the process of building a new organization
b. Organization/entrepreneurship theory -> is mainly interested in what happens once
an organization has been created and developed
4. The opportunity tradition:
Entrepreneurship is defined as discovery, evaluation and exploitation of opportunities to
introduce new goods and services, ways of organizing, markets, processes and raw materials.
Renewal and opportunity emergence are the core of entrepreneurial process and opening up
activities that may result in a new organization as output.
a. Entrepreneurship is something innovative, bringing opportunities that add something
new to the world like new goals, products or means-end chains.
b. Opportunities -> situations in which new goods, services, raw materials, markets and
organizing methods can be introduced through the formation of new means, ends or
mean-ends relationship
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