ENTREPRENEURSHIP

Entrepreneurship

Entrepreneurship

Entrepreneurship involves identifying opportunities and exploiting them (Venkataraman and Sarasvathy, 2001), whereas strategic management involves creating and sustaining a competitive advantage (Hitt, Ireland, and Hoskisson, 2005; De Carolis, 2003). Both are concerned about growth, creating value for consumers, and subsequently creating wealth for owners (Amit and Zott, 2001; Ireland, Hitt, and Sirmon, 2003). While entrepreneurship focuses on new products, processes, and markets, strategic management emphasizes using them to gain an advantage over competitors (Barney, 1991; Lumpkin and Dess, 1996; Sharma and Chrisman, 1999). With their different yet complementary foci, both entrepreneurship and strategic management are integral to firm success.

Entrepreneurship is the process whereby newness is created in the market and society at large through creating new organizations or through transforming existing organizations, which in turn is called intrapreneurship or corporate entrepreneurship. Entrepreneurship allows organization studies to focus on organizational emergence and organizational innovation and to understand the “event” of organization, which is how organizational processes are created and changed or are continuously in the making. Entrepreneurship is also important for organization studies as it allows assessment of the impact of organizations on people's everyday lives in both a critical and generative sense as illustrated by the phenomena of “enterprising selves” and “entrepreneurial history making.”

Venkataraman and Sarasvathy (2001) suggest strategic management and entrepreneurship should be integrated. They use the metaphor of Romeo and Juliet. They suggest that entrepreneurship alone is like having Romeo with no balcony. Strategic management alone is similar to having the balcony but no Romeo. Both are needed to create firm success over the long term. Therefore, the integration of entrepreneurship and strategic management is referred to as strategic entrepreneurship. Strategic entrepreneurship involves identifying and exploiting opportunities while simultaneously creating and sustaining a competitive advantage (Ireland, Hitt, and Sirmon, 2003). Strategic entrepreneurship is important for both small and new firms and for large established firms as well. Established firms must be entrepreneurial, while entrepreneurial firms must also be strategic (Hitt et al., 2001, 2002; Ireland et al., 2001).

Strategic entrepreneurship has several dimensions to include developing an entrepreneurial mindset and culture, managing resources strategically, applying creativity and developing innovation, and leveraging the innovation through strategy to create a competitive advantage and thereby creating value for the end consumer. When value is created for the end consumer and done so efficiently, it then creates wealth for owners (the entrepreneur) (Ireland et al., 2003; Sirmon, Hitt, and Ireland, 2003). An entrepreneurial mindset is both an individual and an organizational phenomenon. Individuals can be entrepreneurial, but so too can organizations. To do so, they must have a mindset that makes them alert to entrepreneurial opportunities as well as to the rent-generating potential created by uncertainty (McGrath and MacMillan, 2000) (see navigating uncertainty). An entrepreneurial mindset also involves the use of real options logic in which opportunities may be identified and acquired for future use (McGrath, 1999).

An entrepreneurial culture is one in which new ideas and creativity are expected, risk taking is encouraged, failure is tolerated, learning is promoted, innovations are championed, ...