Who is an Entrepreneur?

Is a Question Worth Asking

James W.Carland

Frank Hoy Jo Ann C. Carland

Importance of Concept

• Support and foster entrepreneurship • Behaviour modification attempts – Increasing population of entrepreneurs – Increasing survival rate of small businesses – Build body of research • Increased focus on individuals.

• Full understanding eludes as it is a complex and dynamic process

Conceptual ambiguity

• Who is an entrepreneur?

• Essential characteristics of entrepreneur?

• Which firms can be called entrepreneurial ventures?

• Benefits of entrepreneurship?

Some explanations

• Schumpeter (1934) on Entrepreneur – Individuals who carry out new combinations of means of production • Gets equated with small business ownership; self employment • Essential characteristics of entrepreneur?

– Should ownership of enterprise be omitted?

– Risk bearing – Creation or exploitation of ideas – Demographics

Some explanations

• Which firms can be called entrepreneurial ventures?

– Small firms or large firms (as instigators) – Vesper (1980) • Introduction of new good; new methods of production; new market; new sources of supply; industrial reorganization.

• Is innovation the key word?

• Benefits of entrepreneurship?

Definitions (Carland et.al, 1984)

Entrepreneur Small Business owner •Establishes and manages a business for principal purpose of profit and growth •Characterized by innovative behaviour •Will employ strategic management practices in the business •Establishes and manages a business for principal purpose of furthering personal goals.

•Business primary source of income and consumes majority of one’s time and resources.

•Business perceived as extension of personality, family needs, desires.

Definitions (Carland et.al, 1984)

Entrepreneurial venture Small business venture •Engages in behaviour that is aimed at profitability and growth.

•Business characterized by innovative strategic practices •Independently owned and operated •Not dominant in its field.

•Doesn’t engage in any new marketing or innovative practices.

Evolution as an area

• Definition – Little convergence among researchers – Rare and inconsistent – Phenomenon occurs along continuum – Operationalization through intentionality – subjective interpretation – To know more about small ventures, need to know about their creators. Two are inextricably bound.

Evolution as an area

• Methodology – Heterogeneous samples – issue of comparability, control groups – Difference in approaches: trait school problems with sample identification.

Entrepreneur: Methodological Issues

• Data collection predominantly from small, independent enterprises – implications for corporate entrepreneurship.

• Results of study by Carland et.al

– Entrepreneurship distinct from small business ownership in terms of articulated venture strategies – Entrepreneurs exhibit different personality traits and behavioural preferences.

Debate: Focus of studies?

• Intentionality vs. creation (outcome).

– Scholars not able to conceptualize motives and cognitive processes. – Multiple perceptions exist • Person vs. process (organization creation) – Issue of corporate venturing • Whole vs. part – Success depend on factors prior to, during and after launching of new venture. Need to understand all parts and interaction between them.

Conclusion

• For field to evolve, conceptual and methodological issues need to be resolved.

• Trait and behaviour are inextricably linked. Probably case study methodology more suited, especially if objective is intervention.

• Institutional factors need to be incorporated.