Diversifying into technical clothing manufacture as entrepreneurial learning:a situated learning theory perspective

Purpose - The purpose of this paper is to demonstrate analytically how entrepreneurial action as learning relating to diversifying into technical clothing - i.e. a high-value manufacturing sector - can take place. This is particularly relevant to recent discussion and debate in academic and policy-making circles concerning the survival of the clothing manufacture industry in developed industrialised countries. Design/methodology/approach - Using situated learning theory (SLT) as the major analytical lens, this case study examines an episode of entrepreneurial action relating to diversification into a high-value manufacturing sector. It is considered on instrumentality grounds, revealing wider tendencies in the management of knowledge and capabilities requisite for effective entrepreneurial action of this kind. Findings - Boundary events, brokers, boundary objects, membership structures and inclusive participation that addresses power asymmetries are found to be crucial organisational design elements, enabling the development of inter- and intracommunal capacities. These together constitute a dynamic learning capability, which underpins entrepreneurial action, such as diversification into high-value manufacturing sectors. Originality/value - Through a refinement of SLT in the context of entrepreneurial action, the paper contributes to an advancement of a substantive theory of managing technological knowledge and capabilities for effective diversification into high-value manufacturing sectors. Copyright © 2014 Emerald Group Publishing Limited. All rights reserved.

The franchise dilemma:entrepreneurial characteristics, relational contracting, and opportunism in hybrid governance

Using franchise data, we identify that entrepreneurial characteristics of franchisees partially impact on their opportunistic tendencies. Further, relational contracting increases franchisee opportunism by strengthening the opportunism-enhancing impact of entrepreneurial characteristics. These findings point to a key dilemma franchisors need to be aware of: Entrepreneurially minded franchisees who might be better at exploiting market opportunities for their units may also behave more opportunistically, if given the chance through a more relational contracting regime. At the same time, if they perceive the contractual framework as being too rigid, they may be less able to leverage their capabilities, become dissatisfied, and exit the system.

What's so entrepreneurial about intrapreneurs?

This paper discusses the determinants of becoming an intrapreneur. Individuals maximise their utility while deciding among three occupations: independent entrepreneurship, paid employment and intrapreneurship. I show that intrapreneurs resemble employees rather than entrepreneurs. Specifically, comparing the decision-making of intrapreneurs to that of entrepreneurs, the former are significantly more risk averse, expect lower but less uncertain reward and are broadly endowed with a poorer set of entrepreneurial abilities; despite having higher levels of human capital they fail to recognise business opportunities and have lower confidence in their entrepreneurial skills. A distinction within the category of intrapreneurship, based on the level of engagement and therefore the level of personal risks they bear, adds to our understanding of intrapreneurship. Engaged intrapreneurs, i. e., intrapreneurs that expect to acquire an ownership stake in the business, unlike the rest of intrapreneurs, share the attributes usually assumed to characterise entrepreneurs. © 2011 Springer Science+Business Media, LLC.

More than money:developing an integrative multi-factorial measure of entrepreneurial success

This article conceptualises and operationalizes ‘subjective entrepreneurial success’ in a manner which reflects the criteria employed by entrepreneurs, rather than those imposed by researchers. Using two studies, a first qualitative enquiry investigated success definitions using interviews with 185 German entrepreneurs; five factors emerged from their reports: firm performance, workplace relationships, personal fulfilment, community impact, and personal financial rewards. The second study developed a questionnaire, the Subjective Entrepreneurial Success–Importance Scale (SES-IS), to measure these five factors using a sample of 184 entrepreneurs. We provide evidence for the validity of the SES-IS, including establishing systematic relationships of SES-IS with objective indicators of firm success, annual income and entrepreneur satisfaction with life and financial situation. We also provide evidence for the cross-cultural invariance of SES-IS using a sample of Polish entrepreneurs. The quintessence of our studies being that subjective entrepreneurial success is a multi-factorial construct, i.e. entrepreneurs value various indicators of success with money as only one possible option.

Subsidies, rent seeking and performance:being young, small or private in China

Entrepreneurs in emerging market economies operate in weak institutional contexts, which can imply different types of government. In some countries (e.g., Russia), the government is predatory, and the main risk faced by (successful) entrepreneurs relates to expropriation. In other countries (like China) this kind of risk is lower; nevertheless the government is intrusive, and the rules of the game remain fluid. The implication of the latter for entrepreneurs is that they are more likely to spend time and resources on influence (rent seeking) activities rather than on productive activities.We illustrate this type of government by focusing on the distribution of subsidies in China.We present a simple formalmodel that explores not only the direct effects of rent seeking for a company but also externalities under a situation of policy-generated uncertainty in the distribution of subsidies.We explore how these effects differ for the entrepreneurial sector (young, private and small companies) compared with other sectors. We posit that while the performance of private companies is more affected than the performance of state firms, the impact of government-induced uncertainty on young and small companies is actually less pronounced. Our empirical analysis, based on a unique large dataset of 2.4 million observations on Chinese companies, takes advantage of the regional and sectoral heterogeneity of China for empirical tests.

Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics

Why are some entrepreneurs able to start a new firm more quickly than others in the venture creation process? Drawing on pecking order and agency theory, this study investigates how start-up capital structure influences the time to either new firm founding or quitting the start-up process. The temporal aspect of the start-up process is one that is often discussed, but rarely studied. Therefore, we utilize competing risk and Cox regression event history analysis on a nationally representative sample of US entrepreneurs to investigate how start-up capital structure impacts the time in gestation to particular kinds of start-up outcomes. Our findings suggest that external equity has an appreciable impact on new firm emergence over time, and that the percentage of ownership held by the founders attenuates the benefits of external equity.

Shadow economy and entrepreneurial entry

The impact of the shadow economy on entrepreneurial entry across countries is analyzed utilising 1998-2005 individual-level Global Entrepreneurship Monitor data and national macro-economic variables. A simple correlation coefficient suggests a positive relationship between the size of the shadow economy and the likelihood of entrepreneurial entry. However, this masks more complex relationships, if, as argued, the shadow economy is an embedded social phenomenon. With appropriate controls and instrumenting for potential endogeneity, the impact of the shadow economy on entry in a linear specification is found to be negative. Further, there is evidence of a U-shaped relationship: entrepreneurial entry is least likely when the shadow economy amounts to about a quarter of gross domestic product (GDP). At the individual level, an extensive shadow economy has a more negative impact on respondents who are risk averse. In addition, in the economies where property rights are stronger, the negative impact of the shadow economy is weaker. © 2012 Blackwell Publishing Ltd.

Human capital in social and commercial entrepreneurship

We advance research on human capital and entrepreneurial entry and posit that, in order to generate value, social entrepreneurship requires different configurations of human capital than commercial entrepreneurship. We develop a multilevel framework to analyse the commonalities and differences between social and commercial entrepreneurship, including the impact of general and specific human capital, of national context and its moderating effect on the human capital-entrepreneurship relationship. We find that specific entrepreneurial human capital is relatively more important in commercial entrepreneurship, and general human capital in social entrepreneurship, and that the effects of human capital depend on the rule of law.

Who you are and what you do:the role of entrepreneurial human capital in the demand and supply of external finance of high-tech start-ups

The existence of adequate financial capital at start-up as well as during the lifetime of a firm is considered to be vital not only for its survival but also for its effective trading and growth, as it can act as a buffer against unforeseen difficulties (Cooper, Gimeno-Gascon, & Woo, 1994; Chandler & Hanks, 1998; Venkataraman & Van de Ven, 1998; Cassar, 2004). Inadequate or inappropriate capital structure is often the most common reason for a large proportion of small business failures (Chaganti, DeCarolis, & Deeds, 1995).

Organizing entrepreneurial judgment:a new approach to the firm

Book review: Organizing Entrepreneurial Judgment: A New Approach to the Firm. By Nicolai J. Foss and Peter G. Klein. Cambridge University Press, Cambridge. 2012. xxii + 299 pp. Pbk $36.99.

Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations

We apply prospect theory to explain how personal and corporate bankruptcy laws affect risk perceptions of entrepreneurs at time of entry and therefore their growth ambitions. Previous theories have reached ambiguous conclusions as to whether countries with more debtor-friendly bankruptcy laws (i.e. laws that are more forgiving towards debtors in bankruptcy proceedings) are likely to have more entrepreneurs, or whether, creditorfriendly regimes have positive effects on new ventures via enhanced incentives for the supply of credit to entrepreneurs. Responding to this ambiguity, we apply prospect theory to propose that entrepreneurs do not attach the same significance to different elements of bankruptcy codes—and to explain which aspects of debtor-friendly bankruptcy laws matter more to entrepreneurs. Based on this, we derive and confirm hypotheses about the impact of aspects of bankruptcy codes on entrepreneurial activity using the Global Entrepreneurship Monitor combined with data on both personal and corporate bankruptcyregulations for 15 developed OECD countries. We use multilevel random coefficient logistic regressions to take account of the hierarchical nature of the data (country and individual levels). Because entrepreneurs and creditors are sensitive to different elements of the codes, there is scope for optimisation of the legal design of bankruptcy law to achieve both an adequate supply of credit and to encourage high-ambition entrepreneurship.