Entrepreneurial opportunities (definition)
Those situations in which new goods, services, raw materials and organizing methods can be introduced and sold at greater than their cost of production. An entrepreneurial opportunity could stem from introducing an existing technological product used in one market to create a new market or it could be creating a new technological product for an existing market or creating a new product for a new market. 1. Because opportunities exist in high uncertainty, entrepreneurs must use their judgment about whether or not to act. 2. The individual’s prior knowledge can decrease the amount of uncertainty.
Entrepreneurial action (definition)
Action through the creation of new products/ processes and/or the entry into new markets, which may occur through a newly created organization or within an established organization
Entrepreneurial thinking (definition)
Individuals’ mental processes of overcoming ignorance to decide whether a signal represents an opportunity for someone and/or reducing doubt as to whether an opportunity for someone is also an opportunity for them specifically, and/or processing feedback from action steps taken
The McMullen-Shepherd model explains how knowledge and motivation influence two stages of entrepreneurial action. 1. Signals of changes in the environment that represent possible opportunities will be noticed by some individuals but not others. 2. Individuals with knowledge of markets and technology are more capable of detecting changes in the external environment, and if motivated will allocate further attention to processing this information. 3. The result of Stage 1 is an individual’s realization that an opportunity exists for someone. 4. The result of Stage 2 is the individual then needs to determine whether it represents an opportunity for him or her.
Entrepreneurs think differently than nonentrepreneurs.
Sometimes they have to make decisions in highly uncertain environments, with high stakes and immense time pressures. Given the nature of an entrepreneur’s decision-making environment, he or she needs to think structurally, engage in bricolage, effectuate, cognitively adapt and learn from failures.
Superficial similarities (definition)
Exist when the basic (relatively easy to observe) elements of the technology resemble (match) the basic (relatively easy to observe) elements of the market
Structural similarities (definition)
Exist when the underlying mechanisms of the technology resemble (or match) the underlying mechanisms of the market Forming opportunity beliefs often requires creative mental leaps, which are launched from one’s existing knowledge. 1. The creative mental leap could be from knowledge about a technology to a new market that could benefit from its introduction. 2. Making these connections between a new product and target market where it can be introduced is aided by the superficial similarities and structural similarities between the source and the destinations. 3. The entrepreneurial challenge often lies in making mental leaps based on structural similarities.
Entrepreneurs making do by applying combinations of the resources at hand to new problems and opportunities Entrepreneurs often lack resources, so they seek resources from others to provide the slack necessary to experiment and generate entrepreneurial opportunities or engage in bricolage. Bricolage refers to taking existing resources and experimenting, tinkering, repackaging, and/or reframing them so that they can be used in a way for which they were not originally designed or conceived.
Causal process (definition)
A process that starts with a desired outcome and focuses on the means to generate that outcome
Effectuation process (definition)
A process that starts with what one has (who they are, what they know, and whom they know) and...
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