G. Dale Meyer

A Lack of Insight: Do Venture Capitalists Really Understand Their Own Decision Process?

Analyzes how well venture capitalists (VCs) examine their own decision making processes. Four hypotheses are presented which suggest that VCs do not perform accurate self-examinations regarding their decision criteria, more information decreases their introspection accuracy, using optimal information factors increases the VCs introspection accuracy about decision processes, and VCs are consistent in applying their decision policies. Data were gathered using an experiment which captures the real-time decision making processes of fifty-one practicing VCs from the Colorado Front Range and the Silicon Valley in California. Findings indicate that VC understanding of their decision policies is not perfect, but the strong rank order correlation between the actual and stated decision policies suggests relatively good insight. Also supported are the hypotheses that more information greatly diminishes VC understanding of decision policies, VCs using optimal cues have better understanding of their decision policies, and that VCs are consistent in applying their decision policies even if they do not consciously understand the policy. (SFL)

An Entrepreneurial System View of New Venture Creation

This paper reports the results of a two‐phase study that explores new venture creation within the context of an entrepreneurial system. First, a genealogy of high‐technology companies is presented depicting a high spin‐off rate resulting from the presence of seven incubator organizations. Second, semantic structure analysis (Spradley 1980) based on semi‐structured interviews with founders is used to develop a taxonomy. This taxonomy depicts the relationship among components in one entrepreneurial system, Boulder County, Colorado, that encourages, supports, and enhances regional entrepreneurial activity. Findings indicate that incubator organizations, spin‐offs, informal and formal networks, the physical infrastructure, and the culture of the region are related uniquely and interact to form a system conducive for dense high‐technology entrepreneurial activity. Additionally, greater rates of new venture formation were found following critical moments in the life of incubator organizations.

Doctoral Education in the Field of Entrepreneurship

Current perceptions and practices in doctoral education in the field of entrepreneurship are explored. The paper developed from efforts of a Task Force formed by the Entrepreneurship Division of the Academy of Management in response to several important observations: growing demand for faculty in entrepreneurship, growing membership in the division, more participants in doctoral and junior faculty consortia, increasing attention to entrepreneurship education at all academic levels, and the implementation of more doctoral seminars and programs in the field. Using a process outlined in Summer et al. [J. Manage. 16 (1990) 361], the Task Force addressed the following questions: (1) What is the current state of doctoral education in entrepreneurship? (2) How should doctoral education in Entrepreneurship be designed? Recommendations are presented.

Organizational Communication: Development of Internal Strategic Competitive Advantage

Many organizations are experimenting with structures (new organization forms) that are designed to facilitate empowered cross-functional communication. The challenge is to become more efficient or competitive by reducing barriers to com munication and to eliminate boundaries which impede the understanding of end-to-end workflows and better performance on strategic goals. Horizontal organization processes such as cross-functional teamwork and empowered decision making at lower organization levels are based on more participative management styles (new management technologies). This paper builds a theo retical model and provides propositions showing how knowledge creation and communication are the foundations of the new organization forms. An organiza tions capability for creating and communicating knowledge is seen as a resource which can create global strategic competitive advantage. A longitudinal research program is proposed to study the progress of experiments by organiza tions utilizing the new organization forms and management technologies (NFMT).

Industry environments and new venture formations in U.S. manufacturing: A conceptual and empirical analysis of demand determinants

Abstract Through integration of theoretical perspectives from Austrian economics, industrial organization economics, and organizational theory, this study builds and examines empirically a model of the demand determinants of new venture formations in manufacturing industries. Austrian economics and other writings on market disequilibrium imply that the dynamics of industries create market opportunities that are available to economic actors. The greater the changes occurring in an industry, the greater the opportunities created, and the further the market is moved from an equilibrium state. Entrepreneurship is viewed as the process of seizing opportunities through combinations of productive inputs. The more available market opportunities in an industry, the greater is the potential for entrepreneurial activity and, more specifically, new venture formations. Entry barriers constrain the formation of new ventures by prohibiting new ventures from taking advantage of available emerging opportunities. The inertial properties of existing firms constrain their ability to move toward these opportunities and thereby increase the potential for new ventures to exploit these market opportunities. The empirical analysis utilizes the Small Business Administrations U.S. Establishment and Enterprise Microdata file to test the model on a large sample of U.S. manufacturing industries. Results indicate that dynamic industries have greater new venture formations. More specifically, new venture formations are associated with industry growth, the dynamism of industry niches, and technological development. Moreover, entry barriers were found to strongly constrain rates of new venture formations. Industry capital requirements, concentration, and excess capacity were all related negatively to the formation of new ventures. The hypothesized positive relationship between industry-level measures of organizational inertia and new venture formations was also borne out in the empirical analysis. New venture formations were related positively to the extent of vertical integration in an industry as well as to the failure of incumbent firms to invest in new capital. Overall, the independent variables explained more than 50% of the variance in rates of new venture formations in manufacturing industries. The results support an Austrian perspective on entrepreneurship and imply that demand factors and industry structural variables are important determinants of new venture creations. The results imply that dynamic industries should spawn new ventures, and industries with high sales growth, changing consumer preferences, and rapid technological change should exhibit high rates of venture formations. For potential entrepreneurs, the model presented herein might be a useful guide to focus their venture activities. Entrepreneurs who can spot the fundamental sources of market change can exploit their knowledge for economic gain. Yet, there are a number of difficulties in suggesting that the model presented herein could be directly applied by entrepreneurs. First, it is always easier to estimate the dynamics of an industry post hoc than it is ex ante. For example, whereas it is simple to catalogue the technological change that occurred in an industry over time, it is another matter to predict the nature of future technological developments. Second, entrepreneurial opportunity can persist only if other potential economic actors do not know of the presence of the opportunity or cannot act upon it. Any model that gains acceptance as a means of predicting the presence of opportunities would, through its widespread usage, neutralize those opportunities for economic profit. Nonetheless, entrepreneurs who have that unique capability to spot industry dynamics and associated profit opportunities where others do not will gain from that ability.

To agree or not to agree? consensus and performance in new ventures

It is an intuitively appealing notion that enhanced firm performance is associated with agreement by top managers on a fundamental set of strategic goals and on methods to accomplish those goals. Whereas previous studies have for the most part examined this relationship in larger companies competing in stable industries, the study reported here provides findings from newer entrepreneurial ventures in dynamic industries. Several important findings emerge from this study. First, managers’ assessment of better performance is not related to agreement on a primary set of strategic goals and means. Instead, perceived better performance is significantly and positively related to disagreement on secondary sets of strategic goals and means. Second, powerful individuals in top management teams have an important impact on the nature of the consensus-performance relationship. In new ventures the influence of the CEO’s perspective and behaviors in forging agreement cannot be overlooked. Third, these results are evident during the earlier life cycle stages of a venture’s development, and in dynamically changing competitive environments.

Temporal Dimensions of Opportunistic Change in Technology-Based Ventures

Opportunity recognition and opportunity-directed behavior are at the core of entrepreneurial efforts in both new and existing ventures. This study examines characteristics and behaviors related to future time orientation and their association with the pursuit of entrepreneurial opportunity. We find that strategic change in young technology-based ventures is associated with top management teams who are perceived as being more future-oriented. Communication patterns linking future- and present-oriented managers are also associated with strategic change. The findings of this empirical study indicate that technology-based ventures should place substantial emphasis on identifying, embracing, and widely communicating ideas that challenge the status quo. Out of this process the entrepreneurial approach is reinvigorated with new opportunities for proactive strategic change and growth. Ways in which new venture management may take steps to recognize and move proactively on emerging new opportunities are suggested.

An integrative descriptive model of ethical decision making

This paper presents an integrative, descriptive model of ethical decision making, with special attention given to issues of measurement. After building the model, hypotheses are developed from a portion of it. These hypotheses are tested in an exploratory analysis to determine if further research and testing of this model and the measurement instruments it employs are warranted.

Qualitative Research in Business Communication: A Review and Analysis:

Communication researchers, concerned with gathering complete, valid, and reproducible results, are being encouraged to use a group of qualitative research methods for studying business communication. The question that intuitively arises, then, is whether qualitative methods are increasingly utilized in pub lished business communication research. This paper addresses the call for qualitative research in business communication, describes qualitative research methods with examples of business communication articles in which qualitative and qualitative/quantitative methods were used effectively, and presents an analysis of research methods used in articles published in three business com munication journals during the last four years. The paper concludes with recommendations for business communication research.

The Reinvention of Academic Entrepreneurship

What a delight it is to have this “essay” invited to appear in this edition of the Journal of Small Business Management (JSBM). Most of the research papers included in this issue were written by several of the courageous pioneers of the once incipient academic field of entrepreneurship. In addition, my very favorite former doctoral student and her coauthor created a cutting‐edge paper on entrepreneurial education that is not only superlative but also a “must read” for dedicated professor/teachers. Dr. George Solomon, editor of JSBM, has my sincere appreciation for creating and organizing this special issue.