Richard L. Priem

Venture Creation and the Enterprising Individual: A Review and Synthesis

Venture creation is at the heart of entrepreneurship. Enterprising individuals or groups start new ventures and, thus, we must understand the role of individuals if we are to understand venture creation. In this article, we review and critique the venture creation literature that has examined the role of the individual, with an eye toward identifying under-researched topics and improving research designs. We then highlight individual judgment as a particularly important future direction for research on the role of enterprising individuals in venture creation. We also discuss techniques for accessing entrepreneurs and for evaluating entrepreneurial judgments.

Rationality in Strategic Decision Processes, Environmental Dynamism and Firm Performance

This study tests competing theories of how the relationship between rationality in strategic decision processes and firm performance may be moderated by environmental dynamism. Results, based on a survey of 101 manufacturing firms, indicate a positive rationality-performance relationship for firms facing dynamic environments, but no relationship between rationality and performance for firms facing stable environments. Implications for future research are discussed.

The Antecedents and Consequences of Top Management Fraud

Fraud by top management is a topic that has stirred public interest, concern, and controversy. In this article, the authors analyze fraud by senior executives in terms of its nature, scope, antecedents, and consequences. They draw on the fields of psychology, sociology, economics, and criminology to identify societal-, industry, and firm-level antecedents of management fraud and the individual differences that enhance or neutralize the likelihood and degree of such fraud. The authors also review the consequences of management fraud on various stakeholder groups such as shareholders, debtholders, managers, local communities, and society.

Insights and New Directions from Demand-Side Approaches to Technology Innovation, Entrepreneurship, and Strategic Management Research

The authors review the progress of three rapidly growing macro management literatures—in technology innovation, entrepreneurship, and strategic management—that have in common the use of a “demand-side” research perspective. Demand-side research looks downstream from the focal firm, toward product markets and consumers, to explain and predict those managerial decisions that increase value creation within a value system. Typical characteristics of demand-side, macro-level management research include clearly distinguishing value creation from value capture, emphasizing product markets as key sources of value-creation strategies for firms, viewing consumer preferences as dynamic and sometimes latent, and recognizing that managers’ differing decisions in response to consumer heterogeneity contribute to firm heterogeneity and, ultimately, value creation. The authors review recent demand-side findings showing that strategies based on consumer heterogeneity can result in competitive advantage even if the firm holds only obsolete or mundane resources, these advantages can be sustainable without resource- or ability-based barriers to imitation, successful innovations can be consumer driven rather than resource or technology driven, and consumer knowledge can play a key role in entrepreneurial idea discovery. These seemingly counterintuitive findings from demand-side research indicate the promise of future demand-side work for generating new knowledge useful to scholars and managers. The authors suggest directions for future demand-side research based on their review. What’s more, the research they review represents a start—but only a start—toward integrated theories that could attend to both the demand side and the producer side of the value creation equation.

Process and Outcome Expectations for the Dialectical Inquiry, Devil's Advocacy, and Consensus Techniques of Strategic Decision Making:

This study examined expectations of cognitive conflict, social conflict, decision confidence, and postdecision group affect in the dialectical inquiry, devils advocacy, and consensus decision-making techniques. Expectations show some congruence with the affective, but not objective, outcomes found in prior empirical studies. Expectations were found to discriminate among dialectical inquiry, devils advocacy, and consensus.

Structured Conflict and Consensus Outcomes in Group Decision Making

Pressures for early consensus during group decision processes often lead to poor choices. However, consensus as an outcome of group decision processes is often desirable for implementing choices. We propose and test hypotheses that structured decision making techniques designed to enhance the expression of cognitive conflict will, paradoxically, (1) strengthen group consensus about and individual acceptance of the group S eventual choices, and (2) increase member satisfaction with the group. Faced with a realistic managerial scenario, nineteen groups in this study deliberated using the structured, conflict-enhancing dialectical inquiry (DI) approach; nineteen used the consensus (C) approach. Group consensus on the decision, individual acceptance of the decision, and member satisfaction with the group were higher in the DI than in the C conditions. We discuss implications for group decision aids and for future laboratory and field studies of group consensus on a course of action.

A CEO-Adviser Model of Strategic Decision Making

Upper echelons research has emphasized decision making either by individual CEOs or by teams of top managers. The authors introduce the CEO-Adviser model as an intermediate model of strategic decision making. The CEO-Adviser model leads to new propositions that have not been explored through the individual CEO or top management team models concerning how context affects the use of formal versus informal advisory systems and how advisers are selected.

Executives’ Perceptions of Uncertainty Sources: A Numerical Taxonomy and Underlying Dimensions

Managing directors and executive vice presidents in Hong Kong were asked to identify all sources of uncertainty facing their firms. They later made similarity judgments by grouping similar uncertainty sources. We employed multidimensional scaling (MDS) to determine the underlying dimensions used by the executives when distinguishing among uncertainty sources. Cluster analysis then produced a taxonomy of uncertainty sources. This classification, based directly on executive perceptions, encompasses uncertainties that are both external and internal to the firm. We discuss the implications of our results.

Explaining franchisors’ choices of organization forms within franchise systems

When franchisors pursue different priorities, different agency problems become relevant, which drive the franchisors’ choices among various franchising organization forms. We use archival and key informant data from a multi-industry sample of 94 franchisors to examine franchisors’ choices of organization forms based on their goals for growth, uniformity and local responsiveness. Our results indicate that franchisors emphasizing high growth are more likely to use multi-unit rather than single-unit franchising and, within the multi-unit franchising form, they are more likely to use area development franchising than incremental franchising. Franchisors emphasizing uniformity instead of growth are more likely to use area development franchising, but those emphasizing local responsiveness are more likely to use incremental franchising. We discuss the implications of these results for franchising research and practice.

Industrialization and Values Evolution: The Case of Hong Kong and Guangzhou, China

This field study evaluated the convergence, divergence, crossvergence, and multi-crossvergence perspectives of value system evolution in industrializing regions. Value differences were identified among graduating business university students in the Peoples Republic of China, Hong Kong, and the United States. Specific value dimensions in this study reflected the primary influence of either industrialization or regional culture. Thus, our overall results suggest that both industrialization and culture influence the combination of values held in Hong Kong. This finding could be interpreted as supporting the crossvergence perspective of value system evolution. A more precise interpretation, however, is that some value dimensions converge with increasing industrialization, while others remain divergent.