Vesa Puhakka

Effects of Opportunity Discovery Strategies of Entrepreneurs on Performance of New Ventures

Opportunity discovery process is one of the main topics of interest in entrepreneurship research. However, the effects of opportunity discovery strategies of entrepreneurs on performance of new ventures have been neglected. The reason for this appears to be the claim that opportunity discovery as behaviour of entrepreneurs takes place before the venture is established and, thus, should not be connected to the later phases of the entrepreneurial process. This is not an established consideration as it inherently holds the idea that research should study how entrepreneurs create value which should not be connected to the value they have created. The present study examined how opportunity discovery strategies of entrepreneurs affect performance of the ventures established. The results illustrate that the performance of new ventures is strongly influenced by opportunity discovery strategies used by entrepreneurs. More specifically, growth of new ventures showed significant increase by proactive opportunity discovery strategy. In addition, the opportunity discovery strategies of proactive searching, competitive scanning and collective action increased the newness value of the ventures. These results suggest that the strategies entrepreneurs use to discover opportunities have much impact on creating high performance levels of new ventures.

EFFECTS OF SOCIAL CAPITAL ON THE OPPORTUNITY RECOGNITION PROCESS

The study hypothesizes that social capital of entrepreneurs enhances their opportunity recognition process. The study investigated metal- and ICT-ventures established in 1998 in three different regions of Finland. The results showed that entrepreneurs when recognizing opportunities have (1) active social interaction to acquire knowledge, to forecast future trends, and to evaluate information and decisions, (2) personal contacts to acquire knowledge and to analyze markets, and (3) cognitively committed relationships to evaluate and understand the information and to enact proactively future trends.

The Development of a High-Tech International New Venture as a Process of Acting: A Study of the Lifespan of a Venture in Software Business

Purpose – The purpose of this research is to analyze the development of high-tech international new ventures as an acting process by individuals in relationship networks. Design/methodology/approach – The study cross-fertilizes research on internationalization of international new ventures, opportunity development of entrepreneurs and innovation development in technology-based firms. A longitudinal case study on the development process of an international new venture operating in the software business is used as a base for analytical generalization and theory development. Findings – The study illustrates events at three intertwined levels of acting on the development of an international new venture. It defines internal problem solving, external solution creation, opportunity selling and opportunity organizing as the behaviors driving the emergent, multi-level process and embedding the venture in various networks. Research limitations/implications – Statistical generalization based on common patterns experienced by several firms was not sought in this study. Using the process research approach with event-based analysis, the study, however, provides an in-depth analysis of international new venture development through the actions of individuals at the level of key events. The methods for examining a complex development process over time can be utilized by other process researchers. Practical implications – The complexity of building high-tech international new ventures is, to a great extent, due to the necessity of handling the process at three levels simultaneously and in connection with one another. Since international new ventures are often based on business opportunities that have a short window of opportunity, the timeline creates further challenges. Embedding the business into various resourcing, legitimizing and otherwise assisting networks is crucial. Originality/value – The study provides an insight into the ways of acting in networks that intertwines the internationalization, opportunity and technology development with development of a high-tech international new venture. The study follows the development process in real time, something that is quite rare in previous international entrepreneurship research.

Role of networks in emergence of international new ventures

The present paper combines network approach-based internationalisation research and entrepreneurial opportunity discovery research to examine the entrepreneurial networking for emergence of international new ventures. Specifically, we aim to find out how entrepreneurs use relationships to create a basis for emergence of an international new venture. In the empirical part, we conduct a single case study on the process of emergence of a venture that operates in software business serving the so-called continental system developers. The primary empirical data consists of interviews of the entrepreneur and interviews of the persons in the networks on which the emergence of the international new venture was to a great extent based. As a result, we present a process model of international new venture emergence. It illustrates the acts of opportunity creation that are embedded in entrepreneurial networks. The networking acts are taken to a great extent before firm establishment and centre on overcoming the dual hurdle created by the lack of capability and lack of legitimacy.

Effectuation and Causation in Entrepreneurship Education

Entrepreneurship refers to development and enactment of entrepreneurial opportunities at the intersection of venture creation and market creation. The present study approaches entrepreneurship education as effectuation of possible futures and causation of relevant knowledge in the creation of entrepreneurial opportunities. Through emphasis on the role of effectuation, a creative process view of entrepreneurship education is advocated. It builds on the cognitive and social-psychological schools of entrepreneurship and cognitive, contextual and creation views on entrepreneurial opportunities. As a result, we suggest a model in which effectuation could be used systematically together with causation in entrepreneurship education. Effectuation in entrepreneurship education is proposed to open a new pedagogic view and context to increase student awareness of their ability to create societal impact rather than to accomplish the effective establishment of a company.

Entrepreneurial Creativity as Discovery and Exploitation of Business Opportunities

Our perception of the creative formation of organizations through entrepreneurship has changed dramatically during the past ten years (e.g., Carlsson and Eliasson 1993: Davidsson 2003). For a long time, entrepreneurship was construed in terms of managing a small business or being the owner-manager thereof. However, entrepreneurship is not directly associated with this particular context; it is essentially context-free organizational creativity (Gartner et al. 2003; Hjorth 2003, 2004; Sarasvathy 2001; Steyaert and Hjorth 2003). It is equally likely to be present in large corporations’ renewal efforts and in the identification of new markets and technologies as in the development projects of public organizations or, for that matter, in the reorganization of universities (cf. institutional or social entrepreneurship). At the core of entrepreneurship lies the creation and exploitation of entrepreneurial opportunities regardless of the context (Shane 2003). Entrepreneurship is a creative activity taking place when neither the goal nor often the initial conditions are known at the start, but constructed during the process (Sarasvathy 2001). This happens, because there is no single right or best solution, and even the starting situation may be so complex and constantly changing that it is difficult to analyze it reliably in the extent necessary. Bearing in mind the discussion above, this paper uses the term entrepreneur to refer to an individual or a community of individuals (organization) that creates new business in its operational environment (cf. Hjorth 2003).

A Start-Up Ecosystem as a Structure and Context for High Growth

Abstract Entrepreneurial activity is currently a primary concern of many developed economies that struggle with changes in their industrial structures. Many of the traditionally strong industries are encountering strong global competition and declining markets, and national competitiveness is often said to be built on new entrepreneurial firms that are able to grow in global markets. The facilitating national systems for these firms are covered in the emerging start-up ecosystem discussion. This chapter aims to contribute to this discussion by incorporating an analysis of the variety of actors and activities needed in start-up industries that rely on competence bloc theory. Furthermore, inspired by cultural-historical activity theory, the study specifies the contextual-, temporal- and renewal-related determinants of the activity of start-up ecosystems. As a result, a framework for examining start-up ecosystems as platforms for high-growth entrepreneurship is proposed in terms of its core constituencies that influence the emergence and non-emergence of high-growth firms.

Opportunity Discovery and Creation in Cloud Computing

Cloud computing provides opportunities for firms selling or using cloud services. However, little is known about how entrepreneurs discover or create these opportunities for cloud computing. In this study, we found that the opportunities discovered in cloud computing were related to the development of software for a particular need. By contrast, created opportunities were developed under conditions of technological uncertainty, at a time when the market did not yet exist. It appears that created opportunities, if successful, bring long-term competitive advantages, whereas discovered opportunities are more easily copied and exploited by competitors.

Organizing MNC Internal Networks to Manage Global Customers: Strategies of Political Compromising

The present study approaches multinational corporations as internal networks that are constantly newly organized on the basis of relationships, operations, activities and tasks at hand. It combines MNCs-as-networks view with the research on supplier-customer relationship development to conceptualize the relational dynamics in the MNCs. The dynamics are seen created as the interplay of organizing within internal networks and managing of the global customer relationships. Through an empirical study on a project business MNC and analysis of the events in its global customer relationship the study defines strategies of political compromising in MNC internal networks.

Creating Entrepreneurial Opportunities: An Organisational and Social Constructive Phenomenon in the Creation of New Businesses

This conceptual study approaches the creation process of new businesses from the perspective of organisational creativity and imagination in entrepreneurial opportunity process. Currently, organisational creativity and imagination have been linked to the creative view or creation theory in the entrepreneurial opportunity process field of research. We argue that our theoretical illustration concerning the dialectical creation process of entrepreneurial opportunities describes an early phase of the creation of new businesses. According to our theoretical illustration, entrepreneurs create new unknown effects from the given means or tools (the logic of effectuation) in the creative space (called in-between). In this manner, the creative space including subject, object and community (i.e., neutral opportunities) is empty at the beginning of the entrepreneurial opportunity process, and it is completed by elements of business environment (i.e., intension-driven entrepreneurial opportunities) such as rules, tools, signs and division of labour.