orgtheory.net

what is entrepreneurship anyway?

I’m in Gainesville, Florida attending a retreat for law and entrepreneurship scholars.* I am not an entrepreneurship scholar myself, but my work, which is related to collective action processes underlying radical organizational and legislative change, is of interest to entrepreneurship scholars. This is the second entrepreneurship workshop I’ve attended. I was struck that at both workshops the participants spent a lot of time discussing the question, what is entrepreneurship? What makes entrepreneurship a distinct concept? Just as was the case at the last workshop I attended, there is very little consensus about the definition. Not only was there no consensus, but there are stark differences in their definitions.

Why is entrepreneurship so hard to define?**  The discussions about this concept seem to be more than just your typical academic fretting over definitional issues; entrepreneurship seems genuinely difficult to nail down as a thing. One reason for this may be that entrepreneurship, as an area of study, brings together people who are actually interested in completely different, but related, phenomena. Entrepreneurship underlies new business start-ups, small businesses and self-employment, founding and failure rates, innovation and creativity, and new market emergence. People who are interested in any one of these topics find their way to the realm of entrepreneurship scholarship. (Someone who gets invited to enough of these conferences may start wondering if he actually is an entrepreneurship scholar.) But what motivates their interest in the topic is very different. And because there is no overarching theoretical framework, it’s easy to get lost in what is going on here.

I think the reason that entrepreneurship is such a slippery concept is because most scholars who study it are really interested in the manifestations of entrepreneurship and less in the thing that makes entrepreneurs really distinct –  identity. Some people self-identify as entrepreneurs, which motivates them to be innovative, found new businesses, or do other things that bring about change. However, the outcomes of being an entrepreneur vary quite a bit and so if you merely study the outcomes, you’re really just studying the manifestation of entrepreneurship (and not all of the people involved in the outcomes even see themselves as entrepreneurs).

That said, does it really matter how we define a field of research as long as we can agree on operationalization issues? As long as we can agree that the new venture start-up rate is a good measure of something related to entrepreneurship, then it shouldn’t matter at all what entrepreneurship is really about.

*If you’re interested, here are the slides to my presentation.

**Of course, entrepreneurship scholars have nowhere near the definitional problems that institutional scholars have, which is why the term “institutional entrepreneurship” is perhaps the most imprecise concept we have in organizational theory.

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Written by brayden king

February 18, 2011 at 3:31 pm

16 Responses

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  1. “…entrepreneurship, as an area of study, brings together people who are actually interested in completely different, but related, phenomena. Entrepreneurship underlies new business start-ups, small businesses and self-employment, founding and failure rates, innovation and creativity, and new market emergence.”

    That defines some of the kinds of entrepreurs. After all, you cannot have a study of a “thing” without “the thing itself.” They all share attributes that have been identified and studied – independence, of course, dedication both as a daily regimen and adherence to a long-term goal; but also flexibility and adapativity. That these exist and are expressed across ranges is a result of the very individuality of what is (paradoxically) a “sui generis type.”

    Any definition would have to explain both Edison and Tesla as well as Roy Lichtenstein, and Wally Amos and Debbi Fields, and, of course, all the Silicon Valley “Fairchildren.” Within that last, how would the taxonomy define Steve Wozniak?

    Whatever else they have (even laziness can be a virtue to an inventor), they self-identify as individuals. You may need one category for each case.

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    Michael E. Marotta

    February 18, 2011 at 4:09 pm

  2. I am convinced that identity matters for collective entrepreneurship. (See Martin Ruef’s new book as an example: http://www.amazon.com/Entrepreneurial-Group-Identities-Collective-ebook/dp/B0040ZN3R8/ref=sr_1_cc_2?ie=UTF8&qid=1298055041&sr=1-2-catcorr

    I think individual identity doesn’t get us very far, as the vast majority of entrepreneurs (defined by self-employment, business founding) didn’t identify themselves as being different from corporate peers before they started their businesses. Certainly 30 years of bad science on “why entrepreneurs are different” hasn’t taken us very far on understanding These “things themselves”.

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    Randy

    February 18, 2011 at 6:55 pm

  3. Agree with Randy. In part due to the point about how identity-entrepreneurship hasn’t taken us very far, at all. “and less in the thing that makes entrepreneurs really distinct – identity”. Some have a distinct identity, some don’t. Furthermore, entrepreneurship isn’t just about identity and outcome – you can also study the processes, networks and many other features of entrepreneurial behavior/actions/business etc.

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    Carsten Bergenholtz

    February 19, 2011 at 10:24 am

  4. I think the definition of the object of a field of research is essential to theory formation, so it doesn’t surprise me that “there is no overarching theoretical framework” for this topic. This may well be another case where Pfeffer’s call for stronger paradigms may have helped theorizing while hindering pluralism. Like you say, the open definition brings more people together, though at the risk of not being quite sure what they’ve come together to talk about.

    We easily imagine a definition of entrepreneurship as, say, organized response to opportunity, which would allow us to subsume both business start-ups and institutional change. But this would commit scholars to clarifying, in each study, which opportunities they mean, and which responses they have found to be decisive. I think we can distinguish some fields from others by the degree to which they demand that sort of conceptual commitment.

    In the current state, it’s easy to get lost, yes. But it’s also easy to get in.

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    Thomas

    February 19, 2011 at 11:19 am

  5. Randy – good point, and I agree with you. My thinking is already pretty much aligned with yours. As you can see from my slides, I’m less interested in explaining which individuals participate in start-ups, IPOs, etc. than I am in explaining how collective identity formation helps spur new markets, knowledge spillover, start-up waves, etc.

    There’s an interesting collective-individual causal relationship that would be worth investigating as well. What is the relationship between collective identity formation and individual identity articulation? In my post, I guess I assumed that there would be a positive correlation between the two, but that might not be the case.

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    brayden king

    February 19, 2011 at 1:35 pm

  6. Thomas, ” organized response to opportunity, “. Quite a few entrepreneurship researchers would strongly disagree with this way of framing it (cf. the ongoing discussion on opportunity creation vs. discovery).

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    Carsten Bergenholtz

    February 19, 2011 at 1:56 pm

  7. Yes, Carsten, that’s the point. The disagreement over the framing of the central question dominates over comparative answers.

    Consider this conversation:

    “Entrepreneurs discover opportunities by means of X, Y, Z and exploit them by means of P, Q, R.”
    “No; entrepreneurs *create* opportunities.”
    “Sure, in a manner of speaking. But that just means that they do Q after Z, right? I mean, they don’t create the opportunity ex nihilo, right? You’re just talking about the early stages of a particular kind of exploitation of a particular kind of opportunity that has been discovered in a particular way. We might call it an opportunity to ‘create an opportunity’, but only in a manner of speaking.”

    Now, the next move could be to stand one’s ground that there is a fundamental disagreement about what entrepreneurship is. And that can happen in a field where the overarching theory does not have strong normative force. Brayden’s post is essentially saying that that’s the kind of field entrepreneurship research is.

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    Thomas

    February 19, 2011 at 2:44 pm

  8. Entrepreneurship is a field that is also investigated by economists. But from what I can tell, they don’t seem to bother with the issues described by Brayden.

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    Wajd

    February 19, 2011 at 6:54 pm

  9. I never really see the point in discussions about definitions. To me, a definition is a convention about which empirical phenomenon we refer to by uttering a certain word, nothing more. Asking what entrepreneurship “really is,” is a form of essentialism. Just be clear about which empirical problem you want to study, give it a label (or another), and get on with the research. Do astronomers discuss about “the true nature” of a star?
    (That is not to say, of course, that definitions in itself – how people give names to things – as a social phenomenon cannot be a legitimate topic for social research. But that is something else).

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    Rense

    February 19, 2011 at 11:27 pm

  10. Rense – I’d sorta agree with you. We certainly don’t want definitional issues to keep a field from progressing or to keep us from doing empirical work. I know that definitions are always up for grabs. That said, I think impreciseness in definitions has nearly turned institutional theory into a sinkhole of mushiness. I used to say, ‘who cares what an institution is? It’s the phenomena that we care about and we know enough about them to know when they’re institutional in nature.” But I don’t think that’s the case anymore. Institutional theorists want to apply their theory to everything and, because of that, institutional theory is losing any of the explanatory power it once had. If everything is institutional, then how do we know when or how its propositions ought to apply?

    I think this all goes back to figuring out scope conditions. Much of social theory is about generalizing, and you can’t really generalize effectively unless you know how to draw scope conditions. And I don’t think you can draw good scope conditions unless you have a reasonably good definition of what it is you’re studying. Institutional theory has forgotten what what its scope conditions are because it no longer has a precise definition of what it is trying to study or figure out about the world.

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    brayden king

    February 19, 2011 at 11:57 pm

  11. FWIW, in 2006 astronomers did discuss “the true nature” of a planet, and decided that a very popular one really wasn’t (very much of) one at all.

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    Thomas

    February 20, 2011 at 10:59 am

  12. Well I think that’s a nice example of a definition as a social convention. They were trying to agree on a useful classification, not to discover a “true nature”.

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    Rense

    February 20, 2011 at 7:16 pm

  13. I think it was bit more than just social convention. At the time of Pluto’s discovery planethood really only required a certain observational stability. If you could track something moving in what was obviously an orbit around the sun (plus some other conditions) you could assume it was a planet. But with greater knowledge of the Kuiper belt, it became clear that Pluto was one of too many objects to count as a planet. This forced the development of a definition that included the idea of having “cleared” your orbit, i.e., that you’re pretty much the only thing circling the sun in your lane. So the definitional issue was a substantive one. It really did change the “true nature” of planets. (I’m no expert on this, by the way, so my history may be off a bit, but it’s something like that.)

    The analogy to social science might even be instructive. You begin by studying things that are obviously institutions; then, using the same methods of observations, you discover something that behaves somewhat like institutions, but is hard to study in detail with the old methods (too small, too inaccessible). Once your methods catch up with the small, faraway object, you realize it is surrounded by many more, somewhat similar objects. But these objects wouldn’t count as institutions at all on the old definition (because it is tied to methods that wouldn’t detect them at all). So you end up having to think through your definitions. What was it about those big easily observable institutions you started with that made them institutional? And does that little institution-like object really have those properties?

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    Thomas

    February 20, 2011 at 9:07 pm

  14. […] Brayden’s post resonated with me. There is something rotten in the state of entrepreneurship studies. Brayden thinks that the field has a serious definitional problem. Of course, he’s not the first to raise this issue. It’s one of the first things you notice when you start reading in the area. […]

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  15. Thomas: No, I don’t think the outcome of the discussion “changed the true nature of a planet.” To paraphrase Popper, it was an answer to the question “what shall we (not) call Pluto?” and not to the question “What is a planet?”. Questions like “What is a planet?” or “What is entrepreneurship?” only make sense if you believe that there exists correct answers to such questions, i.e., that there exists a true nature of such things that we could discover. If you don’t believe that – and I strongly doubt that either the astronomers or Brayden do – then maybe you shouldn’t ask the question.

    I agree with your institutions examples until the penultimate sentence. Yes, it is sometimes useful to readjust our labels if they don’t properly align anymore with the things we’re interested in. But no, there is nothing about those big things that inherently makes them institutional. It’s just our label.

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    Rense

    February 22, 2011 at 1:42 am

  16. Like I say, I’m no expert on the recent history of astronomy, but I think you’re wrong about that, Rense.

    In 2006 (in order to deal with Pluto, granted) astronomers changed their operational definition of “planet” to include something (clearing its own orbit) that they simply hadn’t thought of before. Pluto was the occasion, to be sure. But the solution went beyond Pluto (!). They had to ask and answer the question, “What is a planet?” That said, we agree that this is not a metaphysical question in any deep sense, but it was a (very small) revision of the ontology of astronomy.

    As to that penultimate sentence of mine, are you saying there is nothing “really” about Saturn that makes it a planet? That it’s just a label? That can’t be right. But until that tricky issue of Pluto came up a few years ago, astronomers hadn’t noticed how effectively Saturn had cleared its orbit.

    There is a great sentence in Wikipedia about this: “Pluto fails to meet the [“clearing the neighborhood”] condition, since its mass was only 0.07 times that of the mass of the other objects in its orbit (Earth’s mass, by contrast, is 1.7 million times the remaining mass in its own orbit).”

    Similar things can be said about “uberinstitutions” vs. other less-obviously-institutional-but-otherwise-institution-like social phenomena.

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    Thomas

    February 22, 2011 at 4:35 pm


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