A Model of Strategic Entrepreneurship: The Construct and its Dimensions
Section snippets
The Scope of Strategic Management
To understand differentials among firm’s performance, strategic management examines firms’ efforts to develop sustainable competitive advantages as a determinant of their ability to create wealth (De Carolis, 2003, Rouse & Dallenbach, 1999). Favorable market positions (Porter, 1985) and the possession of valuable, rare, imperfectly imitable, and nonsubstitutable resources idiosyncratic to the firm (Barney, 1991) are the most frequently cited sources of sustainable competitive advantage. Recent
Entrepreneurial Mindset
An entrepreneurial mindset is required to successfully engage in SE. In McGrath and MacMillan’s (2000: xv) words, “The successful future strategists will exploit an entrepreneurial mindset, melding the best of what older models have to tell us with the ability to rapidly sense, act, and mobilize, even under highly uncertain conditions.” An entrepreneurial mindset is both an individualistic and collective phenomenon; that is, an entrepreneurial mindset is important to individual entrepreneurs as
Entrepreneurial Culture
Organizational culture is a system of shared values (i.e., what is important) and beliefs (i.e., how things work) that shape the firm’s structural arrangements and its members’ actions to produce behavioral norms (i.e., the way work is completed in the organization) (Dess & Picken, 1999). More formally, culture has been defined by six properties: “(1) shared basic assumptions that are (2) invented, discovered, or developed by a given group as it (3) learns to cope with its problem of external
The Tenets of the Resource-based View
Drawn from at least four theoretical sources (the study of distinctive competencies, Ricardian economics, Penrosian economics and the study of the anti-trust implications of economics—Barney & Arikan, 2001), the RBV of the firm provides the theoretical underpinnings for understanding how resources can be managed strategically. Thus, the RBV is used by strategic management scholars and increasingly by entrepreneurship scholars to identify and explain persistent performance differences among
Applying Creativity and Developing Innovation
Schumpeter, 1934, Schumpeter, 1942 highlighted the importance of creativity and innovation within the context of market dynamics. The concept of creative destruction comes from Schumpeter’s work; creative destruction involves the processes through which firms act and react in the pursuit of opportunities in free markets. Schumpeter (1942: 83) argued that creative destruction is a process “… that incessantly revolutionizes the economic structure … incessantly destroying the old one, incessantly
Conclusions and Implications
The SE construct (which includes opportunity- and advantage-seeking behaviors) contributes to our understanding of how firms create wealth. Firms that identify potentially valuable opportunities but are unable to exploit them to develop a competitive advantage will not create value for their customers or wealth for their owners. Firms that build competitive advantages but lose their ability to identify valuable entrepreneurial opportunities are unlikely to sustain those advantages over time. As
R. Duane Ireland holds the W. David Robbins Chair in Strategic Management in the Robins School of Business, University of Richmond. In addition to JOM, his research has been published in AMJ, AMR, AME, ASQ, and SMJ among other journals. Currently, his research interests focus on the effective management of strategic alliances, the relationship between strategic entrepreneurship and improved firm performance, managing firm resources to create value, and corporate entrepreneurship.
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R. Duane Ireland holds the W. David Robbins Chair in Strategic Management in the Robins School of Business, University of Richmond. In addition to JOM, his research has been published in AMJ, AMR, AME, ASQ, and SMJ among other journals. Currently, his research interests focus on the effective management of strategic alliances, the relationship between strategic entrepreneurship and improved firm performance, managing firm resources to create value, and corporate entrepreneurship.
Michael A. Hitt is a Distinguished Professor and holds the Joseph Foster Chair in Business Leadership and the C.W. & Dorothy Conn Chair in New Ventures at the Mays Business School, Texas A&M University. He received his Ph.D. from the University of Colorado. His current research interests include strategic entrepreneurship, corporate governance, international strategy, and managing resources to create value.
David G. Sirmon is a doctoral candidate in management at Arizona State University. His current research interests include the management of resources to create value, strategic entrepreneurship, and the effects of relative resource portfolios on performance. His research has appeared in JOM and Entrepreneurship Theory & Practice.