Posts filed under ‘Entrepreneurship’
Klein-Mahoney Smackdown
| Peter Klein |
Those of you in the Pacific Northwest may wish to drop by the annual meeting of the American Agricultural Economics Association, 29 July to August 1 in Portland, Oregon, for this session organized by Randy Westgren:
Economic Theories of Entrepreneurship
Monday, July 30, 10:30am – 12:00pmThis session will offer the chance to explore the economic foundations for the study of entrepreneurship. Joseph Mahoney and Peter Klein will engage in a “Point-Counterpoint” discussion on the theory of entrepreneurial behavior using the lenses of classical, neoclassical, Austrian, institutional, and Carnegie School economics. The discussion will explicitly evoke audience participation in an open and informal design. The various lenses will be used to highlight where the (usually) amorphous study of entrepreneurship can benefit from theoretical foundations.
Last man standing wins.
O&M at the AoM
| Peter Klein |
O&M will be well represented at the Academy of Management annual meeting in Philadelphia, 3-8 August 2007. Former guest blogger (and Philly native) Joe Mahoney is president-elect and program chair for the Business Policy and Strategy Division, so you know the program will be good.
I am chairing a Professional Development Workshop (PDW) titled “The Austrian School of Economics: Applications to Organization, Strategy, and Entrepreneurship” featuring former guest bloggers Mahoney and Dick Langlois along with Elaine Mosakowski, Yasemin Kor, Nicolai, and myself. Teppo of orgtheory.net has put together a session on “Entrepreneurship and Strategic Organization: Taking Stock, Problems, and Future Directions” which includes Jay Barney, Todd Zenger, Kirsten Foss, Mosakowski, Nicolai, and me. Other sessions of note include a PDW on the fifth anniversary of the excellent Strategic Organization (Nicolai is in that one too, along with O&M favorite and guest blogger Chihmao Hsieh’s mentor Jackson Nickerson); a session on the philosophical and epistemological foundations of strategy and organization theory, organized by Teppo and featuring regular O&M commentator J. C. Spender; a session on cognitition in organizational economics; and many other interesting workshops, lectures, and sessions on organization, strategy, entrepreneurship, and the market process.
PS: Before you go, be sure to study this article on Philadelphia dining from the current issue of Food and Wine Magazine.
Foss & Foss Paper on Opportunity Discovery and the RBV
| Nicolai Foss |
With my frequent co-author, Kirsten Foss, I have written “New Value Creation in the Resource-based View: How Knowledge and Transaction Costs Shape Opportunity Discovery.” (more…)
Keynes on the Entrepreneur
| Peter Klein |
Robert Solow, in his review of Thomas McCraw’s Shumpeter biography, emphasizes the contrast between Schumpeter and Keynes. Schumpter’s Business Cycles (1939) was long, detailed, convoluted, and mostly ignored. Keynes’s General Theory (1936) was — at least as interpreted by Meade, Hicks, Hansen, etc. — short, straightforward, operational, and hugely popular. (The book itself is a tough read.) Not surprisingly, Solow’s sympathies lie with Keynes. Schumpeter, he writes,
seemed not to understand what Keyensian economics was about, or why it won over the younger [i.e., Solow’s] generation. For example, he described Keynes as the apostle of consumer spending (in contrast to his own emphasis on innovational investment). But in fact consumer spending is passive in Keynes’s General Theory. The driving force of the aggregate economy is actually investment spending; and Keynes put great causal weight on “animal spirits” and “the state of long-run expectations,” both of which are much more akin to entrepreneurial drive.
It’s been a while since I’ve read Keynes carefully (and hopefully will be a while before I do so again), but this can’t be right. To be sure, “entrepreneurial behavior,” meaning aggregate investment, is critially important in the Keyensian system. However, it is precisely because entrepreneurs are guided not by reasonable conjectures, but by animal spirits — i.e., because investment is so unstable — that all the action lies with consumption. Central planners have no choice but to manipulate aggregate demand; there is little they can do about (highly volatile) aggregate investment.
More generally, Keyes’s investment theory has little to do with any systematic account of the entrepreneur and his function. Am I wrong?
e-Clips
| Peter Klein |
Check out e-Clips, a digital media archive provided by Cornell University’s Department of Applied Economics and Management. Lots of material for entrepreneurship and management courses. What professor can resist this pitch:
Wake up your students! Ever have a moment in class where it seems students are zoning out? Or feel like you are reading an assignment written by a zombie? Help is on the way. Welcome to e-Clips, the world’s largest collection of digital video clips on entrepreneurship, business and leadership.
Congratulations to Drs. Chambers, Chapman, and Xue
| Peter Klein |
Three PhD students whose dissertation committees I chaired or co-chaired completed their work this semester. Molly Chambers (University of Missouri) studied the emergence of “new generation” cooperatives in Renville County, Minnesota and developed a conceptual model of team or “collective” entrepreneurship. The new generation cooperative is a patron-owned firm characterized by closed membership, appreciable and partially transferable equity shares, binding delivery obligations, and an emphasis on value creation, rather than the protection of existing rents — a model designed to mitigate the problems of vaguely defined property rights that characterize traditionally organized cooperative. Molly used a survey and structured interviews to compare the effects of transaction costs, ownership costs, and spawning conditions on the development of the Renville cluster during the 1990s. (more…)
Design for the Bottom of the Pyramid
| Peter Klein |
C. K. Prahalad’s “Bottom-of-the-Pyramid” approach to development gets mixed reviews. This firm takes it seriously: Paul Polak’s International Development Enterprises, which develops and markets low-cost, low-tech tools and implements for farmers in the developing world. Here is the web version of a Smithsonian exhibition, “Design for the Other 90%,” highlighting such products and services. “The majority of the world’s designers focus all their efforts on developing products and services exclusively for the richest 10% of the world’s customers,” says Polak. “Nothing less than a revolution in design is needed to reach the other 90%.”
Some designs, like the Q Drum, are breathtakingly simple, while others, like the Aquastar Plus! and Portable Light Project, are more sophisticated. The One Laptop Per Child project is also featured.
Hat tip to Fast Company, which provides additional information.
TV Dinners . . . and Non-TV Dinners
| Chihmao Hsieh |
Remember the times when families would get together at the dinner table for a meal and little Johnny would yell out, “Can we turn on the TV during dinner?” Ah yes, those were the good ol’ days.
How 1990s.
Nowadays, as highlighted in this AP article released today, television is not only losing its grip on families but also on individuals. (more…)
Opportunity Discovery Conference in St. Louis
| Nicolai Foss |
The past two days, three of the four O&M bloggers (Steve, Peter, and I) participated in a Washington University conference on opportunity discovery. Opportunity discovery is (in my interpretation) the outcome of actions initiated by individuals or teams directed at identifying hitherto neglected market needs and wants. Needless to say, OD is fundamentally what entrepreneurship is about. (Here are earlier O&M posts on eship).
The conference was a small gathering with the participation of about twenty-five people from entrepreneurship, strategic management, sociology, organizational behavior, psychology, and marketing (it included Jay Barney, Rich Makadok, Todd Zenger, Anne Marie Knott, David Meyer, and others). One possible interpretation is that scholars from diverse fields consider the entry barriers to the eship field to be low. Perhaps they are. . . . (more…)
The Market for Organization Equals USD 7.6B
| Chihmao Hsieh |
Home organization (in 2009), that is.
A CNN article posted online last month has re-appeared in the headlines today, probably in response to the woman who is virtually selling virtually (sic) all her belongings in one single auction on EBay (see the actual listing here). To spare you the reading, the article essentially describes our “hyper-consumptive society deluged by its own belongings,” mentions the TV shows and firms that create products and promote services to help us organize our belongings, and highlights associations like the new-but-fast-growing National Association of Professional Organizers.
Personally, in the last few years I’ve become much more mindful of the number of discrete items I keep at home, that mindfulness mainly a side effect of thinking in terms of this kind of complexity theory and this subfield of cognitive science.
Reminder: Abstract Submission Deadline
| Peter Klein |
Next Tuesday, May 1, is the deadline for submitting an abstract to the University of Missouri’s Frameworks for Entrepreneurship Research conference. Keynote speakers include O&M favorites Pierre Desrochers and Randy Westgren (who comments as REW) so you don’t want to miss it.
How is What is an Opportunity a Valuable Research Question?
| Chihmao Hsieh |
In introducing the April 2007 Special Issue of Small Business Economics, guest editors Jeffery McMullen and Lawrence Plummer, and Zoltan Acs ask “What is an Entrepreneurial Opportunity?” First, the abstract:
The nature and source of entrepreneurial opportunity are important issues for understanding how markets function and come into being. In addition to describing the forum held on the topic and summarizing the contributions of the articles that appear in the special issue, this article shares a number of lessons learned during the workshop and the editorial process. We explore three of the most important reasons for confusion about the opportunity construct: (1) the “objectivity” of opportunity, (2) the perceived importance of one particular individual in determining the direction of the social world and (3) what distinguishes the sub-class of “entrepreneurial” opportunity from the broader category of opportunity in general. Finally, we offer some directions for future research by illuminating important issues that emerged from the workshop but that remain largely unanswered by the papers of this special issue.
Needless to say, the authors courageously untangle some fundamental concepts (i.e. different types of ‘objectivity’ as it might relate to the notion of opportunity). Yet a sentence in the article’s second paragraph gave me pause: “…without a clear understanding of the nature of opportunity, formulating logically consistent prescriptions for both policy and practice is problematic because any theoretical basis of empirical results would be incomplete” (p. 273). (more…)
Design Puzzles
| Steven Postrel |
So you’ve purchased your coffee and chosen to sit at one of those round outdoor tables. As you lean on the table to write comments on a paper, it rocks annoyingly, possibly spilling some of your coffee. You try moving the table slightly on the uneven pavement, hoping to stumble into a stable configuration for its four feet, but several attempts fail. Eventually you resort to shimming one of the table feet with a piece of folded up paper, or a stack of sweetener packets, and this creates at least a metastable condition. Looking around, you notice that many other tables have similar combat repairs, so that the cafe looks like a furniture trauma ward. (more…)
Two Papers on Entrepreneurship
| Peter Klein |
Joe Salerno, “The Entrepreneur: Real and Imagined.” Contrasts Kirzner’s concept of the pure entrepreneur, an agent who possesses superior alertness to profit opportunities but himself owns no resources, with an alternative concept of the entrepreneur as property owner, a concept with equally strong roots in the Austrian tradition. Complements the Knightian approach emphasized in several of these papers.
Steve Phelan, “Entrepreneurship as Expectations Management.” Starting from the resource-based view of the firm, explores how firms can influence market participants’ beliefs about the value of resources it possesses. An interesting attempt to integrate entrepreneurship into the RBV.
Utility Strategy
| Steven Postrel |
Skeleton of a Harvard Business Review article:
How do you get sustainable advantage in a service business today? One approach: Become a new-wave utility. Think about Google or Yahoo, eBay, Amazon, etc. on the Internet; think about UPS or FedEx, Grainger, Ryder, Public Storage in logistics; think about McDonald’s, Starbucks, 7-Eleven, in convenience food consumption. (more…)
Call for Papers: Entrepreneurship Research in Food, Agriculture, Natural Resources, and Development
| Peter Klein |
The University of Missouri’s McQuinn Center for Entrepreneurial Leadership, with which I am affiliated, is hosting a conference in Kansas City, 18-19 October 2007, titled “Frameworks for Entrepreneurship Research in Food, Agriculture, Natural Resources, and Rural Development.” Here is the call for papers. Keynote speakers include Jan and Cornelia Flora, Randy Westgren, Pierre Desrochers, and others to be announced.
Microfinance and Growth
| Peter Klein |
As excitement over the Yunnus Nobel fades, microfinance skeptics continue to emerge. The latest is Thomas Dichter, who writes in a new Cato paper:
Most people, poor or otherwise, are not entrepreneurs, so there is little reason to think that mass credit would in general lead to viable business start-ups. Today as in the past, business start-ups in the advanced countries depend predominantly on savings and informal sources of credit; past forms of microcredit never played a role in small business development, and much microcredit is actually used for consumption rather than investment. In the history of today’s rich countries, moreover, economic growth occurred first, then came credit for the masses. That credit was and is predominantly for consumption rather than investment.
The paper is “A Second Look at Microfinance: The Sequence of Growth and Credit in Economic History. And here is a rare specimin, an empirical paper on microcredit that uses actual microdata.
European Entrepreneurship
| Peter Klein |
Europe’s economic problem, writes Nobel Laureate Ned Phelps in last week’s Wall Street Journal, is its lack of dynamism — “how fertile the country is in coming up with innovative ideas having prospects of profitability, how adept it is at identifying and nourishing the ideas with the best prospects, and how prepared it is in evaluating and trying out the new products and methods that are launched onto the market.”
Europe, Phelps argues, lacks the economic culture and economic institutions to encourage dynamism. Europe’s economic institutions “typically exhibit a Balkanized/segmented financial sector favoring insiders, myriad impediments and penalties placed before outsider entrepreneurs, a consumer sector not venturesome about new products or short of the needed education, union voting (not just advice) in management decisions, and state interventionism.”
Man, how simplistic and comical can you get?
The Dark Side of Charisma
| Peter Klein |
Entrepreneurship has been described as charismatic leadership or charistmatic authority. But what exactly is charisma?
The WSJ’s Saturday edition reviews Philip Rieff’s posthumously published Charisma: The Gift of Grace, and How It Has Been Taken Away from Us. Rieff, the distinguished cultural sociologist who taught at Brandeis, Berkeley, Harvard, and Penn, began the book in the late 1960s but went on to other projects, completing it just before his death earlier this year. Reviewer Adam Wolfson describes the book as a jeremiad against popular culture, much like Allan Bloom’s Closing of the American Mind. (more…)
New Entrepreneurship Society and Journal
| Peter Klein |
Here is the webpage for the Southern Entrepreneurship Journal, to be published by the newly formed Southern Academy of Entrepreneurship. From the mission statement:
Our dream is to offer an eclectic, cross-disciplinary entrepreneurship research experience. We do not care what your field may be. Our only concerns are (a) do you have something interesting to say about the theory or practice of entrepreneurship, and (b) do you have any evidence that supports you? We also want to be open minded about evidence. The Journal will be open to a range of evidence, including case studies, qualitative research broadly defined, as well as statistical analyses.
Thanks to Ed Lopez for the pointer.
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