Academic journal article Entrepreneurship: Theory and Practice

The Decision to Exploit Opportunities for Innovation: A Study of High-Tech Small-Business Owners

Academic journal article Entrepreneurship: Theory and Practice

The Decision to Exploit Opportunities for Innovation: A Study of High-Tech Small-Business Owners

Article excerpt

We collected longitudinal data from 160 high-tech small-business owners to analyze if the planned behavior constructs are related to their decision to innovate, as evidenced by their behavior (rather than their intentions to do so). Subjective norms and perceived behavioral control are directly related with innovation exploitation. Attitude towards the opportunity is significant only when respondents perceive both positive subjective norms and being in high control. This multiplicative effect suggests that the planned behavior constructs can be thought of as necessary conditions beneath which business owners are much less likely to exploit identified opportunities. Implications are discussed.

Introduction

Innovation is nowadays broadly recognized as important for the survival and growth of firms. Accordingly, the past 20 years have witnessed increased attention for the entrepreneurial efforts of businesses. A substantial part of the field of entrepreneurship research focuses on individuals discovering opportunities, deciding to exploit them, and implementing them through a process of resource acquisition and organization (Shane, 2003). Entrepreneurship is generally regarded as a multistage process that can be defined as "an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing markets, processes, and raw materials through organizing efforts that had previously not existed" (Venkataraman, 1997, in Shane, p. 7).

An important condition for entrepreneurship is that it "requires a decision by a person to act upon an opportunity because opportunities themselves lack agency" (Shane, 2003, p. 7). Opportunities are exploited only when human beings decide to act. Accordingly, for most businesses to be innovative, and particularly the smaller ones, which are central in the current article, innovation primarily depends on the behavior of the business owner to identify and act upon opportunities.

This study focuses explicitly on small-business owners' decision to exploit opportunities they have already identified, i.e., to engage in the part of the entrepreneurial process in which resources are recombined to create new means-end frameworks (Shane, 2003). A drawback in previous work is that the stage in the entrepreneurial process at which individuals decide to exploit received scant attention. Shane, for example, in his broad review of the entrepreneurship literature, concluded that:

   ... we could use more research that examines the actual decision to
   exploit opportunities rather than the static state of being an
   entrepreneur. (...) Research on the actual decision to exploit
   opportunities among people at risk of such exploitation would
   overcome many of the limitations inherent in much of our existing
   research on this topic, as well as provide more precise
   explanations for how individual differences influence the
   entrepreneurial process. (p. 264)

We draw on a well-known social psychological model, i.e., the theory of planned behavior (Ajzen, 1991), to identify psychological constructs that have been scantly applied to incumbent small-business owners. More specifically, we propose that the decision to exploit correlates with business owners' attitude towards the opportunity (whether they find it attractive), subjective norms (whether they experience positive pressure from close social ties), and perceived behavioral control (whether they are confident of acquiring the resources needed for exploitation and effectively combining these). In addition to past work, we also explore potential interactions between these constructs, developing the idea that they may be necessary conditions for exploitation, no matter how favorable the other constructs.

This research deviates from earlier work in various respects. First, past planned behavior studies in the field of entrepreneurship focused on new firm formation and self-employment (e. …

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