Academic journal article Journal of Small Business Management

Prospecting for Strategic Advantage: The Proactive Entrepreneurial Personality and Small Firm Innovation

Academic journal article Journal of Small Business Management

Prospecting for Strategic Advantage: The Proactive Entrepreneurial Personality and Small Firm Innovation

Article excerpt

Our study proposed and tested an entrepreneurial process model that examined the interrelationships among a small firm owner's personality, strategic orientation, and innovation. In the first part of the model, it was posited that a proactive personality would directly influence a prospector strategic orientation. This type of strategic orientation would then he a key factor in determining the type of innovations introduced and implemented within the business. Using a sample of l07 small business owners, results revealed that the prospector strategy orientation mediated the relationship between proactive personality and three types of innovations: innovative targeting processes, innovative organizational systems, and innovative boundary supports. Implications for small business managers as well as future research directions are discussed.

In recent years, models of the entrepreneurship process have evolved to depict the interactive nature of key variables influencing new venture success. Researchers have proposed that entrepreneurship can only be understood when the individual elements of the phenomenon are combined. Gartner (1985) was one of the first to propose that four major dimensions of entrepreneurship be integrated: the founder's characteristics, the organization's characteristics, the environment surrounding the firm, and the process by which the new venture is started. The attempt to form a more complex, multi-dimensional theory of the new venture process is not new Historically, researchers have examined the individual traits of entrepreneurs, including the need for achievement (McClelland 1961), autonomy (Hornaday and Aboud 1971), tolerance for ambiguity (Sexton and Bowman 1984), and risk-taking propensity (Begley and Boyd 1986; Brockhaus 1980). A turning point occurred in the late 1980s, when Gartner (1989) defined entrepreneursh ip as a set of activities involved in the creation of an organization. Subsequently, research attention was redirected towards identifying the behaviors towards further understanding the influence of entrepreneurs' perceptions (Cooper, Woo, and Dunkelberg 1988) and their intentions (Bird 1988) on their behavior (Shaver and Scott 1991). Several behaviors have been found to influence small firm performance.

One of these behaviors is opportunity recognition, defined by Christensen, Masden, and Peterson (1989) as perceiving the possibility to create a new business or to significantly change or improve an existing business. Stevenson and Jarillo-Mossi (1986) suggested that entrepreneurs create value by combining resources to exploit an opportunity. Koller (1988) extended this by suggesting that most entrepreneurs recognize (as opposed to seeking) opportunities. Bhave (1994) distinguished between entrepreneurial behavior that was "externally stimulated" (cases in which the decision to launch the venture preceded opportunity recognition) and behavior that was "internally stimulated" (when individuals engaged in problem-solving and needs assessment prior to deciding to start a business). Externally stimulated opportunity recognition is the opportunistic search characterized by Cypert and March (1963). Recently, Hills and Shrader (1998) uncovered fundamental opportunity recognition behaviors, including founding compan ies, starting a major new part of the business, and acquiring any new type of business.

Considerable attention has also been paid to the risk-taking behavior of entrepreneurs. Mullins and Forlani (1998) found that entrepreneurs exhibit their most risk-averse behavior when they are either in control of their venture but lack market skill, or without control of the venture but have technical skill. This corroborates Timmons' (1994) assertion that entrepreneurs are prudent managers of risk. Das and Teng (1997) introduced and tested a temporal framework for analyzing entrepreneurs' risk-taking behavior. This contingency approach to entrepreneurials' risk behavior proposed developing different entrepreneurial types (for example, craftsman or opportunistic) by employing their distinct risk-taking behavior in the short- and long-term. …

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