Academic journal article Journal of Business and Entrepreneurship

Entrepreneur or Entrepreneurs? Justification for a Range of Definitions

Academic journal article Journal of Business and Entrepreneurship

Entrepreneur or Entrepreneurs? Justification for a Range of Definitions

Article excerpt

ABSTRACT

The Entrepreneurial Conation Grid (theoretically based in the Austrian school of economics and information processing) facilitates the point-in-time classification of entrepreneurs or firms involved in complex markets. A firm or entrepreneur's classification will migrate between cells over time as specific skills are enhanced. Previous definitions of entrepreneurs are placed within the Entrepreneurial Conation Grid, showing this theoretical justification for multiple definitions/classifications of entrepreneurial activities.

INTRODUCTION

Entrepreneurship has gained recognition in recent years as a critical link in the growth of the economy and a necessity for national prosperity (Kirzner, 1979,1982; Miller, 1983; Covin & Slevin, 1991; Zahra, 1993; Dana, 1996). However, there has been and continues to be a wide range in definitions of entrepreneur (Kets de Vries, 1985; Gartner, 1990; Dana, 1996; Mandel, 1996). Such definitions range from considering the person of the entrepreneur (Cantillion, 1775; Danhof, 1949; among otiiers) to the act of entrepreneurship (Shapero, 1975,1982; Welsh & White, 1981; Kirzner, 1973, 1978, 1982), which allows firm level attributions to define the entrepreneur (Miller, 1983; Covin & Slevin, 1991; Zahra, 1993). Still other definitions distinguish 'general' entrepreneurial orientation and a 'business' entrepreneurial act (Huefher & Hunt, 1994).

Previous work has attempted to reconcile the range of definitions (Kets de Vries, 1983; Gartner, 1990; Dana, 1996; Mandel, 1996), but no attempt to date has satisfactorily accommodated, the full range of definitions (Kets de Vries, 1983; Dana, 1996). Yet, the importance of entrepreneurial activity supports our continued efforts to understand this range of definitions.

Current work attempting to understand marketplace complexity indicates that markets act more like a disequilibrium-based system (Stacy, 1995; Black & Farias, 1996). By looking at the assumptions underlying a disequilibrium-based economic system, the Austrian school of economics, we may shed light on mis range of definitions of entrepreneurship.

AUSTRIAN ECONOMICS

To the Austrian economist, the market is "a process of learning and discovery, rather than an equilibrium state of affairs" (Klein, 1992:2). Unlike neoclassical economics, with its equilibriumbased assumptions, Austrian economics assumes that ex ante plans will not be realized and so is based on me concept of uncertainty. Because people inherently cope with this uncertainty (Kirzner, 1982; Mises, 1949), they are posited as rational entities prone to mistakes (Mises, 1957). Mistakes, inefficiencies, and even failure, happen, but their occurrence is not the same thing as irrationality (Mises, 1957). This view accords all action as being future oriented (Kirzner, 1978). In other words, if people pursue purposes linked to the future, then they will act to place themselves in the most preferred of equally available positions (Kirzner, 1978). Such purposeful action seeks out available opportunities (O'Driscoll, 1977).

A key issue in purposeful action is me acquisition and dispersal of knowledge. The market assumption is "not on human rationality, but on human ignorance"(Klein, 1992:4). Because information is assumed never to be fully dispersed nor completely utilized, opportunities abound.

Each individual's acts are a 'speculation' on the future, so there is an inherent link between entrepreneurial activities and human action (Mises, 1949). Entrepreneurial activities are defined as a function of making decisions and taking actions in the face of an uncertain present or future environment and/or me realization of existing opportunities that have remained previously unnoticed (Kirzner, 1982). Such opportunities exist because purposeful action by itself does not guarantee tiiat every opportunity will be instantaneously perceived (Kirzner, 1978). Furthermore, it is absurd to expect that all individuals perceive the same information in the same way, react in the same way, or form the same expectations (Lachmann, 1977). …

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