Academic journal article Journal of Small Business Strategy

A Revised Conceptual Model of the Firm-Level Entrepreneurial Process

Academic journal article Journal of Small Business Strategy

A Revised Conceptual Model of the Firm-Level Entrepreneurial Process

Article excerpt


Research suggests that existing conceptualizations of firm-level entrepreneurship may not be sufficient in fully explaining the construct (Brown, Davidsson, & Wiklund, 2001; Brush, Manolova, & Edelman, 2008). In particular, there is little consensus regarding the organizational attributes that underlie the entrepreneurial act. This study integrates and extends existing conceptualizations to form a new theoretical framework for studying the firm-level entrepreneurial process. It is argued that three attributes: innovativeness, proactiveness, and strategic renewal, are necessary preconditions for firms to be considered truly "entrepreneurial." The role that these three firm-level attributes play in generating important entrepreneurial outcomes is also considered.

Keywords: firm-level entrepreneurship, innovativeness, proactiveness, strategic renewal


Firm-level entrepreneurship is recognized as offering various strategic benefits to organizations, including increased financial performance (Keh, Nguyen, & Ng, 2007; Wiklund & Shepherd, 2005; Zahra & Covin, 1995; Zahra & Garvis, 2000), heightened levels of organizational learning (Dess, Ireland, Zahra, Floyd, Janney, & Lane, 2003; Wang, 2008; Zahra, Nielsen, & Bogner, 1999), and the development of a competitive advantage (Covin & Miles, 1999). Reflecting this fact, numerous conceptualizations and operationalizations of firm-level entrepreneurship have been offered in the entrepreneurship literature (Burgelman, 1983; Covin & Slevin, 1989; Guth & Ginsberg, 1990; Lumpkin & Dess, 1996; Miller, 1983). While these theories and measures have advanced the nature of research on this topic, there are still numerous issues that need to be addressed to enable future research on firm-level entrepreneurship to reach its true potential (Brown, Davidsson, & Wiklund, 2001; Brush, Manolova, & Edelman, 2008; Davidsson, Low, & Wright, 2001; Zahra, Jennings, & Kuratko, 1999). Specifically, greater research attention is needed in determining the attributes underlying firm-level entrepreneurship that allow firms to develop a competitive advantage for their organization (Covin & Miles, 1999).

Consistent with the assumptions underlying the resource-based theory of the firm (RBT), entrepreneurial organizations utilize key resources and strategic activities in order to develop a competitive advantage (Alvarez & Busenitz, 2001). Extending the work of Covin and Miles (1999), there are four important outcomes that organizations generate through firm-level entrepreneurship. First, they can develop new products in order to capitalize on market trends, or they can enter existing markets that offer abundant opportunities. Second, they can develop new processes in order to better integrate their strategy within the organization's value chain (Dess et al., 2003). Third, they can utilize first-mover advantages to proactively create new markets that have not yet been realized or tapped by their competition. Fourth, firms can redefine their key strategies, ideas, and structures in an effort to take advantage of opportunities present in the external environment.

However, it is still unclear as to which organizational attributes are necessary components in enabling firms to achieve these four types of firm-level entrepreneurial outcomes. While these outcomes may be extensions of organizations having adopted an entrepreneurial mindset, it is still necessary to determine the key attributes that must be present within an organization for it to actually be considered entrepreneurial. While researchers have elaborated on the potential attributes underlying firmlevel entrepreneurship (i.e., Brown et al., 2001; Covin, Green, & Slevin, 2006; Lumpkin & Dess, 1996), there has been less agreement regarding the attributes that are fundamentally necessary in order for firm-level entrepreneurship to occur (Covin & Miles, 1999). …

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