Potential for opportunity recognition along the stages of entrepreneurship
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RESEARCH
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Potential for opportunity recognition along the stages of entrepreneurship Kishinchand Poornima Wasdani1* and Mary Mathew2,3,4,5 * Correspondence: [email protected] 1 Department of Management Studies, Indian Institute of Science, Bangalore 560012, India Full list of author information is available at the end of the article
Abstract The study primarily verifies whether ORP differs in stages of entrepreneurship and aims at identifying factors that influence ORP in different stages of entrepreneurship. The stages of entrepreneurship include pre-stage (individuals planning to start ventures), early-stage (entrepreneurs with ventures less than 3 years old) and late-stage (entrepreneurs with ventures more than 3 years in existence). The factors that were studied include personal factors (cognitive style, self-efficacy and motivation) and interpersonal factors (bridging social capital and bonding social capital). The results indicate the influence of different factors in different stages of entrepreneurship. Keywords: Entrepreneurship; Social capital; Self-efficacy; Cognitive style and Motivation
Background Entrepreneurial individuals are success driven, and hence are more likely to engage in the right kind of opportunity recognition to ensure that they are successful. Entrepreneurial opportunities are believed to exist when individuals have a special understanding of the value of uncommon opportunities and act upon this understanding, which results in entrepreneurial income or “rent”. If the individual does not act on this perception it results in an entrepreneurial loss (Alvarez and Barney 2000). One of the various definitions of opportunity recognition given by Lumpkin and Lichtenstein (2005:457) is “the ability to identify a good idea and transform it into business concepts that add value and generate revenue”. This definition makes an emphasis that opportunity recognition is an inseparable part of entrepreneurship. According to several researchers like Shane and Venkataraman (2000), Krueger (2003), Sarason et al. (2006) and Mitchell et al. (2004), opportunity recognition is an integral part of the entrepreneurship process. Individuals possessing this skill have probably a higher inclination to entrepreneurship than the ones who do not posses them (Shane et al. 2003). There are a number of factors that influence opportunity recognition of entrepreneurs including individual traits and networking capabilities (Nicolaou et al. 2009). Without an opportunity, whether created or discovered, entrepreneurial activities cannot exist even though the individual has all the characteristics that influence the success of the venture creation process (Short et al. 2010). In other words it is a fundamental unit of entrepreneurship. Opportunity need not always be a break-through; it can sometimes be a traditional idea with a new approach or a mix of existing ideas. However the resources available to convert these ideas to opportunities, © 2014 Wasdani and Mathew; licensee Springer. This is an Open
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