Knowledge that Transforms

This study traces the origins of innovative strategies by examining the attributes of ‘innovative entrepreneurs.’ In an inductive grounded theory study of innovative entrepreneurs, we develop a theory that innovative entrepreneurs differ from executives on four behavioral patterns through which they acquire information: (1) questioning; (2) observing; (3) experimenting; and (4) idea networking. We develop operational measures of each of these behaviors and find significant differences between innovative entrepreneurs and executives in a large sample survey of 72 successful and unsuccessful innovative entrepreneurs and 310 executives. Drawing on network theory, we develop a theory of entrepreneurial opportunity recognition that explains why these behaviors increase the probability of generating an idea for an innovative venture. We contend that one's ability to generate novel ideas for innovative new businesses is a function of one's behaviors that trigger cognitive processes to produce novel business ideas. We also posit that innovative entrepreneurs are less susceptible to the status quo bias and engage in these information‐seeking behaviors with a motivation to change the status quo.

Social entrepreneurship has emerged as an important research topic in the literature. This interest stems from social entrepreneurs' role in addressing serious social problems on a worldwide scale while enhancing social wealth, often without regard for profits. In this article, we explain the forces contributing to the formation and rapid internationalization of social ventures. We use the behavioral theory of the firm to distill key attributes of social opportunities and show how these attributes influence the timing and geographic scope of social ventures' international operations.

In this article I provide brief review and comments on three articles presented at the Strategic Entrepreneurship Journal 's Launch Conference and published in this issue of the Journal . Arguing that creativity plays an important role in the entire entrepreneurial process and that contemporary research on creativity has much to offer in advancing our understanding of entrepreneurship, I suggest four new research directions that would expand the scope of entrepreneurship research.

We introduce the concept of team creative cognition and discuss how it is transferred and infused within the team to enable the team's creativity. Specifically, we propose that diverse personal ties outside of the team shape and strengthen individual team member's ‘creative muscle,’ and that this individual creative cognition is infused within the team through modeling processes, ultimately resulting in team creative cognition. We further propose that team member centrality in the team's sociocognitive network, as well as the evolution of the entrepreneurial team, are critical to fully understanding the infusion process and the resulting emergence of team creative cognition.

The entrepreneurial self‐efficacy of lead founders has been generally considered to be a robust predictor of the performance of their firms. Few studies, however, have considered variables that might moderate this relationship. The current study attempts to fill this gap in the literature by examining two possible moderators of the effects of entrepreneurial self‐efficacy on firm performance: dispositional optimism and environmental dynamism. Results indicate that these factors do indeed moderate the effects of entrepreneurial self‐efficacy; in fact, a three‐way interaction between self‐efficacy, optimism, and environmental dynamism was observed with respect to firm performance. Consistent with predictions, in dynamic environments, the effects of high entrepreneurial self‐efficacy on firm performance were positive when combined with moderate optimism, but negative when combined with high optimism. In stable environments, in contrast, the effects of self‐efficacy were relatively weak, and were not moderated by optimism. Overall, results suggest that high self‐efficacy is not always beneficial for entrepreneurs and may, in fact, exert negative effects under some conditions.

Research on cognitive fit suggests that entrepreneurs will be most successful at leading their firms when approaching the entrepreneurial process through the self‐regulatory mode that most closely matches the requirements of their environment and its accompanying perspective on the nature of entrepreneurial opportunities. Consistent with the discovery view of entrepreneurial opportunities, it is suggested that a prevention focus will be the most effective self‐regulatory mode for entrepreneurs leading their firms within stable industry environments, which are characterized by risk. Building from the creation view of entrepreneurial opportunities, it is argued that a promotion focus will be the most effective self‐regulatory mode for entrepreneurs leading their firms within dynamic industry environments, which are characterized by uncertainty. These arguments are tested using a national (United States) random sample of 201 lead entrepreneurs. The findings indicate that in dynamic environments, entrepreneurs' promotion focus is positively associated with venture performance (i.e., lagged measures of revenue and employment growth), while entrepreneurs' prevention focus is negatively related to performance in such environments. In both cases, these effects are found to be fully mediated by deviation from firms' original business concepts. In stable environments, however, no significant relationships between entrepreneurs' promotion or prevention focus and new venture performance were observed. These results suggest that low cognitive fit (a mismatch between entrepreneurs' mode of self‐regulation and the decision‐making context in which they operate) is more damaging in dynamic environments (i.e., a context of uncertainty) than in stable environments (i.e., a context of risk).

This article maintains that the consistent application of subjectivism helps reconcile contemporary entrepreneurship theory with the strategic management literature, particularly the resource‐based view of the firm. The article synthesizes theoretical insights from Austrian economics, Penrose's (1959) resources approach, and modern resource‐based theory, focusing on the essential subjectivity of the entrepreneurial process. This new synthesis describes entrepreneurship as a creative team act in which heterogeneous managerial mental models interact to create and arrange resources to produce a collective output that is creatively superior to individual output.

I provide comments on these articles and then place them in the broader context of the burgeoning literatures on technological collaboration and corporate social responsibility.