Knowledge that Transforms

Russell Vernon, a second-generation owner and manager of West Point Market in Akron, Ohio, must decide whether to settle, go to court, or reconcile (mutually agreeable solution) with the Equal Employment Opportunity Commission on an allegation of racial discrimination. He firmly believes that he is innocent. If he chooses to reconcile or settle the case out of court, he could be construed as a racist. If he chooses to go to court and loses, he may lose his family business. This emotionally charged situation is presented as a management decision that must be based on an analysis of the facts. The case is especially interesting due to the perceptions that students have of “the role of governmental agencies” and “the use of racial-based quotas in the workforce.”

This study compares the different learning strategies of 283 nascent entrepreneurs and intrapreneurs. Data come from a longitudinal study of the Swedish population. Using a typology of organizational learning systems, four different strategies were examined along with other human capital variables. Different learning strategies were shown to be used by entrepreneurs versus intrapreneurs.

In 1988, Murray Low and Ian MacMillan published a review of developments in entrepreneurship research and identified challenges for the future (Low and MacMillan, 1988). Since the appearance of their paper, there has been an explosion of entrepreneurship research. This Special Issue had its genesis a decade after the appearance of the Low and MacMillan article, when nineteen scholars from nine countries were invited to two workshops held at the Jönköping International Business School (JIBS) in Sweden in the fall of 1998. The purpose of the workshops was, and the purpose of this Special Issue is, to take stock of the developments of the past decade and to identify directions for future research.

The odds of forming a profitable venture are a critical issue for those weighing the risk of business entry. However, few measures exist to help potential business owners assess their chances of forming a financially successful enterprise. This research examines the probability of financial success from business ownership In terms of (1) profit, break-even, or loss during the owner's tenure, and (2) sufficient profit or loss between firm formation and termination to alter the owner's personal financial condition. The analyses rely on reports from a sample of 783 business owners who recently terminated their firms. Results indicate that 50% more small business owners operate a profitable venture during the marriage of owner and business than operate an unprofitable one. Just 17% form profitable ventures that improve the owner's overall financial standing, while 6% form unprofitable ventures that negatively affect it.

This research proposes that qualities of founding resources can account for differences in subsequent resource-based actions. Our analysis of 67 computer and telecommunications firms shows that the innovativeness of a firm's founding technology resources is associated with the decision to build patent portfolios, but not the importance of these portfolios, and with the decision to form alliances and the rate of alliance formation. Our findings suggest that initial technologies provide a foundation for a firm's subsequent technology-based actions and, more importantly, that the qualities of these resources play a key role in these actions.

Venture capitalists realize returns on their investments when their portfolio companies either go public (IPO) or are acquired by a publicly traded company. Finance theory implies that the sooner a particular return can be realized the higher the “real” return to the investor. We use an ecosystem perspective to investigate speed to initial Public Offering. Findings indicate that geography of the portfolio company matters, that non high-tech portfolio companies go public faster than do those in the computer-related sector, and that speed is increased with the recent favorable IPO market but not at the same rate for all regions.

This paper reports the results of a 16-country study into the attitudes of owner-managers to both business and family decisions. Three clusters of attitudes emerged—those who wished to involve their family, those who wished to strike a balance, and those who wished to exclude the family. The paper concludes that there is a set of attitudes towards the family and the business that consistently combine to divide owner-managers. This research highlights the need to examine this perspective and to explore further how it may vary across countries.

This research partially tests a model of entrepreneurial cognition among small business owners In the transition economy of China. Addressing these issues helps to answer questions about how entrepreneurs create, sustain, and transform organizations. The Influence of social context, personal factors, and cognition of Chinese entrepreneurs on their growth intentions and their method of expansion were examined. Based on a sample of 2,878 Chinese small private business owners, we not only found that an entrepreneur's commitment, need for achievement, and social environment is important, but that a cognitive understanding of the environment also has a direct impact on growth intentions.

Principles from theories of social attribution are used to devise a coding scheme for responses to an open-ended question (Why do you want to start this business?) asked of nascent entrepreneurs In the Panel Study of Entrepreneurial Dynamics (PSED). In the attributional framework used, explanations that involve causes located internal to the person are distinguished from explanations that involve causes external to the person. Second, within the internal/external categories, causes that are presumed to be relatively stable are distinguished from causes that are presumed to be more easily variable. This paper outlines the theoretical arguments that underlie the attributional framework's four-fold classification of answers, describes the issues that arise in the process of coding the respondents' answers, and presents two sets of items (complete with their attributional codings) that can be used to make specific identifications of attributions from the open-ended responses. The attributional framework is compared to more traditional qualitative methods for evaluating the open-ended responses of nascent entrepreneurs. Proposals are made for using the open-ended responses from nascent entrepreneurs In other ways. Suggestions are offered for how the results of the attributional coding scheme might be used in future research.