Module 1 Resubmission: An Op-Ed “Who Is an Entrepreneur?” Is the Wrong Question, In Search of the Meaning of Entrepreneurship, & What makes Entrepreneurs Entrepreneurial.

Alexis Del Angel

School of Business, Oklahoma State University – Stillwater

EEE 2083: Entrepreneurship & Society

Professor Steve Trost

2.14.2023

Module 1 Resubmission: An Op-Ed “Who Is an Entrepreneur?” Is the Wrong Question, In Search of the Meaning of Entrepreneurship, & What makes Entrepreneurs Entrepreneurial.

This is my opinion piece relating to the three articles assigned to us. Those being “Who Is an Entrepreneur?” Is the wrong question, In Search of the Meaning of Entrepreneurship, & What makes Entrepreneurs Entrepreneurial. Primarily summarizing the sections with opinions placed throughout.

On: “Who Is an Entrepreneur?” is the Wrong Question By William D. Gartner

William establishes that the vast majority of approaches can be distilled down to two. The trait approach and the behavioral approach. The trait approach focuses on what sort of components (in this case characteristics and, well, traits) are within an entrepreneur that makes an entrepreneur. The behavioral approach on the other hand focuses on what are the habits and moment-to-moment behavior (in other words activities) that makes an entrepreneur.

William realizes how different entrepreneurship is to everyone. “Each of us had some notion of it—what we thought was, for his purposes, a useful definition. (Gartner, 1988, p.11 [Cole, 1969, p.17])” As the approach presupposes a sense of once an entrepreneur always an entrepreneur. William then asks, “Is the owner/manager of an ongoing firm two or ten or even fifteen years after startup an entrepreneur? (Gartner, 1988, p. 12)”

I would argue no, a lot of times as we climb and begin to develop our business our challenges, tasks, requirements, and personality most likely will change. Age old lessons exist, yes, but so do dated lessons that have rightfully been thrown out.

I find that this definitional problem within the trait approach only prevents us from going past the surface level. Carland found this out when trying to separate the owner that has not engaged in entrepreneurship within the past ten to fifteen years from the entrepreneur who is a business person establishing and managing businesses for growth and profit. Is that not exactly what the small owner is doing already?

I agree, behavioral approach will serve us better in the future as it takes into consideration the context and organizational creation. At the very least, it allows us to not get bogged down by the semantics and get into what it is that actively creates an “entrepreneurial” success and/or an “entrepreneur.”

On: In Search of the Meaning of Entrepreneurship by Robert F. Hérbet & Albert N. Link

The paper opens up with context of what they define entrepreneur and entrepreneurship within academia, popular entrepreneurial figures, and contemporary writers’ definition. The section following is an overview of what economist believe to be an entrepreneur. Synthesizing an answer in the final section.

The first definition provided is “it [Entrepreneurship] pertains to the actions of a risk taker, a creative venturer in a new business or the ones or revives an existing business. (Hébert & Link, 1988, p. 39)” This definition is typically associated with [speaking from a western globalized perspective] people such as Steve Jobs, Donald Burrs and, I will add, Elon Musk. Typically first-born, males, college-educated in their thirties at the time of the first significant venture. As the paper put it (1988, p. 39), “highly motivated, creative, energetic, and willing to accept risk.” This view coming from the back of a perceived entrepreneurial “decline” at the onset of the 80s (1979).

I would argue that there is a bit of narrowing down what could even have the chance to become an entrepreneur. Does it take someone who has had the birth lottery to become an entrepreneur? I do not believe so.

Hébert and Link (1988, p. 41) go on to list twelve distinct themes in economic literature as another potential definition. They did so because of entrepreneurships dynamic and robust nature making it hard to pin down.

I agree with the list, we do not need to look further than the dawn of the internet to see change and dynamisms in entrepreneurial activities and ventures. Since the age of online sales, for many entrepreneurs the middle man has been cut out, the business model has been adapted, marketing tools and approaches have expanded, etc. If the methodology has completely changed than what it means to be an entrepreneur now is not the same as it was 30 years ago. I believe the dynamic nature of entrepreneurship is something that creates inherent change in the definition of an entrepreneur.

The economist’s point of view opens with Cantillon individualistic view that anyone can be an entrepreneur as it is a function not the personality and ability to distinguish between risk and uncertainty. Subsequently, Schumpeter’s states the entrepreneur as a persona causa of economic development. As the past entrepreneurs created new products from past combinations, this feeds into future entrepreneurs creating new combinations from those very same new-but-past-combinations. Shultz’s provides something different, his biggest changes to model are that entrepreneurial decisions extend outwards onto non-market sectors such as household decisions and allocation of time. Lastly, Kirzner’s theory of entrepreneurship is defined as “an alertness to profit opportunities (1988, p. 46). I think when viewing them as just that, a theory, they are a sound way of approaching something as an entrepreneur and understanding what that means.

The final section is synthesis. It goes over the double-edged sword of realism brings a lack of precision and vice versa. Ending with the reason an entrepreneur is such an important object of economic concern. Its function and character penetrate the very core of economics and raise fundamental questions of economic method that remain unresolved. Reminds of the United States Supreme Court Justice Potter Stewart quote, “I know it when I see it.” (Jacobellis v. Ohio, 1964).

On: What Makes entrepreneurs entrepreneurial? by Saras Sarasvathy

Saras approaches entrepreneurs from a psychological perspective, quickly establishing the question “is there is such a thing as “entrepreneurial thinking” that can be applied across space, time and technology? (Sarasvathy, N.D., p. 2)” Saras found there was an underlying coherent set of logic based on set of principles these founders had that we could call entrepreneurial, in this case, “effectual reasoning.”

I agree with the idea of an underlying way of thinking. If there is a consistent state of mind, or even section of mind, that most successful entrepreneurs have, then it is reasonable to conclude that there must be a way of thinking that we can extrapolate.

She then defines effectual reasoning and its counterparts. Casual rationality begins with a pre-determined goal and a given set of means, and seeks to identify the optimal – fastest, cheapest, most efficient, etc. – method to achieve the given goal. Whereas Effectual is less rigid, it begins with a given set of means and allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the founders.

I believe that the two are cyclical. In order to do a proper casual process, you need a bit of effectual methodology to get started, and vice versa. They both start with market definitions, and both end with customer identification.

Saras states key principles in the effectual process. Those being affordable loss, strategic partnerships, and leveraging contingencies. Affordable Loss principle is predicated on effectual reasoning as it focuses on ways to enter the market with as minimal resource expenditure as possible. Strategic Partnerships principle is the focus on building partnerships over competitive analysis. The Affordable Loss principle spreads the investment and lowers the loss. Lastly, the Leveraging Contingencies principle is exactly as it says, it is looking at the possibilities and using those for your advantage.

Saras ends her essay with an answer to So, what makes entrepreneurs entrepreneurial?

“Entrepreneurs are entrepreneurial, as differentiated from managerial or strategic, because they think effectually; they believe in a yet-to-be-made future that can substantially be shaped by human action; and they realize that to the extent that this human action can control the future, they need not expend energies trying to predict it. (Sarasvathy, n.d., p. 9)”

Conclusion

It was nice to learn of different theories and definitions. My definition to entrepreneur is someone who seizes opportunities and creates/reframes value to their advantage. I believe there is definitely some psychological aspect to being a successful one. There seems to be a common link in successful thinking. Saras theory was the most enlightening and contemporary. I found it really applicable to the day-to-day life.

References

Gartner; W.B. (1988). “Who Is an Entrepreneur?” Is the Wrong Question. American Journal of Small Business, 12 (4), 11-32. https://doi.org/10.1177/1042258788012004

Hébert, Robert F & Link, Albert N. (1989). In Search of the Meaning of Entrepreneurship. Small Business Economics, 1, 39-49.

Sarasvathy, Saras. (2005). What makes entrepreneurs entrepreneurial. Darden Case No. UVA-ENT-0065 SSRN Electric Journal, 1, 1-9. https://doi.org/10.2139/ssrn.909038

Jacobellis v. Ohio, 378 U.S. 197 (1964). https://supreme.justia.com/cases/federal/us/378/184/