Using Ownership as an Incentive

Agency theory is used to develop hypotheses regarding the effects of ownership proliferation on firm performance. The authors examine the effects of chief executive officer (CEO) ownership, executive team ownership, and all employee ownership in addition to the moderating effect of risk on firm survival and stock price. Firms with low CEO ownership outperform those with high levels of CEO ownership across all levels of risk, but the effect is most pronounced for low-risk firms. Executive team ownership is negatively related to firm performance, whereas ownership for all employees is positively associated with firm performance, particularly for higher risk firms.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/67316/2/10.1177_1059601199244003.pd

A fresh look at patterns and assumptions in the field of entrepreneurship: what can we learn?

This article invites scholars to reconsider how the evolution of entrepreneurial phenomena affects the underlying theories employed in our field. We highlight three themes affected by changes to the entrepreneurial journey nowadays in a way that can challenge some foundational research in each area. To that end, we engage in a dual conversation; explicitly revisiting extant theories, as well as deliberately seeking out practice insights on how behaviors and actions are changing. This approach provides fertile ground for future work to re‐examine the theoretical assumptions we often take for granted. Such investigation can either provide fresh evidence of the robustness of extant theory, or create new pathways of inquiry. For entrepreneurship scholars who are dedicated to researching innovation and progress in firms and individuals, this is an exciting time to create innovation and progress in our field

Opportunity or dead end? Rethinking the study of entrepreneurial action without a concept of opportunity

This article has two objectives: to critique the dominant opportunity discovery and creation literatures and to propose a new, critical realist–inspired analytical framework to theorise the causes, processes and consequences of entrepreneurial action – one that needs no concept of opportunity. We offer three reasons to support our critique of opportunity studies. First, there are important absences, contradictions and inconsistencies in definitions of opportunity in theoretical and empirical work that mean the term cannot signal a clear direction for theorising or empirical research. Our central criticism is that the concept of opportunity cannot refer simultaneously, without contradiction, to a social context offering profit-making prospects, to particular practices and to agents’ subjective beliefs or imagined futures. Second, a new definition of opportunity would perpetuate the conceptual chaos. Third, useful concepts to capture important entrepreneurial processes are readily available, for instance, combining resources, creating new ventures and achieving product sales, which render a concept of opportunity superfluous. Instead, we conceptualise entrepreneurial action as investments in resources intended to create new goods and services for market exchange emergent from the interaction between agential, socialstructural and cultural causal powers

Contracting for the unknown and the logic of innovation

This paper discusses the components of contracts adequatefor governing innovation, and their microfoundations in the logic of innovative decision processes. Drawing on models of discovery and design processes, distinctive logical features of innovative decision making are specified and connected to features of contracts that can sustain innovation processes and do not fail under radical uncertainty. It is argued that if new knowledge is to be generated under uncertainty and risk, 'relational contracts', as usually intended, are not enough and a more robust type of contracting is needed and it is actually often used: formal constitutional contracts that associate resources, leave their uses rationally unspecified, but exhaustively specify the assignment of residual decision rights and other property rights, and the decision rules to be followed in governance. The argument is supported by an analysis of a large international database on the governance of multi-party projects in discovery-intensive and design-intensive industries

The dynamics of entry, exit and profitability: an error correction approach for the retail industry

We develop a two equation error correction model to investigate determinants of and dynamic interaction between changes in profits and number of firms in retailing. An explicit distinction is made between the effects of actual competition among incumbants, new firms competition and potential competition from firms outside the market. Effects of cost, demand and general income changes on profitability are investigated to gain insight in the role of retailing in the cost, demand and wage inflationary processes. The relative importance of profitability, growth and unemployment as determinants of net entry are studied. The model is tested using a panel data set of 36 Dutch shoptypes covering the 1977–1988 period

Framing the neoliberal canon: resisting the market myth via literary enquiry

here is widespread recognition that neoliberal rhetoric about ‘free markets’ stands in considerable tension with ‘really existing’ neoliberalizing processes. However, the oft-utilized analytical distinction between ‘pure’ economic and political theory and ‘messy’ empirical developments takes for granted that neoliberalism, at its core, valorizes free markets. In contrast, the paper explores whether neoliberal intellectuals ever made such an argument. Using Friedrich Hayek and Milton Friedman as exemplars, our reading of canonical neoliberal texts focuses on author framing gestures, particular understandings of the term ‘science’, techniques of characterization, and constructions of epistemological legitimacy. This enables us to avoid the trap of assuming that these texts are about free markets and instead enquires into their constitution as literary artefacts. As such, we argue that the remaking of states and households rather than the promotion of free markets is at the core of neoliberalism. Our analysis has significant implications. For example, it means that authoritarian neoliberalism is not a departure from but actually more in line with the ‘pure’ neoliberal canon than in the past. Therefore, neoliberalism ought to be critiqued not for its rhetorical promotion of free markets but instead for seeking to reorganize societies in coercive, non-democratic and unequal ways. This also enables us to acknowledge that households are central to resistance to neoliberalism as well as to the neoliberal worldview itself

The role of intuition in entrepreneurship and business venturing decisions

Entrepreneurial intuition is the affectively charged recognition and evaluation of a business venturing opportunity arising as a result of involuntary, rapid, non-conscious, associative processing. This article integrates theories of dual-processing and models of the business venturing (opportunity recognition, evaluation, and exploitation) in a model of entrepreneurial intuition, which links intuitive expertise, cognitive style, somatic state, and the affect heuristic with System 2 interventions and the contingencies of the decision environment. Six research propositions are offered with suggestions for how they can be tested. The theoretical and practical implications of entrepreneurial intuition are discussed in terms of the unfolding of a research agenda relating to this important but under-theorized and under-researched construct in work and organizational psychology

The Role of Creativity in Entrepreneurship

This paper evaluates the contribution of creativity to entrepreneurship theory and practice in terms of building an holistic and transdisciplinary understanding of its impact. Acknowledgement is made of the subjectivist theory of entrepreneurship which embraces randomness, uncertainty and ambiguity but these factors should then be embedded in wider business and social contexts. The analysis is synthesised into a number of themes, from consideration of its definition, its link with personality and cognitive style, creativity as a process and the use of biography in uncovering data on creative entrepreneurial behaviour. Other relevant areas of discussion include creativity’s link with motivation, actualisation and innovation, as well as the interrogation of entrepreneurial artists as owner/managers. These factors are embedded in a critical evaluation of how creativity contributes to successful entrepreneurship practice. Modelling, measuring and testing entrepreneurial creativity are also considered and the paper includes detailed consideration of several models of creativity in entrepreneurship. Recommendations for future theory and practice are also made