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29 Cards in this Set

  • Front
  • Back

Why is there an absense of the entrepreneur in neoclassical theory?

It's based on equilibrium


No place for the entrepreneur, who is excluded by definition (seeks disequilibrium)




In equilibrium, the entrepreneur has already left

What are unrealistic expectations on entrepreneurial theory?

Formalization and heterogenity


Entrepreneurship is the ultimate "unstandardized" product, cannot be explained by neat formulas (making it difficult for theory construction)

How can investment theory be a step towards formalizing theory on innovation and entrepreneurship?

Similar characteristics


- Unprectability of return


- High risk, uncertain fruitation


- Operating with other people's money

How can mainstream theory of distribution/production be applied to entrepreneurship?

Supply


- Will switch locus of activity to where pay-offs are attractive (recognizing disequilibrium)




Allocation of resources


- Where are the relative rewards?


- Productive vs. Un-productive entrepreneurship


- Activity can be relocated if relative benefits are modified




Pricing / Earnings


- Drawn to temporary monopoly benefits / entrepreneurial profit




Demand


- Problematic; activity is by definition not typically demanded by others


- Can be implicitly "demanded" by low taxes, beneficial regulations etc.

What are the five typologies of innovation (Schumpeter)? -> Capitalist entrepreneurship

- Raw materials


- Production


- Good


- Market


- Organization (of industry)

How does capitalist entrepreneurship differ from general entrepreneurship?

Profit

How can resistance to new order manifest itself?

- Task


- Psyche


- Social environment


(- Norms)

What does entrepreneurship leading to new combinations entail?

Breaking up an existing order




The entrepreneur orients her behavior in a negative way to the old order to make profit

Explain the terms "order", "resistance", "combination", "experimentation", "competing up", "new combination", "entrepreneurial profit", "competition", "competing down" and "new order".

Theory of Capitalist Entrepreneurship

How is capitalist entrepreneurship both economical and social?

Economical --> profit-driven (combination/new combination, breaking up order for gains)




Social --> behavior (order/resistance; experimentation/competition)





What are the entrepreneurial strategies proposed by Drucker?

Fustest of the mostest


- Dominance, leadership, being "most on the ball", all or nothing, no room for mistakes




Hit them where they aint


- Creative imitations - exploiting success of others


- Entrepreneurial judo - exploiting weaknesses of others




Ecological niche


- Monopoly in small area




New combinations


- Changing and adapting characteristics

What are typical mistakes to take advantage of in entrepreneurial judo?

Markets / products not defended


- Not-invented-here arrogance


- Creaming markets


- Premium pricing


- Quality (it is in the eye of the customer)


- Trying to satisfy (maximize) everyone

What are the benefits and risks of creative imitation?

Benefit: market established, the new is accepted, creator has failed to recognize own success




Risk: Creator gets it right first time

What are the entrepreneurial strategies that work (according to Bhide)?

1. Screen out losers


2. Frugal planning and analysis


3. Integrating action and analysis

What might you consider when "screening out losers"?

- Objectives


- External changes


- Competition


- Market


- Risks and rewards


- Adequacy of idea


- Capability to execute


- Passion of entrepreneur



What key factors are important in the frugal planning of the entrepreneur?

- What must go right


- Potential pitfalls


(- Risks and rewards)

What does "evangelical investigation" mean?

Blurring the lines between research and selling

Why should you not plan and analyze too much?

It takes time and money, and you might miss an opportunity

What "entrepreneurial means" does an entrepreneur have?

- Personal traits (who they are)


- Knowledge (what they know)


- Social network (whom they know)

What is the difference between causation and effectuation?

Focus on goals vs. Focus on means

What are the four principles of effectuation?

- Affordable loss


- Alliances


- Exploiting contingencies


- Controllable aspects of unpredicable future

What are key determinants of opportunity recognition?

- Information (asymmetry)


- Prior knowledge


- Entrepreneurial alertness


(- Social networks)

How is disequilibrium connected to information about opportunity ("entrepreneurial discovery")?

- Possibility to better allocate resources


- Only one or few know about it (asymmetry)

Why is price an incomplete indicator of opportunity?

It says nothing about the future potential profit or errors of judgement in the price setting

What is the locus of change in recognizing entrepreneurial opportunity?

--> Typology of innovations




Raw materials; Production; Goods; Market; Organization

What are the sources of opportunity?

- Informtion asymmetry


- Exogenous shocks


- Supply/demand changes


- Changes in productive/unproductive opportunities

Why is the initiator of change of importance?

Because it will affect how people discover opportunity (uni, business, government, entrepreneurs)

Is search or immediate recognition more likely in the entrepreneurial discovery process?

Immediate recognition - you dont know what you are looking for

Why is a decentralized innovation process perhaps more beneficial than a centralized?

Since people with different background and greater diversity have greater chance of identifying different opportunities