Starting a new venture is an incredibly difficult undertaking. Challenges and roadblocks arise at every juncture. To succeed, entrepreneurs need to persist through these obstacles and fight through hardships. They need personal motivation to drive their ventures forward, and perhaps more importantly, they need to inspire the stakeholders who work with them to continue to support their ventures as well. Entrepreneurial passion is one of the key elements that can catalyze all these processes.
Entrepreneurial passion is experienced through strong emotions and motivations that are intertwined closely with an individual’s entrepreneurial identity. Entrepreneurial passion originates from engagement with self-defining activities over time; entrepreneurs are not born with passion, they develop it. The emerging research surrounding entrepreneurial passion indicates it can have powerful effects, both positive and negative. Regarding the positive, entrepreneurial passion drives beneficial cognitive and behavioral outcomes such as creativity, commitment, and effort. Regarding the negative, entrepreneurial passion can also drive rigidity and burnout. Moreover, research shows that entrepreneurial passion can be contagious; it has the power to infuse stakeholders surrounding entrepreneurs and attract new venture investors to provide early-stage funding.
The construct of team entrepreneurial passion is also discussed. Unlike individual-level passions, team entrepreneurial passion reflects the level of shared intense positive feelings for a collective team identity. Across all the types of passion discussed in this article, the key elements that distinguish entrepreneurial passion as unique and distinct from related psychological constructs, such as motivation, affect, and enthusiasm, are highlighted.
Article
Entrepreneurial Passion
Charles Y. Murnieks and Melissa S. Cardon
Article
Entrepreneurial Teams
Nicola Breugst
Entrepreneurial teams develop and exploit ideas in order to turn them into entrepreneurial ventures that they jointly own and manage. While these teams are crucial drivers for the success of their ventures, their work can be challenging because they operate under conditions of high autonomy, uncertainty, and interdependence. Thus, it is important to understand how entrepreneurial teams work together and jointly advance their ventures. Research has followed three overarching approaches to explore how entrepreneurial teams can succeed in their endeavors. First, one stream of research has aimed at connecting team inputs, such as team members’ experiences, to firm-level outcomes. In a second stream of research, scholars have focused on what happens within entrepreneurial teams in terms of team processes and emergent states. This approach has identified various mechanisms that translate inputs into outcomes. Third, an increasing number of studies have started to unravel the complexities that entrepreneurial teams experience in their work. Specifically, this research has considered the mutual influence of team members and has explored how teams work on their tasks and are shaped by this work. Despite these advancements, entrepreneurial team research faces numerous challenges arising from the complex interplay of team members and their ventures as well as from access to high-quality data. Because of these and other challenges, many research questions around entrepreneurial teams still need to be addressed to better understand their work. These emerging research efforts are likely to be facilitated by additional data sources, such as educational programs devoted to advancing entrepreneurial teams and modern technologies promising better access to rich data. Overall, entrepreneurial team research not only contributes to a more nuanced understanding of the entrepreneurial process but also provides support for these teams as they create and nurture their ventures.
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Entrepreneurship and the Poverty Experience
Michael Morris
Poverty is more than a lack of money or an inability to afford basic necessities. It is an experience that is multidimensional and includes challenges related to literacy, health, food security, housing, transportation, safety, fatigue, underemployment, limited social networks, and limited access to many opportunities available to those in other income categories. Poverty is a pernicious global problem with unacceptably high levels persisting in spite of trillions of dollars of annual spending by governments and other organizations. While this kind of investment represents a critical lifeline to many individuals and families, it is not moving enough of them out of poverty. As a result, there is a need to explore alternative solutions and approaches. Entrepreneurship, or the creation of businesses, by those experiencing poverty is one potential pathway to a better life. Yet it is a pathway about which we understand relatively little. While the poverty–entrepreneurship interface has received growing attention from scholars over the past few years, very little theoretical or conceptual work has been done. More critically, there is scant empirical evidence on such basic questions as the rate of business creation by those in poverty, success and sustainability rates, key success factors, the role of institutions and entrepreneurial ecosystems in venture outcomes, and much more. The unique difficulties faced by these entrepreneurs can be captured through the liability of poorness, a concept which includes gaps in five types of literacy, a scarcity or short-term orientation, severe nonbusiness distractions, and the lack of any safety net. As a result, the ventures that are created tend to be survival businesses that are labor intensive, with low margins, little differentiation, no bargaining power with suppliers or customers, lack of equipment and technology, and limited capacity. These are fragile enterprises, suggesting the priority may not simply be fostering higher levels of start-up activity among the poor, but interventions that enable them to become sustainable. A beginning point in realizing the potential of entrepreneurship as a poverty alleviation tool is the development of new insights on expanding opportunity horizons of these individuals, helping them escape the commodity trap, rethinking resourcing and microcredit, and assisting with adoption of the entrepreneurial mindset.
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The Evolution of the Entrepreneurial Orientation (EO) Construct: Dominant Research Questions and Conversational Shifts
Patrick Kreiser, Jeffrey G. Covin, Matthew J. Fox, Ignacio Godinez Puebla, and Shawn Enriques
Entrepreneurial orientation (EO) has become a central construct in the management and entrepreneurship literature over the past several decades. Specific questions and associated themes have dominated EO research over the years, with the research itself exhibiting a number of conversational shifts prompted by the publication of seminal articles. The period 1973–1982 is the EO Construct Pre-emergence Era. During this time, scholars began to allude to the possibility that firms themselves—rather than only individuals—could act in entrepreneurial manners. What constitutes an entrepreneurial firm, wherein entrepreneurship might be seen as a central attribute of the firm, was yet to be clearly specified.
The period 1983–1995 is the EO Construct Introduction and Legitimization Era. This era was prompted by the publication of an article by Danny Miller in which he introduced EO as a unidimensional construct composed of three overlapping dimensions: risk taking, innovativeness, and proactiveness. Dominant research questions of the era include: How is entrepreneurship manifested as an attribute of firms, independent of firm size and age? and What do entrepreneurial firms have in common?
The period 1996–2010 was the EO Construct Critical Examination and Debate Era. This era was launched by an article by Tom Lumpkin and Greg Dess in which they observed that two additional dimensions to EO might be considered—namely, competitive aggressiveness and autonomy—and that EO might, alternatively, be represented by a firm’s profile across these five dimensions. Common research questions of the era include: How can entrepreneurial firms be different? Does EO look the same in different institutional and environmental contexts? Are there attributes that must be present in order to label a firm “entrepreneurial”? Is there a most appropriate way to conceive of EO’s dimensionality? and Does EO predict firm performance?
The period 2011–2022 is the EO Construct Expansion and Specialization Era. This era began with the publication of an article by Jeff Covin and Tom Lumpkin in which they recognized differences between proposed conceptualizations of EO and suggested that future research explore both dominant EO conceptualizations, that is, the unidimensional and the multidimensional conceptualization of the construct. Research questions of the era include: Is it appropriate to consider different constructs using the label EO? What are the various forms and indicators of EO? How can EO be measured using nontraditional methods? Should the EO construct be extended to other levels of analysis? What are the antecedents to EO? and What are some of the non-performance-based outcomes of EO?
As scholars addressed the prominent research questions of the day, intellectual building blocks have been established and promising domains of future research have been recognized. In general, the observed knowledge expansion that began with an emphasis on EO’s meaning and measurement now includes, for example, greater emphasis on EO’s nomological network, forms and manifestations, antecedents and outcomes, and applicable contexts and theories.
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External Corporate Governance Mechanisms: Linking Forces to Behaviors
G. Tyge Payne and Curt Moore
Corporate governance research has a long and varied history, having evolved from a broad number of scholarly disciplines, including sociology, law, finance, and management. Across these various disciplines, it is maintained that governance is essential to corporate success, as it provides strategic and ethical guidance to the company. While research has largely focused on internal mechanisms through which governance is enacted (such as ownership arrangements, board structures, managerial rewards and incentives, etc.), external forces and mechanisms are increasingly important to modern businesses. External corporate governance mechanisms emanate from outside the organization and support forces that promote governance structures, processes, and practices by top executives and board directors. Institutions, industries, markets, networks, and strong individual external stakeholders all work to influence corporate governance decisions and behaviors both directly and indirectly. The external forces induce mechanisms that influence desirable behaviors or intervene when internal mechanisms are compromised or ineffective.
Recent literature on external governance mechanisms can help scholars and practitioners develop a better understanding of this important area of inquiry, and future research should consider three broad suggestions to move the field forward: differentiating between forces and mechanisms; recognizing unique stakeholders, boundaries, and levels of analysis; and improving empirical designs to better recognize and understand what factors matter in instituting governance adjustments and behavior changes.
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External Enablers of Entrepreneurship
Per Davidsson, Jan Recker, and Frederik von Briel
“External enabler” (EE) denotes nontrivial changes to the business environment—such as new technology, regulatory change, demographic and sociocultural trends, macroeconomic swings, and changes to the natural environment—that enable entrepreneurial pursuits. The EE framework was developed to increase knowledge accumulation in entrepreneurship and strategy research regarding the influence of environmental factors on entrepreneurial endeavors. The framework provides detailed structure and carefully defined terminology to describe, analyze, and explain the influence of changes in the business environment on entrepreneurial pursuits. EE characteristics specify the environmental changes’ range of impact in terms of spatial, sectoral, sociocultural, and temporal scope as well as the degree of suddenness and predictability of their onset. EE mechanisms specify the types of benefits individual ventures may derive from EEs. Among others, these include cost saving, resource provision, making possible new or improved products/services, and demand expansion. EE roles situate these (anticipated) mechanisms in entrepreneurial processes as triggering and/or shaping and/or outcome-enhancing. EE’s influence is conceived of as mediated by entrepreneurial agency that—in addition to agent characteristics—is contingent on the opacity (difficulty to identify) and agency-intensity (difficulty to exploit) of EE mechanisms, with the ensuing enablement being variously fortuitous or resulting from strategic deliberation.
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Familization of Lone-Founder Firms: Highlights from Asian Firms
Yijie Min, Yanlong Zhang, and Sun Hyun Park
Family firms can either be “born” or “made.” Although previous studies suggest that most of the family firms in the US context are “born,” family firms can be “made” by the founder’s decision to invite family members to the management. We conceptualize this process of family firm emergence as familization, during which lone-founders’ family influence increases as more family members are appointed to director and/or executive positions. Transition from lone-founder-control to family-control is often accompanied by significant changes in governance structure, strategic decisions, and firm performance. This work documents the pervasiveness and heterogeneity of the familization process and proposes an analytical framework covering four research areas associated with the phenomenon: the antecedents that motivate founders to choose the familization path, the familization process involving internal and external firm constituents, the consequences of familization decision, and the potential moderators of the familization impact. To better understand these theoretical perspectives, an explorative empirical investigation is conducted based on a sample of Chinese-listed firms that experienced familization. Familization cases in other Asian emerging economies were also discussed in comparison with the family firms in Western economies.
Article
Family Business
Frank Hoy
Family business is a multidisciplinary subject area of critical importance to practitioners. The global volume of family business owners and managers is enormous. The firms are significant components of national economies. Yet they are often underappreciated and have been under-represented in business and economic research. Scholars have the potential for contributing to the survival and prosperity of these firms. The boundaries of the field are ill-defined. Family business scholars are seeking recognition from their colleagues. Opportunities for future research are unlimited.
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For-Purpose Enterprises and Hybrid Organizational Forms: Implications for Governance and Strategy
Marco S. Giarratana and Martina Pasquini
A company’s social purpose has become a key factor that should be considered in organizational design and strategic decision-making. For-purpose enterprises are for-profit, financially self-sustained organizations that embed a social aim as one of their main objectives. Companies that simultaneously must envisage a double purpose, namely, social and competitive, face an even greater complexity, that is, a likely risk of internal logics’ tensions and structural drifts.
Scholars have proposed different theoretical and operative frameworks; on the one hand, they describe ad hoc business models to foster synergies between the social impact and economic and competitive-oriented actions. On the other hand, they also try to focus on an organization’s governance, suggesting incentive schemes and organizational designs that could smooth trade-offs and tensions, which could jeopardize a company’s viability. Following scholars have differentiated two clusters of studies: (a) instrumental–strategic–economic stream and (b) injunctive–social–behavioral.
The first approach perceives as critical the balance between social-oriented aims and profit with a viable business model. Under this perspective, the concept of synergies between the two aims is critical. Its mainstream framework is the stakeholder theory approach while recent approaches, rooted especially in marketing and strategic human capital studies, bring to the central stage how corporate social responsible actions develop social identity processes with focal stakeholders, which are responsible for reciprocity behaviors. These different perspectives, although complementary, could imply significant differences for the organization design, product strategy, and the role and power of the chief sustainability officer as well as allocation of resources and capabilities.
The second group of studies—injunctive–social–behavioral—is focused on understanding how to maintain active social aims under economic and competitive constrains. These works are particularly focused in investigating the intrinsic motivations of doing good and the type of tensions that could arise in organizations with a social mission. The works analyze the potential drifts, risks, and solutions that could mitigate tension and trade-offs. In this stream, the first line of work is related to social entrepreneurship, especially in developing countries, while the second is more focused on human-resource incentive schemes and organizational designs that preserve a company’s social goals under economic constrains.
Article
From Instrumental Stakeholder Theory to Stakeholder Capitalism
André O. Laplume
Instrumental stakeholder theory posits that managing for stakeholders using justice-based approaches produces competitive advantage for firms. However, achieving the ideals of stakeholder management may be challenging, and for some firms, unrewarding. Yet, when firms fail to manage for stakeholders, they contribute to stakeholder marginalization, a condition in which stakeholders feel unfairly treated and begin to scan for alternative arrangements with other firms. Stakeholder marginalization creates opportunities for competitors, but especially for new entrants, to pursue stakeholder innovation. Stakeholder innovation involves the creation of a business model that caters to marginalized stakeholder groups in a new way, by improving perceived conditions for those stakeholders (e.g., customers, employees, suppliers, or communities). Stakeholder innovations can threaten incumbencies as their ecosystems bloom and technologies improve, and they can start to draw a greater variety of resources away from incumbent networks. Because it can help to explain and predict both incumbent and new entrant behaviors, stakeholder capitalism is a useful frame for theorizing in the disciplines of management and entrepreneurship.
Article
Frugality in Emerging Organizations: A Psychological Perspective of Resourcefulness in Entrepreneurship Contexts
Timothy L. Michaelis, Jeffrey M. Pollack, and Jon C. Carr
The act of being resourceful is a commonly displayed behavior in the process of entrepreneurship. For example, entrepreneurs are known to share resources with competitors, utilize their social networks to attract capital, exchange favors for resources, engage in resource bootstrapping behaviors, repurpose and/or recombine existing resources for new purposes (i.e., bricolage), and sometimes pivot from one opportunity to another following available resource options given current situational constraints (i.e., effectuation). Currently, research on the topic of resourcefulness in the entrepreneurship literature assumes these aforementioned resourceful behaviors are attributed to a limited resource environment rather than also originating from within the entrepreneur. Frugality is a new concept in the field of entrepreneurship that suggests entrepreneurs will also enact resourceful behaviors because of their own self-regulatory processes; that is, entrepreneurs will engage in resourcefulness behaviors as a preference rather than as a forced reaction to their external resource environment. Thus, frugality represents an individual-level antecedent of resourcefulness behaviors that is not bound to the conditions of necessity-based entrepreneurship. This is important as frugality opens the door for numerous future research directions in the context of both necessity-based and opportunity-based entrepreneurship. Frugality is defined as one’s general preference to (a) conserve resources and (b) apply an economic rationale in the acquisition of resources (i.e., assessing the opportunity cost of newly acquired resources). Research in the consumer behavior literature highlights that frugality is a culturally driven trait preference, whereby one is willing to sacrifice in the short term to achieve longer-term, idiosyncratic goals. Despite a large amount of research on frugal consumer behavior, there has yet to be a systematic inquiry into how frugality more broadly influences the process of new venture creation and organizations. Empirical research highlights that frugal entrepreneurs tend to engage in higher amounts of bricolage and effectuation, thus representing a promising new topic for better understanding the process of entrepreneurship. Although it is expected that future inquiry regarding frugality in entrepreneurship will naturally orient toward the topic of resourcefulness, it is also expected that frugality will relate to numerous other important topics such as entrepreneurial well-being, opportunity recognition, opportunity exploitation, and new venture growth. Considering the novelty of frugality in entrepreneurship, and management literature generally, it would benefit future research to systematically explore both the upsides and downsides to being frugal as it relates to value creation activities.
Article
Global Entrepreneurship Monitor (GEM) Program: Development, Focus, and Impact
Paul D. Reynolds
In the late 1990s, there was considerable interest in national differences in entrepreneurial activity. The Global Entrepreneurship Monitor (GEM) research program was developed to provide harmonized, cross-national measures of participation in business creation; business creation was considered a critical aspect of entrepreneurship. This information was considered important for understanding the national characteristics associated with business creation and its subsequent impact on economic growth. The initial effort involved 10 countries in 1999. By 2014 Adult Population Surveys (APS) had been completed 705 times in 104 countries and with six special samples; this involved 2.3 million individual interviews. While there have been changes in the administrative structure and the focus of the annual global reports, the most significant data collection procedures have been stable since 2002. The GEM APS data sets are currently the only harmonized cross-national comparisons of business creation and business ownership. Designed to provide estimates of the prevalence of both business creation and existing firms, they also allow estimates of the total number of business ventures. GEM data sets are publically available three years after completion, providing a unique resource for assessing factors affecting business creation and its subsequent role in economic growth. Systematic assessments by national experts in participating countries provide measures of the national entrepreneurial framework conditions, complementing a variety of established measures of national economic and political characteristics.
There are three distinct features that characterize the GEM initiative: the unique organizational structure, the global reports summarizing annual assessments of entrepreneurial activity, and data sets assembled and made available for public use. The initial organizational structure, a collaborative arrangement among national teams, was replaced by membership in the Global Entrepreneurship Research Association (GERA) in 2004. The annual global reports emphasize comparisons among member countries, the annual national reports the country-specific situations. Both are designed to facilitate reality-based public policy.
Data collection for the APS provides harmonized comparisons of business creation across countries and within-country time series. The APS data has made clear the substantial variation among countries, by a factor of 10; that national levels of participation are very stable over time; that business creation is much more prevalent in poorer countries; that all segments of society are active in business creation; and that business creation is an important catalyst for the processes that lead to economic growth. The National Expert Survey (NES) questionnaire data provides information about the nature of the entrepreneurial framework in the GEN countries.
There is much to be learned about the relationships between national context, entrepreneurship, and economic growth. The unique information in the GEM data sets should continue to facilitate improved understanding of this important phenomenon.
Article
The Governance Roles of Private Equity
Sophie Manigart, Miguel Meuleman, and Tom Beernaert
Private equity (PE) investors enhance the governance of portfolio companies by installing high-powered boards, structuring the senior management team, installing reward and performance management systems, and advising the portfolio company. The aim is to reduce agency risks and to increase shareholder value. A growing body of literature investigates the real effects of PE buyouts on their portfolio companies. Empirical evidence suggest that PE buyouts do not consider efficiency improvements as their main value-creating strategy, but PE enhances growth rather than efficiency. Researchers’ understanding of PE’s entrepreneurial growth approach to increase shareholder value is limited to date, although it is known that PE portfolio companies are active innovators and that PE portfolio companies extensively engage in acquisitive growth.
Financial performance of PE investors can also be driven by transferring value from other stakeholders to the portfolio company after buyout. Does PE buyout’s shareholder value creation come at the expense of other stakeholders, such as employees or customers, or do they also benefit? PE’s impact on employment and wages in portfolio companies has received considerable attention. The effect depends on the institutional setting and macroeconomic conditions and differs across PE groups and by type of buyout. PE buyouts do improve employees’ safety, well-being, and human capital. Research on the impact of PE on stakeholders other than employees is limited. Industry-specific studies uncovered fine-grained actions and mainly negative effects on various stakeholders beyond shareholders and employees. This highlights the tension between enhancing shareholder value at the expense of stakeholder value. Given the continuous development of practices in the PE industry, the governance roles of PE will remain a fertile ground for academic research.
Article
Immigrant Entrepreneurship: A Typology Based on Historical and Contemporary Evidence
Hartmut Berghoff
Immigrant entrepreneurs are different, and they are everywhere. They can be unambiguously distinguished from entrepreneurs without a migration background. They operate under distinct conditions and respond to unique opportunities and challenges. They have specific motivational, economic, and social resources at their disposal, for example, ethnic solidarity and international networks. Their knowledge of languages and cultures, as well as the high pressure to integrate themselves into a new society, can be factors that stimulate entrepreneurship and innovation. It is hard to find countries with no immigrant entrepreneurs. In many places like the United States, Canada, or South East Asia, they play a substantial economic role.
The ubiquity, dynamism, and significance of immigrant entrepreneurs has led to a spate of research projects since the 1990s, especially by economic sociologists and ethnologists, but also by management scholars and historians. On the basis of their work, the article distinguishes six different ideal types of immigrant entrepreneurs, even though these categories are neither clear-cut nor mutually exclusive.
Necessity entrepreneurs react to blocked careers in other areas and often set up small, precarious businesses, out of which in exceptional cases more viable companies emerge. Diaspora merchants are part of commercial networks of people with the same ethnic background who live in foreign countries and trade with each other. Transnational entrepreneurs are not necessarily part of networks and do not always engage in mercantile activities. This category also encompasses individual actors and industrial activities. They are characterized by the ability to mobilize resources in several countries and facilitate activities between different countries. Middleman minorities stand between the majority society and third parties, often minorities. They fill niches that are left by indigenous businesses, which consider these areas as unattractive. Entrepreneurs in ethnic enclave economies live and work with their co-ethnics in neighborhoods defined by their group. Their main function is to cater to their own communities, often with ethnic products such as food or publications from their countries of origin. Refugee entrepreneurs leave their home country involuntarily, often driven out by violence and expropriation. In most cases their emigration is unprepared. Starting conditions in the country of destination are unfavorable. Conversely, the pressure for social integration is pronounced and can act as an impulse for self-employment. There are, however, cases in which refugees are consciously patronized or even summoned by the governments of the receiving countries, turning them into a highly privileged group.
Article
Infrastructure for Entrepreneurship
Jennifer Woolley
Entrepreneurship is a critical driver of economic health, industrial rejuvenation, social change, and technological progress. In an attempt to determine how to best support such an important component of society, researchers and practitioners alike continue to ask why some countries, regions, and cities have more entrepreneurship than others. Unfortunately, the answer is not clear. This question is addressed by focusing on location-based support or infrastructure for entrepreneurship. A framework based on a social systems perspective guides this examination by concentrating on three main categories of infrastructure: resource endowments, institutional arrangements, and proprietary functions. Work from the knowledge-based perspective of entrepreneurship, systems of innovation, entrepreneurial ecosystems, and resource dependence literatures is integrated into this framework.
Article
Innovation and Business Models
Lorenzo Massa and Christopher L. Tucci
Starting from the mid-1990s, business models have received increased attention from both academics and practitioners. At a general level, a business model refers to the core logic that a firm or other type of organization employs to achieve its goals. Thus, in general terms, the business model construct attempts to capture the way organizations “do business” or operate to create, deliver, and capture value. Business model innovation (BMI) constitutes a unique dimension of innovation, different from and complementary to other dimensions of innovation, such as product/service, process, or organizational innovation. This distinction is important in that different dimensions of innovation have different antecedents, different processes, and, eventually, different outcomes.
Business models have been the subject of extensive research, giving birth to several lines of inquiry. Among them, one line focuses on business models in relation to innovation. This is a vast, somewhat fragmented, and evolving line of inquiry. Despite this limitation, it is possible to recognize that, at the core, business models are relevant to innovation in at least two main ways. First, business models can act as vehicles for the diffusion of innovation by bridging inventions, innovative technologies, and ideas to (often distant) markets and application domains. Therefore, business models speak to the phenomenon of technology transfer from the point of view of academic entrepreneurship and of corporate innovation. Thus, an important role of the business model in relation to innovation is to support the diffusion and adoption of new technologies and scientific discoveries by bridging them with the realization of economic output in markets. This is a considerable endeavor that relies on a complex process entailing the search for, and recombination of, complementary knowledge and capabilities. Second, business models are a subject of innovation that can become a source of innovation in and of themselves. For example, offerings that reinvent value to the customer—as opposed to offerings that incrementally add value to existing offerings—often involve designing novel business models. Relatedly, BMI refers to both a process (i.e., the dynamics involved in innovating business models) as well as the output of that process.
In relation to BMI as a process, the literature has suggested distinguishing between business model reconfiguration (BMR; i.e., the reconfiguration of an existing business model), and business model design (BMD; i.e., the design of a new business model from scratch). This distinction allows us to identify three possible instances, namely general BMR in incumbent firms, BMD in incumbent firms, and BMD in newly formed organizations and startups. These are arguably different phenomena involving different processes as well as different moderators. BMR could be understood as an evolutionary process occurring because of changes in activities and adjustments within an existing configuration. BMD involves facing considerable uncertainty, thus putting a premium on discovery-driven approaches that emphasize experimentation and learning and a considerable degree of knowledge search and recombination.
Article
Innovation Ecosystems in Management: An Organizing Typology
Llewellyn D. W. Thomas and Erkko Autio
The concept of an “ecosystem” is increasingly used in management and business to describe collectives of heterogeneous, yet complementary organizations who jointly create some kind of system-level output, analogous to an “ecosystem service” delivered by natural ecosystems, which extends beyond the outputs and activities of any individual participant of the ecosystem. Due to its attractiveness and elasticity, the ecosystem concept has been applied to a wide range of phenomena by a variety of scholarly perspectives and under varying monikers such as “innovation ecosystems,” “business ecosystems,” “technology ecosystems,” “platform ecosystems,” “entrepreneurial ecosystems,” and “knowledge ecosystems.” This conceptual and application heterogeneity has contributed to conceptual and terminological confusion, which threatens to undermine the utility of the concept in supporting cumulative insight.
In this article, we seek to reintroduce some order into this conceptual heterogeneity by reviewing how the ecosystem concept has been applied to variably overlapping phenomena and by highlighting key terminological and conceptual inconsistencies and their sources. We find that conceptual inconsistency in the ecosystem terminology relates to two key dimensions: the “unit” of analysis and the type of “ecosystem service”—that is the ecosystem output collectively generated. We then argue that although there is considerable heterogeneity in application, the concept nevertheless offers promise in its potential to support insights that are distinctive relative to other concepts describing collectives of organizations, such as those of “industry,” “supply chain,” “cluster,” and “network.” We also find that despite such proliferation, the concept nevertheless describes collectives that are distinctive in that they uniquely combine participant heterogeneity, coherence of ecosystem outputs, participant interdependence, and nonhierarchical governance.
Based on our identified dimensions of conceptual heterogeneity, we offer a typology of the different ecosystem concepts, thereby helping reorganize this proliferating domain. The typology is based upon three distinct ecosystem outputs—ecosystem-level value offering for a defined audience, the collective generation of business model innovation, and the collective generation of research-based knowledge—and three research emphases that resonate with alternative “units” of analysis—community dynamics, output cogeneration, and interdependence management. Together, these allow us to clearly differentiate between the concepts of innovation ecosystems, business ecosystems, platform ecosystems, technology ecosystems, entrepreneurial ecosystems, and knowledge ecosystems. Based on the three distinct types of ecosystem outputs, our typology identifies three major types of ecosystems: innovation ecosystems, entrepreneurial ecosystems, and knowledge ecosystems. Under the rubric of “innovation ecosystems,” we further distinguish between business ecosystems, modular ecosystems, and platform ecosystems. We conclude by considering innovation ecosystem dynamics, highlighting the important role of digitalization, and reviewing the implications of our model for ecosystem emergence, competition, coevolution, and resilience.
Article
Innovation in Artificial Intelligence: Illustrations in Academia, Apparel, and the Arts
Andreas Kaplan
Artificial intelligence (AI), commonly defined as “a system’s ability to correctly interpret external data, to learn from such data, and to use those learnings to achieve specific goals and tasks through flexible adaptation,” can be classified into analytical, human-inspired, and humanized AI depending upon its application of cognitive, emotional, and social intelligence. AI’s foundations took place in the 1950s. A sequence of vicissitudes of funding, interest in, and support for AI followed subsequently. In 2015 AlphaGo, Google’s AI-driven system, won against the human grandmaster in the highly complex board game Go. This is considered one of the most significant milestones in the development of AI and marks the starting of a new period, enabling several AI innovations in a variety of sectors and industries.
Higher education, the fashion industry, and the arts serve as illustrations of areas wherein ample innovation based on AI occurs. Using these domains, various angles of innovation in AI can be presented and decrypted. AI innovation in higher education, for example, indicates that at some point, AI-powered robots might take over the role of human teachers. For the moment, however, AI in academia is solely used to support human beings, not to replace them. The apparel industry, specifically fast fashion—one of the planet’s biggest polluters—shows how innovation in AI can help the sector move toward sustainability and eco-responsibility through, among other ways, improved forecasting, increased customer satisfaction, and more efficient supply chain management. An analysis of AI-driven novelty in the arts, notably in museums, shows that developing highly innovative, AI-based solutions might be a necessity for the survival of a strongly declining cultural sector.
These examples all show the role AI already plays in these sectors and its likely importance in their respective futures. While AI applications imply many improvements for academia, the apparel industry, and the arts, it should come as no surprise that it also has several drawbacks. Enforcing laws and regulations concerning AI is critical in order to avoid its adverse effects. Ethics and the ethical behavior of managers and leaders in various sectors and industries is likewise crucial. Education will play an additional significant role in helping AI positively influence economies and societies worldwide. Finally, international entente (i.e., the cooperation of the world’s biggest economies and nations) must take place to ensure AI’s benefit to humanity and civilization. Therefore, these challenges and areas (i.e., enforcement, ethics, education, and entente) can be summarized as the four summons of AI.
Article
Innovation in Family Business
Alfredo De Massis, Emanuela Rondi, and Samuel Wayne Appleton
The involvement of families in firms’ ownership, management, and governance is a key driver of organizational attitudes, behaviors, and performances, especially those related to innovation. Starting from the beginning of the 21st century, the academic interest toward family firm innovation has bloomed. This body of research has mostly emerged from family firm scholars, while mainstream innovation scholars have often overlooked family variables in their studies. Indeed, innovation is one of the main areas in family firm research, integrating family and business aspects, leading to a plethora of sometimes contradictory findings. Initially, research compared innovation between family and nonfamily firms. While this approach has been beneficial to the rise of this stream of research and underlined the idiosyncratic characteristics of family firms on this matter, it soon emerged that within family firms there is a high degree of heterogeneity, especially in their attributes and the way they relate to innovation. Therefore, scholars have delved deeper into the heterogeneous influence that different types and degrees of family involvement in the firm can exert on innovation. This vast body of literature can be reconciled according to an antecedents–activities–outcomes framework allowing to attune current understanding of family firm innovation and recommend directions for future research. While most of current research has examined the antecedents of family business innovation, further examination of the activity of innovating in family firms is needed. Fostering accessibility to this literature allows students, practitioners, and scholars to grasp and digest this insightful area of family business research. It also encourages an extension of the range of perspectives adopted to examine innovation in family firms, contributing to advance current knowledge.
Article
Institutional Logics
Heather A. Haveman and Gillian Gualtieri
Research on institutional logics surveys systems of cultural elements (values, beliefs, and normative expectations) by which people, groups, and organizations make sense of and evaluate their everyday activities, and organize those activities in time and space. Although there were scattered mentions of this concept before 1990, this literature really began with the 1991 publication of a theory piece by Roger Friedland and Robert Alford. Since that time, it has become a large and diverse area of organizational research. Several books and thousands of papers and book chapters have been published on this topic, addressing institutional logics in sites as different as climate change proceedings of the United Nations, local banks in the United States, and business groups in Taiwan. Several intellectual precursors to institutional logics provide a detailed explanation of the concept and the theory surrounding it. These literatures developed over time within the broader framework of theory and empirical work in sociology, political science, and anthropology. Papers published in ten major sociology and management journals in the United States and Europe (between 1990 and 2015) provide analysis and help to identify trends in theoretical development and empirical findings. Evaluting these trends suggest three gentle corrections and potentially useful extensions to the literature help to guide future research: (1) limiting the definition of institutional logic to cultural-cognitive phenomena, rather than including material phenomena; (2) recognizing both “cold” (purely rational) cognition and “hot” (emotion-laden) cognition; and (3) developing and testing a theory (or multiple related theories), meaning a logically interconnected set of propositions concerning a delimited set of social phenomena, derived from assumptions about essential facts (axioms), that details causal mechanisms and yields empirically testable (falsifiable) hypotheses, by being more consistent about how we use concepts in theoretical statements; assessing the reliability and validity of our empirical measures; and conducting meta-analyses of the many inductive studies that have been published, to develop deductive theories.
