Summary of "The promise.."

The phenomenon of entrepreneurship has been missing a conceptual framework. A research was carried out in order to seek the field’s legitimacy. Research was conducted in the difference social science disciplines and applied fields of business to create a conceptual framework for entrepreneurship.

Entrepreneurship has defined solely by most researchers based upon the essence of an entrepreneur and what he does. This definition doesn’t take into consideration the differences of nature what a person might posses. The study of entrepreneurship must include the presence of lucrative opportunities and the presence of an individual who is willing to take risks in creating new business. Entrepreneurship is creating new organizations, but it can also occur within an existing organization.

There are three reasons for studying entrepreneurship. Firstly, via this, society converts technical information into products and services. Entrepreneurship is also a mechanism through which temporal and spatial inefficiencies in an economy are discovered and mitigated. Finally, innovation is driven in products and processes. The absence of entrepreneurship makes our business environment incomplete.

Pursuing an entrepreneurship means having entrepreneurial opportunities. These opportunities mean situations in which new goods, services, raw materials and organizing methods can be introduced and made into a profitable income.

The range of options is wide on this field of study and consequences are unknown, also the entrepreneurial opportunities come in a variety of forms. Drucker (1985) has divided opportunities into three different categories: the creation of new information, the exploitation of market inefficiencies due to inadequate information and the changes of relative costs and benefits of alternative uses for resources. Entrepreneurship requires that people have different beliefs about the value of resources.

An individual can earn entrepreneurial profit if he recognizes that the opportunity exists and it has some value. All opportunities are not obvious. Entrepreneurship brings together different resources in order to produce something new. It would be hard to manage a profitable business if everyone had the same tools. Some people discover them based on some hunch. Research has suggested that there are two broad categories of factors which will dictate how particular opportunities are discovered. There is the possession of the prior information and the cognitive properties necessary to value it. Human possesses different stocks of information which provide a framework for recognizing new information. No two people share all of the same information at the same time.

To recognize an opportunity, an entrepreneur has to have prior information that goes well with the new information, which triggers an entrepreneurial conjecture. Discovering entrepreneurial opportunities isn’t an optimization process, people must be able to identify new means-ends relationships by a given chance to discover an opportunity, but visualizing these relationships is difficult. Successful entrepreneurs see opportunities in situations in which other people tend to see risks.

The discovery of an opportunity is a necessary condition for entrepreneurship, but it is not sufficient. Willingness of people to exploit an opportunity is based on a human’s characteristic. Exploiting an opportunity is more common when expected demand in large or there is a larger profit ahead to compensate the effort or a person has greater financial capital. There are risks involved of creating new products or markets. People are more likely to exploit opportunities if they have useful information for entrepreneurship from their past since knowledge reduces the cost of exploitation. Also, individual differences in optimism affect the decision of exploiting the opportunity. The attributes that increase the probability at opportunity exploitation do not necessarily pave the road to success. For example, an overly optimistic view may lead to a person acting first and analyzing later, because their behavior limits information and motivates rosy forecasts of the future.

 Two major modes of exploitation exist. One is the creation of new firms and the sale of opportunities. Sometimes people within organizations pursue opportunities behalf of their existing organizations. Second and a common presumption is that most entrepreneurial activity occurs through de novo startups. Research shows that de novo startups occur, when an opportunity is uncertain, when opportunities don’t require complementary assets and when opportunities destroy competence.


Entrepreneurship is a field of study, which faces some difficult questions, but it is an important and a relevant subject.