This article reviews literature on the study of the cognition of entrepreneurs, and how this affects their attitudes to risk. The review begins with the heuristics and biases approach. Various decision-making biases related to over-optimism are then considered. Following this perceived self-efficacy, intrinsic motivation and intentions-based models are discussed. Some theories dealing specifically with attitudes to risk are then covered. These include prospect theory, Kahneman and Lovalo's model of risk-taking, and Das and Teng's theory of risk horizons and future orientations. Finally, the option value and information cost approach to the analysis of entrepreneurs' decision-making is discussed. Some relevant references to culture research are also given in the conclusion.
Carole Howorth, Mary Rose, and Eleanor Hamilton
This article begins with an examination of definitions of family firms. The debate about what constitutes a family firm is every bit as complex as the definition of an entrepreneur. This article explores the range of definitions but shows that any definition needs to be interpreted in its economic, social, institutional, and cultural context. An explanation for the multiplicity of definitions is provided in in this article, which explores the diversity in scale, scope, organization, and longevity of family firms, and shows differences through time in different societies and between families. The article also demonstrates the strong path dependency of family firm development, with change (or lack of it) underpinned by the foundations of the past. The article further explores research which compares the performance of family firms with non-family firms and this highlights the potential policy implications of family business research.
Many excellent surveys of the literature on business growth and survival have appeared in the last decade. This article focuses on small firm literature on survival and growth, drawing on largely non-size-specific surveys only when the intersection between their subject matter and that of small firm growth and survival is significant. The focus is moreover primarily on testable or tested theories, implying a neglect of theory, however intrinsically interesting, which offers no (immediately) testable or tested implications. It is important to note at the outset that the industrial economics literature in general has a rather disparate definition of the term ‘small firm’ from the small business literature as located in the small business journals.
Marina Della-Giusta and Zella King
This article first looks at the rationale for adopting an ‘enterprise culture project’, with specific reference to the case of Britain from the 1980s to the present. It then considers how efforts to promote an enterprise culture might be evaluated, and examines some of the evidence about the impact of enterprise policies in Britain on entrepreneurial attitudes and behaviour. It then reviews some of the academic literature on ‘enterprise culture’ policy and ideology, with a wider discussion of enterprise projects and their implications.
Douglas Michael Wright and Andrew Burrows
This article takes a broader perspective that encompasses both traditional agency-based explanations of buy-outs as well as recognizing the buy-out phenomenon as a vehicle for entrepreneurial innovation. Although early studies suggested that buy-outs involved both agency cost reduction and entrepreneurial aspects, they did not formally conceptualize these two approaches. The agency theory approach conceptualizes buy-outs as a tool that facilitates cost efficiencies. The entrepreneurial perspective sees buy-outs as a means for implementing new innovations and strategic change that enable fuller exploitation of firm resources that may have been blocked by prior ownership arrangements, such as being part of a large diversified firm or a privately-owned firm with leadership succession problems. The article first elaborates the definitions and sources of buy-outs. Secondly, it reviews theoretical perspectives relating to buy-outs, notably the agency approach and an entrepreneurial perspective which draws on the theory of entrepreneurial cognition. The third main section reviews a model to explain different types of buy-out drawing on these two perspectives. The fourth section reviews studies of the effects of buy-outs, identifying evidence consistent with agency and entrepreneurial views of buy-outs. The final section provides discussion and conclusions.
Markus Reihlen and Andreas Werr
Research on entrepreneurship in professional services is rather limited. The authors argue that one reason why the two fields of professional services and entrepreneurship have operated in isolation rather than in mutual interaction is an inherent contradiction between the very ideas of entrepreneurship and professionalism. The perspective on entrepreneurship for this chapter is rather broad, focusing on new venture management and renewal in Professional Service Firms as well as embracing aspects such as learning, innovation, and institutional change. The chapter reviews previous work on entrepreneurship in professional services from three levels of analysis—the entrepreneurial team, the entrepreneurial firm, and finally the organizational field within which the creation and exploitation of entrepreneurial opportunities take place.
This article reviews the existing theoretical and empirical literature on ethnic entrepreneurship. It primarily focuses on empirical research conducted in Britain and the United States. It examines the definition of ethnic entrepreneurship and evaluates the forces affecting entry into ethnic entrepreneurship, entrepreneurial survival and success, as well as the factors underlying the heterogeneity in entrepreneurial behaviour and performance among ethnic minority groups.
Markus C. Becker and Thorbjørn Knudsen
This article first briefly introduces Schumpeter, the issues he tackled in his work, and the contributions he is best known for. It then offers a concise guide to Schumpeter's works and the secondary literature and discusses the evolving pattern of citations to Schumpeter's work in the social sciences. It then provides a comprehensive assessment of Schumpeter's works on entrepreneurship in order to identify insights of practical and theoretical relevance to contemporary research. It draws on sources that are little known, rarely referenced, and in most cases only published in German, in order to distill Schumpeter's insights on entrepreneurship. The article concludes with an assessment of why, even today, Schumpeter's insights can help to further our understanding of entrepreneurship and its organization.