5 Factors affecting the process of opportunity identification and development
1. Entrepreneurial alertness (recognition of opportunities) 2. Information asymmetry and prior knowledge 3. Accidental discovery vs. Systematic search 4. Social networks 5. Personality traits
‘‘opportunity recognition’’ includes three distinct processes
1) sensing or perceiving market needs and/or underemployed resources (2) recognizing or discovering a ‘‘fit’’ between particular market needs and specified resources, and (3) creating a new ‘‘fit’’ between heretofore separate needs and resources in the form of a business concept and represent respectively perception, discovery, and creation.
The four types of opportunity (matrix)
Problem and solution known -> Dreams Problem known, solution not -> Problem solving Solution known, problem not -> Technology transfer Solution and problem not known -> Business formation
Threat rigidity theory
predicts that managers, when faced with adverse circumstances, will adopt conservative strategic behavior when confronted with external threats, managers focus their decision making on initiatives of efficiency, tighter budgets, cost cutting, and increased accountability. Argues that decline inhibits managerial risk taking, and thus reduces organizational change
The invention perspective / prospect theory
decisions based on risk differ depending on whether a decision maker resides in a domain of gains or losses prospect theory specifies that managers faced with firm performance residing in the domain of losses may engage in higher risk initiatives such as disruptive innovation, foreign market entry, or the hiring of new management teams in the hope of “hitting a home run” to effect turnaround and recovery Decline is an impetus for innovation (invention) invokes prospect theory to assert that managers become more risk seeking
Schemas and scripts
• Schemas are "knowledge structures that represent objects or events and provide default assumptions about their characteristics, relationships, and entailments under conditions of incomplete information" • Scripts, as more localized forms of schemas, direct individual action and understanding in highly particularized The presence of schemas helps us to see, the presence of scripts, to act Most importantly for our purposes, schemas and scripts represent the means through which understanding and action are embedded in established institutional environments
Robust design
locating the novel product or process within the familiar world, invoking valued schemas and scripts, yet preserve the flexibility necessary for future evolution, not constraining the potential evolution of understanding and action that follows use. prospective innovators must carefully choose designs that couch some features in the familiar, present others as new, and keep still others hidden from view.
Institutional theory
Incubent's resistance towards change There are 2 forms of this resistance Institutions constrain behavior through normative and regulatory environments that promotestability and suppress change through rule-setting, monitoring, and sanctioning activities (higher licensing cost etc.) Institutions also resist change by constituting the understand-ings, interests, and actions of actors, providing the institution-485/ASQ, September 2001al logics from which individual thought and action is con-structed (specialists say invention is impossible etc., make it seem like inventor has lost his mind)
Skeumorphs
elements of a design that serve no objectively functional purpose but are essential to the public's understanding of the relationships between innovations and the objects they displace provide few objective constraints: they serve as subjective signposts that signal one possible interpretation of and one way to use a new technology without precluding others Skeumorphs reveal how design mediates between technologies in the abstract and the social systems in which their use is embedded
economic rent-seeking view
· positive impact of innovation on future performance · The economic rent-seeking perspective does recognize that innovation may not always pay · Firms can seek rents through market positioning and particularly through innovating to create unique market positions
issues interpretation view
1. managers may frame innovations as opportunities, & develop a willingness to adopt risky encouraged by strong past performance
The entrepreneurial risk-taking perspective
suggests a positive relationship between innovation and future performance as entrepreneurs reap economic rents from developing new products and business models
creative cognition approach
views creative ideas as being the natural result of applying basic mental operations to existing knowledge structures Existing knoweldge structures can be bridges or fences
conceptual combination
is a process whereby previously separate ideas, concepts, or other forms are mentally merged. This merger of previous concepts requires creativity and can lead to ideas that are substantially different from either of those separate concepts, especially combing opposing ideas, termed as Janusian thinking, is particularly evocative
analogical reasoning
the projection of structured knowledge from a familiar domain to a novel or less familiar one }To apply the knowledge from one domain as a kind of model to help to understand or develop ideas in another domain }To communicate a new idea in a concise and understandable way · The most obvious purpose is applying the knowledge from one domain as a kind of model to help in understanding or developing ideas in another domain, but another purpose is to communicate a new idea to others in a concise, understandable way
ambidextrous
exploring new products and services for emerging markets while exploiting current competences aimed at existing customers and markets ->the ability to pursue exploratory and exploitative innovation simultaneously).
