International Journal of Business Administration News

International Journal of Business Administration is devoted to publishing research papers for academics and professors to share advances in business and management theory and practice. Issues that the journal covers include business administration, marketing, entrepreneurship, human resources, business innovation, organization theory and more. The journal is published in both online and printed versions. All publications are open access in full text and free to download.

We are seeking submissions for the forthcoming issue of International Journal of Business Administration in November 2013. All papers should be written in professional English. The length of 3000-8000 words is preferred. All manuscripts should be prepared in MS-Word format, and submitted online: http://www.sciedu.ca/ijba

MTDPNA in Non-Oil International Organisations in Libyan Post Crisis

For years, training needs analysis has beenmainly about conducting an effective TDP, also training needsare assessed to identify who needs to be trained and the type of training programme they require (Al-Khayyat, 1998; Holten et al., 2000). During the last decade, there is no doubt that training needs assessments are more effective and successful, as the concept of training needs assessment has changed from being a shift from training outcomes to training as a vital business strategy for organisations (Earley and Peterson, 2004; Stone, 2009). Therefore training needs assessment is conducted to assess employees or managers strengths and weaknesses before delivering the training and developing programme (Graf, 2004b; Littrell and Salas, 2005; Tarique and Caligiuri, 2004). Also, training and development programmes which include methodical assessment may decrease costs and time of the programme, as they will be able to control the opportunity and sort of training and development which is essential. (Selmer, 2000)

In this paper, we intend to investigate management training and development programme needs assessment (MTDPNA) in Libyan post-crisis (LPC). An effective training programme is an important key stage undertaken by any organisations in determining the type of T&DP to be provided to their employees or managers.And also to ensure that resources are utilised efficiently, to provide some important information in regards to the topic in the country of study (Libya). As a first step, we present the importance of NOIO in Libyan post-crisis. Second we review literature based on MTDP and MTDP in Libya in particular. MTDP needs assessment in Libya and the Arab region. However very few studies were found in regards to MTDPNA in Libya. Third we distributed questionnaires to all managerial level in 19 NOIO in Libya. Based on our results, we provide suggestions for NOIO in LPC to conduct MTDPNA at different time and to use different methods, and all department can be involved in making decision, as well as MTDPNA can be delivered equally.

2. The importance of NOIO in LPC

In today’s global business environment and dynamic markets, organisations are moving to increase their profit and expand their market outside their region. They also seek to locate their strategy in developing countries to reduce their production costs (Jiraphan, 2000). In addition, according to Moran (2005, quoted in Gamal, 2008), foreign investment helps to overcome many local economic problems.

Therefore, for many years Libya and some Arab countries have been the largest and the most active market for foreign organisations, particularly when they discovered oil (Enshassi, & Burgess, 1990).

However, Eid & Fiona (2003) found that, the Arab countries still receive less Foreign Direct Investment compared to world FDI flows, which mean that FDI plays small part within the Arab region. They suggested that the Arab region and Libya is part of it, have to take some crucial steps to encourage FDI to come to the region and do full business by focusing on three critical areas: public institutions, physical infrastructure, and human resource development. Certainly, by continuing the development process and implementing these three critical areas, the Arab countries can successfully increase investment for long-term benefits (Eid, & Fiona, 2003).

In this regards, Libya is trying to play a crucial role in enticing NOIO to come to Libya and to do a full range of economic activities in order to achieve the highest levels of national growth with a greater access to global markets, and in the hope of raising living standards.

Therefore, steps have been taken by the Libyan Government to promote investment in the non-oil sector, which will be on one hand to create more jobs and to increase minimum wages, labour safety standards, etc. (Hartungi, 2006), and on the other hand to reduce the official unemployment rate which is running in excess of 30% (Political Risk Yearbook: Libya Country Report, 2009).

On achieving that, the government implemented Law No5 in 1997 and its special provisions in 2003, to encourage foreign organisations to enter Libya by establishing branch offices, joint ventures, and representative offices or full business. (Law No. 5, 1997 for Promotion of Investment of Foreign Capital); Amended by (Law No. 7, 2003); and with the finally amended to (Law No. 9, 2010)

According to a speech by the Secretary of General People’s for Economy (and Minister of Economy) in the International Conference on Trade and Investment on Tuesday, 30 March 2010 in Tripoli, “Libya made 150 billion diners for the development of infrastructure, pointing to the availability of all the investment opportunities in various fields in Libya” (http://www.libyaalyoum.com)

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(The original author: Ahmed Mustafa Younes, Jim Stewart, Niki Kyriakidou

Published by Sciedu Press)

Excellent
Date Published: 08/07/2013
5 / 5 stars

Agency Theory Explanations of Self-Serving Sales Forecast Inaccuracies

Both managers and front-line employees alike would agree that workplace behaviors are usually predetermined by how one is evaluated and measured. Indeed, one of the many clichés that has emerged in the corporate world is “show me how I’m measured and I’ll show you how I act.” This paper draws attention to a dysfunctional impact of this cliché by investigating how sales compensation systems can lead to lower firm performance through inaccurate and manipulative forecasts by the sales force.

As a result of constant environmental change, fluctuations in customer order volumes, and incorrect estimates of product demand, sales forecasting is a very complex process. Despite these complexities, sales forecasting remains a key determinant of superior planning and resource allocation because it is a key ingredient for managerial decision making (Lynn, Schnaars, & Skov, 1999; Rieg, 2010). Indeed, executives and managers rely on sales forecasts to make decisions that define strategic alternatives and how resources are allocated in the organization (Lynn, Schnaars, & Skov, 1999). Because of this, firms that forecast more accurately can deploy resources more efficiently.

But sales forecasts are frequently wrong. Simpson (2000) reported that 59% of procurement respondents believed that sales forecasts were only somewhat accurate. Because forecasts are relied upon as if they are accurate and are reference points for managerial decision-making (Lynn et al., 1999), imprecise forecasts cause firms to absorb superfluous carrying costs and/or liquidate excess inventory when consumer product demand subsides. In the latter case, companies may be required to take actions such as selling excess inventory below cost or disassembling manufactured products and reselling the standardized parts. Each of these scenarios could result in considerable financial cost. Thus, firms must take care not to overstate sales forecasts since they result in higher overall costs, which could put the firm at a disadvantage vis-à-vis competitors (Porter, 1980).

Sales forecasts are influenced in several ways, yet the factors impacting accuracy can be divided into three main components: (1) dynamic external, (2) dynamic internal, and (3) manipulative internal factors. Dynamic external factors generate forecast errors caused by exogenous factors, such as environmental scanning deficiencies, macroeconomic disruptions, technological discontinuities, as well as other factors (Hambrick & Mason, 1984). Not unlike the dynamic external factors that impact forecasting accuracy, there is also a dynamic component to internal forecasting error. Weaknesses in forecasting planning (e.g., incorrect trend analysis), human error, and other related factors generate internal forecasting errors. McCarthy, Davis, Golicic and Mentzer (2006) found that more than two-thirds of survey respondents reported an absence of accountability for forecast accuracy. Dynamic external and internal forecasting errors are eminent given the unpredictability of organizational and competitive environments. The focus of our paper, however, is on manipulative internal factors, which are factors that make inaccurate forecasts avoidable.

Specifically, inaccurate forecasts might result from how sales compensation systems are setup because such systems appear to create goal incongruence between managers and the sales force. Agency theory (Jensen & Meckling, 1976) may explain why this incongruence develops, and what managers can do to ‘close the gap.’ In its classical form, agency theory models the relationship between one who assigns responsibilities (the principal) and one who fulfils them (the agent, which in this case is the sales person). Conflict or goal incongruence arises from the contract that governs this relationship. Recognizing that organizations are fraught with divergent interests, the goal of agency theory is to establish optimal compensation contracts between principals and agents to induce agents to act in principals’ interests (Bloom & Milkovich, 1998).

Although most agency theory research has focused on top executive compensation (e.g., Nyberg, Fulmer, Gerhart, & Carpenter, 2010; Pepper & Gore, 2012; Rajgopal, Shevlin, & Zamora, 2006), we believe that the underlying problem is also evident in the relationship between management and salespeople. Sales compensation systems historically been designed to reward individuals for their direct contributions to firm revenues via commissions on sales. Such systems place compensation risk solely on the salesperson. However, by utilizing such systems, organizations may be writing a prescription for excessive inventory due to manipulative sales forecasts. Specifically, as compensation risk is inherently transferred to the salesperson in a commission-based structure (instead of a salary-based structure), an unintended consequence might be that sales forecasts are manipulated to transfer other forms of risk back to the principal.

 

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(The original author: Samuel Y. Todd, Tamara A. Crook, Tony Lachowetz

Published by Sciedu Press)

Excellent
Date Published: 08/05/2013
5 / 5 stars

Seller – Buyer Supply Chain Games Where Shortage Are Permitted

In the area of seller-buyer supply chain management, researchers have been very active in seeking optimal policies for both players to achieve a favorable outcome. Most studies are based on somewhat unrealistic assumptions such as deterministic demand and unpermitted shortages. In reality, due to factors such as irregular production capacity or unanticipated demands, shortages will occur, and it will influence both players’ decisions. In this paper, we include shortage as a decision variable determined by the seller, and demand is assumed sensitive to both selling price and marketing expenditure. The interaction between seller and buyer will be investigated as non-cooperative Stackelberg game, and the cooperation between seller and buyer will be explored based on Pareto-efficient solution concept. Consequences of the non–cooperative and cooperative aspects of these games will be compared and finally, numerical examples and sensitivity analysis will be presented to compare between models with and without shortages.

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(The original author: Xu Zhang, Panlop Zeephongsekul, Maryam Esmaeili

Published by Sciedu Press)

Excellent
Date Published: 08/02/2013
5 / 5 stars

Maximising the Worth of the Young Accountant in Ghana, Treasury Bills or Shares?

For most of your life, you will be earning and spending money. Rarely, though will your current income exactly balance with your consumption desires. Sometimes, you may have more money than you want to spend; at other times, you may want to purchase more than you benefit from your income (Reilly 2003).One would thus need to invest to meet some known or unforeseen circumstances in the future.

Treasury Bills have gained a high appeal among the Ghanaian population as securities with high returns and virtually no default risk (Aboagye, 2003). The establishment of the Ghana Stock Exchange (GSE) in 1990 represented a significant change in the securities markets in Ghana. There are currently 35 listed companies trading on the GSE. Shares on the GSE are traded regularly enabling listed equities to provide more liquidity than unlisted equities, since it is more difficult to dispose off unlisted shares than shares of listed companies. An asset is liquid if it can be quickly converted to cash at a price close to fair market value (Reilly2003) Treasury bills are highly liquid security.

According to finance theory “Those who bear systematic risk expect to be rewarded in the long run”. It is therefore logical that the expected returns on equity investment which is riskier should attract more returns than the return on treasury bills which has virtually no default risk unless the state is destroyed.

Investors are rewarded for bearing risks. In the stock market, investors are rewarded for bearing risk with a risk premium. This risk-return trade off is so fundamental in financial economics that it could well be described as the “first fundamental law of finance.” Ghysels(2004). Investors stand the chance to earn positive risk premiums. This induces them to make investments with potential gains to the whole economy. One issue that bothers investors is inflation.

In general, investors do not like rising prices because that introduces uncertainty into their lives and makes it difficult to plan for the future. Therefore, investors focus on the returns they will receive over and above the rate of inflation.

This is called the real return. The return that investors receive prior to considering the rate of inflation is called nominal returns. Economic theory holds that the real return is approximately given as the nominal return minus the rate of inflation.

Finance theory on the other hand, has it that the rate of return an investor earns is dependent on the level of risk involved in that investment. Risk refers to the chance that some unfavourable event will occur (Brigham 2001). Investment in stocks (shares) is taking high risk. This is because it is possible that the price of the stocks will drop to such an extent that you may lose all your monies invested. Again the return from stocks cannot be estimated precisely.

On the other hand, investment in treasury bills is risk free. The rate of return on treasury bills can be estimated quite precisely. That is, you are sure of exactly how much you will earn upon the maturity of the investment. Investments in stocks are relatively riskier because there is a significant danger of earning much less than the expected return. To illustrate the riskiness, suppose an investor buys GHS 10,000 of short term treasury bills with an expected return of 9%.In this case, the rate of return on the investment 9 percent, can be estimated quite precisely, and the investment is defined as being essentially risk free. However if the same amount has been invested in Stock of a company, then one could analyse and conclude that the rate of return is likely to be 20%, but the investor should recognise that the actual rate of return could range from +1000 percent to -100 percent. Because there is a significant danger of actually earning much less than the expected return, the stock would be relatively risky. Theory thus has it that no investment should be undertaken unless the expected return is high enough to compensate the investor for the perceived risk of investment. The high the probability of default, the riskier the investment; and the higher the risk, the higher the required rate of return.

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(The original author: Ernest Bruce-Twum

Published by Sciedu Press)

Excellent
Date Published: 08/01/2013
5 / 1 stars

Gauging the Market and Non-Market Forces in Indian Aquaculture Industry for a Strategic Position in Fish Vaccines Market

Indian aquaculture segment has become a growth engine for the agriculture sector and is postulated to be one of the key sources of food-protein supporting the growing Indian population in coming years. Elsewhere, scholars have demonstrated India’s overall macro-environmental factors being congenial (Pallapothu & Krause, 2013) and the overall market and sales potential as attractive (Pallapothu, 2013). However, in addition to the overall market attractiveness, estimating the competitive forces in an industry is vital to ensure profitability in a new business. As a continuum of previous work (Pallapothu, 2013), this research addresses the market and non-market forces that are currently shaping the Indian aquaculture segment.

Before entering any market, the investor group or the participating organization has to understand the competitive forces that exist within the industry of choice (aquaculture in this case) to gauge the profitability potential of a new business and to strategize its approach on the market positioning to protect its profit share. Michael Porter (1980) defined the industry structure and the competitive forces in interpreting the microeconomics of an industry for the benefit of management strategy development to position itself either by coping or influencing these competitive forces which has gained popularity and some criticism (Prasad, 2011). The framework demonstrated strengths of unraveling each of the market forces and their impact on capturing the company’s share of profit from the pool of industry stakeholders namely, buyers, sellers, new entrants, competitors, and substitute manufacturers (Porter, 2008).

This study not only contributes to the understanding of the Indian aquaculture market but also quantifies each of the competitive forces with consideration of influences from non-market forces such as culture and history of India to further the profit potential of a new fish vaccines business in India. The article is organized as follows. The second section provides an overview of the literature review on market and non-market forces, and the strategic positioning. In section three, a suitable methodology, study framework, and the data sources used in the study will be outlined. The analyses of the key forces and their impact on the profit potential of the entrant in Indian aquaculture industry will be executed, and described in section four. Comparisons are made to similar industries in Chile and Norway, as these two countries are the leaders in Salmonid aquaculture production. Suggestions on how to position the entrant in this industry will be offered taking into consideration the findings from this research and drawing from the ideas available in the extant literature in section five. Finally, conclusions of the research and the direction for future exploration are summarized in section six.

2. Literature Review

Michael Porter (1980) first described the ‘five competitive forces’ as threats posed by the competitors, the buyers, the suppliers, the new entrants, and the substitute makers that not only shape the industry structure and establish rules of competition but enable a company to realize the profit potential in a given industry. Later, Brandenburger and Nalebuff (1995) introduced the ‘complementors’ as the sixth force by using game theory on how interfirm dependencies among counterparts of substitutors could change the game of business by forming strategic alliances. This dependency was further exemplified by Intel’s former Chairman, Andrew Grove (1996) who defined complementors as the ones who share similar business interests and their products offer synergistic properties.

Hax and Wilde (2001) proposed the Delta Model using network theory on profitability and suggested that the firm in question has to focus on its customers’, suppliers’, and complementors’ industry rather than its own to pursue strategy. They argued that complementors are the key players in competitor lock-out and system lock-in based on the resource-based view of the firm, and postulated that a firm’s profits rely on the resources and capabilities that a company is able to appropriate. An understanding of the industry structure and the underlying major forces that limit the firm’s profitability is therefore vital in forecasting a firm’s earning capability and to derive a strategy to defend or influence its position (Porter, 1980).

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(The original author: Mahendra Kumar Pallapothu, Gary Evans

Published by Sciedu Press)

Excellent
Date Published: 07/31/2013
5 / 5 stars

Acts of Meaning: The Legitimization of New Venture

New ventures, at their inception, face an immediate crossroads. They must select a form from a wide range of organizational design alternatives that not only allow them to achieve their goals but also allow them to access or acquire valuable and necessary resources from the external environment. Thus, the selection of the organization’s form is critical in order to garner legitimacy and sustain viability. Any structure selected may either constrain or strengthen a new venture’s ability to access and exploit such resources (Scott, 1987; Selznick, 1949). Institutional theory and, in particular, its legitimization construct may provide insight into how new ventures select one organizational form over another. Thus, two important questions must be answered: How do new ventures select their organizational forms in an effort to maximize access to life sustaining resources, and, for those new ventures blazing entirely new market paths, how does their nascent, constructed structure evoke an acceptance of legitimacy from the broader, traditional market? New ventures do not just appear; rather they are formed to exploit opportunities, whether it is a discovered opportunity or the creation of an opportunity, entrepreneurs seek to exploit competitive imperfections in the market (Alvarez and Barney, 2007). Yet new ventures in their formal structure as a firm often start long before they are officially incorporated, and indeed many of the interesting internal processes that result in an established organizational form occur before incorporation. The formation and exploitation of opportunities thus leads to the formation of organizations that are created by the entrepreneur to take advantage of the perceived opportunity. Using opportunity formation as our starting point, we attempt to offer insight into when do new ventures need forms that follow the current institutional form’s rules, governance, and structures and when do these new ventures need forms that are not imbedded in current institutions. Entrepreneurs creating new ventures rarely are able to see “the end from the beginning” (Alvarez and Barney, 2007: 15). The process of creating a new venture is enacted in an iterative process of action and reaction (Berger and Luckmann, 1967; Weick, 1979); thus, there is no end until the new venture creation has occurred. This enactment of anew venture, with the end not known at the beginning, may result in a traditional (or standard) organizational structure to exploit the opportunity.

Yet, some of these new ventures also may result in new forms—new structures that even disrupt or change established institutions as they seek to exploit the opportunity. The research question we seek to explore is how institutional theory might provide insight into the organizational structure selected by new venture firms, and also how the new organizational form obtains legitimacy for that structure and thus changes acceptable institutional norms. Below we examine how institutional forces may influence the organizational structure of new ventures in both established and new fields. Our discussion will begin with a review of institutional theory literature; how the concept of organizational structure has developed and is used in this paper; and, a definition of our use of emerging field. From that point we will discuss how institutional theory may provide an explanation of the organizational structures available to new venture firms entering into established business fields. Following the assessment of new ventures in established fields, we use institutional theory to better understand the process by which new ventures may establish an organizational structure where no institutionalized (legitimated) structure currently exists.

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(The original author: Al S. Lovvorn, Jiun-Shiu Chen

Published by Sciedu Press)

Excellent
Date Published: 07/30/2013
5 / 5 stars

Government Size and Trade Openness: Some Additional Insights

A body of influential research has suggested that there is a positive association between trade openness and government size. Cameron (1978), one of the first to establish econometric evidence on the topic, noted that trade openness in 1960 was a strong predictor of the increase in government tax revenues between 1960 and 1975. He pointed out that more open countries tend to be more unionised, with collective bargaining leading to greater demand for social protection accommodated by increasing tax revenues. This pioneering version of the compensation hypothesis – by which more open countries tend to have bigger public sectors – was reappraised and further articulated by Rodrik (1998). While challenging the collective bargaining explanation, Rodrik argued that government spending might serve as an indirect insurance against external (and undiversified) risk. His most influential result was to find a positive association between government consumption and trade integration in a large sample of countries that qualifies openness both as a determinant and as a predictor of government consumption levels across countries (Rodrik, 1998; 1004). (Note 1) This conclusion would suggest a strong complementarity between markets and governments, with a more powerful role for government consumption in those economies that are subject to larger external risks.

In an influential work, Alesina and Wacziarg (1998) (henceforth AW) have challenged the Rodrik’s hypothesis, by arguing that the positive relation between openness and government size could be mediated by country size. The first reason is that country size is negatively correlated to government size, as the costs of certain (non-rival) public goods grow less than proportionally to the size of population. This is typical, for example, of infrastructures, roads, libraries (at least up to the congestion limit) and implies that the per capita cost of public goods declines in larger countries. The second reason is that country size is also negatively correlated to trade openness, as small countries have less opportunity for autarky. As argued by AW (p. 306), these two facts taken together imply that more open countries may have bigger governments.

This has cast some doubts on the existence of a Rodrik-type direct link between openness and government size. Consistently with the two hypotheses, AW – by running OLS on 1980-84 averages for the same set of countries used by Rodrik (1998) – actually find a negative relation between government consumption and population (taken as a proxy of country size) and a negative relation between trade openness and population. In both cases, the log of population exhibits a highly significant negative coefficient, and the result appears robust not only to a parsimonious specification of explanatory variables, but also to an extension of the basic model to control for possibly omitted variables.

Then, in order to capture the impact of country size on the co-variation between government consumption and trade openness, the authors move to the estimation of the basic Rodrik’s specification, where country size is not included among the explanatory variables (as in Table 1 in Rodrik, 1998) and replicate the Rodrik’s result of a positive association between government consumption and trade openness. By omitting trade openness and including country size the negative relation between country size and population is also confirmed. When including both (trade openness and country size), the positive impact of trade openness persists, that confirms the Rodrik’s result. However, AW impute this persistence to the high degree of collinearity between openness and country size. Thus, they experiment a version of the regression where variables calculated as ratios are included in levels and not in logs. In this case, the positive relation between openness and government consumption disappears, showing that the original Rodrik’s result might be driven by the omission of country size. (Note 2)

More recently, Ram (2009) (henceforth R) has challenged the outcome of AW mainly on the econometric ground. Considering 154 countries for the period 1960-2000, R shows that while pooled OLS regressions replicate the results of AW, a fixed effect estimation that takes into account cross-country heterogeneity would not lead to a significant negative co-variation of country size and either trade openness or government size (p. 213). Thus, the estimates by R would be consistent with a direct link between openness and government size along the lines suggested by Rodrik (1998), instead of being mediated by country size as argued by AW. In R, the compensation hypothesis would indeed be supported by the positive sign of trade in all specifications.

This paper sheds additional light on these issues. In particular, it will compare the results by AW and R with those obtained by an updated panel analysis in the period 1962-2009, with data taken from the Penn World Tables 7.0 (PWT) and from the World Development Indicators (WDI). We show that the sign of the relationship between government size and economic openness is not necessarily driven by country size. More importantly, the results obtained by fixed effects as in Ram (2009) show that the compensation hypothesis strictly depends on the inclusion of African countries, further weakening the general validity of the compensation hypothesis.

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(The original author: Paolo Liberati

Published by Sciedu Press)

Acts of Meaning: The Legitimization of New Ventures

New ventures, at their inception, face an immediate crossroads. They must select a form from a wide range of organizational design alternatives that not only allow them to achieve their goals but also allow them to access or acquire valuable and necessary resources from the external environment. Thus, the selection of the organization’s form is critical in order to garner legitimacy and sustain viability. Any structure selected may either constrain or strengthen a new venture’s ability to access and exploit such resources (Scott, 1987; Selznick, 1949). Institutional theory and, in particular, its legitimization construct may provide insight into how new ventures select one organizational form over another. Thus, two important questions must be answered: How do new ventures select their organizational forms in an effort to maximize access to life sustaining resources, and, for those new ventures blazing entirely new market paths, how does their nascent, constructed structure evoke an acceptance of legitimacy from the broader, traditional market?

New ventures do not just appear; rather they are formed to exploit opportunities, whether it is a discovered opportunity or the creation of an opportunity, entrepreneurs seek to exploit competitive imperfections in the market (Alvarez and Barney, 2007). Yet new ventures in their formal structure as a firm often start long before they are officially incorporated, and indeed many of the interesting internal processes that result in an established organizational form occur before incorporation. The formation and exploitation of opportunities thus leads to the formation of organizations that are created by the entrepreneur to take advantage of the perceived opportunity. Using opportunity formation as our starting point, we attempt to offer insight into when do new ventures need forms that follow the current institutional form’s rules, governance, and structures and when do these new ventures need forms that are not imbedded in current institutions.

Entrepreneurs creating new ventures rarely are able to see “the end from the beginning” (Alvarez and Barney, 2007: 15). The process of creating a new venture is enacted in an iterative process of action and reaction (Berger and Luckmann, 1967; Weick, 1979); thus, there is no end until the new venture creation has occurred. This enactment of a new venture, with the end not known at the beginning, may result in a traditional (or standard) organizational structure to exploit the opportunity. Yet, some of these new ventures also may result in new forms—new structures that even disrupt or change established institutions as they seek to exploit the opportunity.

The research question we seek to explore is how institutional theory might provide insight into the organizational structure selected by new venture firms, and also how the new organizational form obtains legitimacy for that structure and thus changes acceptable institutional norms. Below we examine how institutional forces may influence the organizational structure of new ventures in both established and new fields. Our discussion will begin with a review of institutional theory literature; how the concept of organizational structure has developed and is used in this paper; and, a definition of our use of emerging field. From that point we will discuss how institutional theory may provide an explanation of the organizational structures available to new venture firms entering into established business fields. Following the assessment of new ventures in established fields, we use institutional theory to better understand the process by which new ventures may establish an organizational structure where no institutionalized (legitimated) structure currently exists.

For full text: click here

(Author: Al S. Lovvorn, Jiun-Shiu Chen

Published by Sciedu Press)

Is Strategic Entrepreneurship a Pleonasm?

Entrepreneurship and strategy research have developed independently of each other (until recently), yet both Academy’s have been concerned about certain common topics: the sources of innovation, organizational renewal, wealth creation, competitive advantage, growth, and flexibility (see Alvarez, 2003; Stevenson & Jarillo, 1990; Ireland et al., 2001). Both academic fields are heavily influenced by the writings of Schumpeter and some of his concepts have been popularized in the literature as strategic intent (Hamel & Prahalad, 1989), hypercompetition (D’Aveni, 1994), dynamic capabilities (Teece et al., 1997) and the knowledge-based view of the firm (Winter, 1987).

A variety of notions relative to the interface of these two fields have been advanced. One extreme asserts strategic management is “dominant” over entrepreneurship and that future endeavors should concentrate on ‘making the marriage work’ given strategy’s ‘takeover’ (Baker & Pollock, 2007). Meyer (2009) cautions against the ‘takeover’ and ‘integration’ wording prevalent among some strategic management scholars by referencing Judge Learned Hand in a 1941 case of alleged unfair labor practices (National Labor Relations Board vs. Federbrush Co. 121F 2d, 304):

“Words must be analyzed in terms of the context in which they appear, for . . . ‘[w]ords are not pebbles in alien juxtaposition; they have only a communal existence; and not only does the meaning of each interpenetrate the other, but all in their aggregate take their purport from the setting in which they are used, of which the relation between the speaker and the hearer is perhaps the most important part’”.

Another extreme posits the inverse, that strategic management is itself a ‘subset’ of entrepreneurship (Browne & Harms, 2003). Andriuscenka (2003) on the other hand, refers to strategic entrepreneurship as the ‘successor’ of strategic management. V enkataraman & Sarasvathy (2005) use a “courtship” metaphor to liken strategic management to ‘all balcony and no Romeo’, and entrepreneurship being ‘all Romeo and no balcony’ inferring that they are “two sides of the same coin”. Thus, to take either one away, Romeo or the balcony, the whole story would fall apart. Schindehutte & Morris (2009) introduce the notion of a “fertile middle space” with various continua that allow for movement from one theoretical viewpoint to another and argue that strategic entrepreneurship is not a new territory to be colonized by either discipline. The most common notion is that overlapping areas of research, or points of “intersection” exist across both disciplines and that wealth can be created through combining the core advantages of each.

This article uses the Scopus database to quantify the surge of interest in strategic entrepreneurship that has emerged from the two formerly separate management academies of strategic management and entrepreneurship. Despite the growing number of published articles that have been written, the empirical base is still very small with authors positing a wide array of conceptual frameworks and models applicable to both small and large firms. Within the context of large firms, strategic entrepreneurship seems similar to its empirically tested predecessor, corporate entrepreneurship. The article argues that strategic entrepreneurship is somewhat confusing within a large corporation context and is essentially entrepreneurial orientation enacted with strategic intent that can still be best termed as corporate entrepreneurship. The article observes that despite the confusing elements of strategic entrepreneurship it is nevertheless gathering sponsorship and interest characteristic of an admittance-seeking social movement.

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(Author: Deryck J van Rensburg

Published by Sciedu Press)