Morris 1995 the Determinants of Entrepreneurial Activity

Determinants ofentrepreneurial

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The determinants ofentrepreneurial activity

Implications for marketingMichael H. Morris

AGA Computer Services, Inc., Tampa, Florida, USA andPamela S. Lewis

Department of Management, University of Central Florida, Orlando,Florida, USA

IntroductionThe interface between marketing and entrepreneurship has receivedconsiderable attention in recent years[1-5]. It has been the subject of numeroussymposia, research tracks and special sessions at international conferences,published articles and special issues of major journals. Further, the AmericanMarketing Association has established an official interest group devoted toexploring the interface, while the publication of a journal whose sole editorialfocus is marketing and entrepreneurship has been announced.

Much of the work on interface issues has dealt with the role of marketing instart-up ventures and small business environments (e.g. [6-11]). Some attentionhas also been devoted to examining the application of entrepreneurial thinkingto the marketing efforts of firms, regardless of size[12-15]. In the latter case,principles and concepts from the entrepreneurship literature have been appliedto the formulation of marketing strategy and tactics, new product development,sales management, buyer behaviour, and marketing education[8,16-21].

Evidence has also been produced which suggests that company performanceis related to a firm’s marketing orientation[12,22-25] as well as to itsentrepreneurial orientation[26-28] and that a significant relationship existsbetween a firm’s marketing and entrepreneurial orientations[29,30]. Suchfindings have led some observers to conclude that marketing andentrepreneurship are highly interdependent, if not part of the sameconstruct[12,15,29,31].

To the extent that marketing affects the success of entrepreneurial ventures,and/or entrepreneurial approaches affect the success of marketing efforts, itwould seem vital for marketers to understand entrepreneurship. The purpose ofthis article is to explore further the underlying nature of entrepreneurship andthe concept of “entrepreneurial intensity”. The forces that determine orfacilitate the level of entrepreneurship that occurs in a given environmentalcontext are identified. Implications are drawn from these determinants formarketing theory and practice.

European Journal of Marketing,Vol. 29 No. 7, 1995, pp. 31-48.

© MCB University Press, 0309-0566

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The nature of entrepreneurshipThe term “entrepreneurship” has resisted precise definition for over 200years[32]. The traditional emphasis was on the efforts of an individual who goesagainst the odds in translating a vision into a successful businessenterprise(e.g.[33]). More recently, however, entrepreneurship has beenconceptualized as a process which can occur in organizations of all sizes andtypes and which is distinct from, but dependent on, specific individuals[34-38].

Approached in this manner, entrepreneurship can be defined as the process ofcreating value by bringing together a unique package of resources to exploit anopportunity[39]. This process requires both an entrepreneurial event and anentrepreneurial agent. The event refers to the conceptualization andimplementation of a new venture. The agent is an individual or group thatassumes personal responsibility for bringing the event to fruition.

The entrepreneurial process has attitudinal and behavioural components[40].Attitudinally, it refers to the willingness of an individual or organization toembrace new opportunities and take responsibility for effecting creativechange[27]. This willingness is sometimes referred to as an “entrepreneurialorientation”. Behaviourally, it includes the set of activities required to evaluatean opportunity, define a business concept, assess and acquire the necessaryresources and then to operate and harvest a venture[39].

Underlying entrepreneurial attitudes and behaviours are three keydimensions: innovation, risk-taking, and proactiveness[26,30,37]. Innovationrefers to the seeking of creative, unusual or novel solutions to problems andneeds. These solutions take the form of new technologies and processes, as wellas new products and services. Risk taking involves the willingness to commitsignificant resources to opportunities which have a reasonable chance of costlyfailure. These risks are typically moderate and calculated. Proactiveness isconcerned with implementation, with doing whatever is necessary to bring anentrepreneurial concept to fruition. It usually involves considerableperseverance, adaptability and a willingness to assume some responsibility forfailure.

To the extent that an undertaking demonstrates innovative, risk-taking andproactive qualities, it can be considered an entrepreneurial event, and theperson behind it an entrepreneur. Further, any number of entrepreneurialevents can be produced in a given time period[38,41]. Accordingly,entrepreneurship is not an either/or determination, but a question of “howmuch” and “how often.”

The variable nature of entrepreneurship is illustrated in Figure 1. Thevertical axis represents the amount of entrepreneurship (number of events),while the horizontal axis captures the degree of entrepreneurship (extent towhich events are innovative, risky and proactive). The combination of the twocan be termed “entrepreneurial intensity”. For simplicity, a two-dimensionaldiagram has been created, and five scenarios are highlighted to describe aparticular society, organization, or individual. The scenarios have been labelledperiodic/incremental, continuous/incremental, periodic/discontinuous, dynamic


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and revolutionary. These labels are intended only to be illustrative, and the fivescenarios have been defined arbitrarily so as to provide examples of howentrepreneurial intensity might vary.

It is possible to identify a wide range of marketing-related efforts that reflectvarious points in the two-dimensional space. For instance, a blackmarketvendor of blue jeans in Moscow is an example of periodic/incrementalentrepreneurship, as is a franchise operation like Dryclean USA. Procter andGamble could be considered continuous/incremental with its continual flow ofconsumer-packaged goods innovations. Alternatively, Polaroid represents afirm that has periodically produced technological discontinuities over the years.Examples of dynamic entrepreneurship might include Ted Turner’s efforts withcable television, as well as the consumer electronics innovations of Sony. And,while it is difficult to identify many cases of revolutionary entrepreneurship,AT&T’s Bell Labs, with its steady stream of breakthrough telecommunicationsinnovations, represents a possible example.

It should further be noted that amounts and degrees of entrepreneurship arerelative, as absolute standards have not been established. Also, it is possible tooperate at more than one point in the space. A given society, organization orindividual could be highly entrepreneurial at particular times, and not at allentrepreneurial at others.

Entrepreneurship and marketingOn the basis of the conceptualization described above, entrepreneurship wouldappear to have much in common with marketing. The American MarketingAssociation[42] defines marketing as the process of planning and executing theconception, pricing, promotion and distribution of ideas, goods and services to

Figure 1.Entrepreneurship as avariable phenomenon

Continuous/incremental Revolutionary

Periodic/discontinuous

Periodic/incremental

Dynamic

Low High

Degree of entrepreneurship(innovativeness, risk-taking, proactiveness)

High

Low

Amount ofentrepreneurship(number of events)


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create exchanges that satisfy individual and organizational objectives. From amanagerial standpoint, this process entails scanning the environment,analysing market opportunities, designing marketing strategies andimplementing and controlling marketing programmes[43]. Approached in thismanner, Hills and Laforge[3] have identified numerous points of interfacebetween marketing and entrepreneurship. For instance, venture ideaidentification, innovation and the exploiting of opportunity logically fitbetween environmental scanning and market opportunity analysis. Similarly,the business plan includes market feasibility analysis and marketing strategy.Value creation is dependent on customer feedback and the ongoing assessmentof customer needs.

Murray[15] has suggested not only that they interact, but that marketing isthe logical home for the entrepreneurial process in organizations. He indicates(p. 96) that “... marketing is uniquely equipped and indeed should feel uniquelyresponsible for analyzing environmental evolution and translating itsobservations into recommendations for the redesign of the corporate resourcebase and its product-market portfolio”. In this view, marketing is a boundaryfunction in organizations, and must be both opportunity-driven and flexible inorder to address turbulence in the external environment. Bonoma[16] hasproposed that marketers must fill the role of the “subversive” in order tocircumvent conventional wisdom in organizations and create necessary change.

A similar suggestion has been made by Zeithaml and Zeithaml[21], whoclaim that the fundamental responsibility of marketing is to effect and managechange in the external environment. Marketing’s role as agent of change at boththe firm and societal levels is a theme which can be traced back to Alderson[44],who depicted marketing as a process of arriving at desirable innovations.Marketing and innovation, which others had argued were the only two basicfunctions of business, were not separate functions according to Alderson.Rather, innovation was at the core of marketing, so that marketers could notexpect to adapt passively to marketplace conditions.

Alderson's sentiments are echoed by Simmonds[31], who concludes that thefunctional role of the marketer is “organized rational innovation”. He reviewsthe dominant paradigms in the marketing discipline and concludes that aninnovation paradigm is most descriptive of what the marketer actively does.Marketers are engaged in a process not only of identifying changeopportunities, but also of inducing continual change in their organizations and,by extension, in the marketplace. The change to which Simmunds[31] refersincludes “ideas, practices, or things adopted within the immediate socialenvironment for the first time” (p. 488).

Two related streams of research have examined empirically the marketingand entrepreneurial orientations of established firms. The first of these involveswork on failure and success rates of new products and new businesses, and hasconsistently demonstrated the critical impact of a marketing orientation onperformance[22,25]. The second has found that the entrepreneurial orientation(or intensity) of firms was significantly and positively related to a number of


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financial, market and employment outcomes, especially under conditions ofenvironmental turbulence[26-28,45,46].

Building on these sets of findings, both Morris and Paul[30] and Miles andArnold[29] have identified a statistically significant relationship where firmsthat were more entrepreneurial also tended to demonstrate a strongermarketing orientation. Both studies raise the possibility that being marketing-oriented and entrepreneurial are part of the same underlying businessphilosophy. Even if not, they are clearly interrelated constructs.

For this reason, it would seem crucial that marketers understand the forcesthat facilitate entrepreneurship. Both at the organizational and societal levels,higher levels of entrepreneurship imply new products and services, shorterproduct life cycles, new markets and market niches, and new forms andmethods of promotion and distribution. All this not only creates a greater needfor marketing, but can be accomplished only as a function of marketing. Let usexplore these forces further.

A model of the determinants of entrepreneurshipThe behaviour patterns, motives, objectives and success rates of those whoengage in entrepreneurial behaviour display considerable variation amongpersons, industries, nations and geographic regions (e.g. [47]). In the UnitedStates, for instance, entrepreneurial efforts resulted in sizeable contributions tothe gross national product and the standard of living in the latter halves of boththe nineteenth and the twentieth centuries[48-50]. On the other hand, suchefforts were relatively insignificant in neighbouring Mexico during the sametime period[51,52]. Such situational results can be traced to the environmentalcontext in which entrepreneurship occurs. The tendency towards innovation,risk-taking, and proactivity is not so much innate to people or to a society, noris it a random or chance event. Rather it is determined by environmentalconditions operating at a number of levels.

Figure 2 represents an attempt to capture these environmental determinantsby grouping them into three general categories: the environmentalinfrastructure which characterizes a society; the degree of environmentalturbulence present in a society; and the personal life experiences of a society'smembers. The combined effect of these environmental influences is the level ofentrepreneurial intensity in society. Although these environmental influencesare admittedly interdependent, each represents a relatively distinct constructthat has a differential impact on societal entrepreneurship. Let us examine allthree in more detail.

Environmental infrastructureThe environmental infrastructure includes the economic, political, legal,financial, logistical and social structures which characterize a society. Certainstructures appear to facilitate both entrepreneurial attitudes andentrepreneurial behaviours[53,54]. For instance, in countries such as Hong


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Kong, which have relatively free, competitive market economies, available poolsof capital and political freedom, entrepreneurship is more in evidence[50,55].

Key aspects of the economic system include freely fluctuating prices in themarkets for products, capital and labour, as well as private ownership, strongprofit incentives, limited taxation and a limited role for government[48,49,56-59]. Each of these is an incentive for individual action and helps ensure thatscarce economic resources are allocated to value-creating activities.

Similarly, the political system fosters entrepreneurship when it is builtaround freedom of choice, individual rights, democratic rule and a series ofchecks and balances among the executive, legislative and judicial branches ofgovernment[60,61]. Such designs are apt to be more tolerant of diversity, moreconducive to ongoing change and more accepting of innovation in all walks oflife. Further, politically-founded initiatives to develop and supportentrepreneurial behaviours (e.g. incubator programmes, tax incentives) serve toencourage the creation and development of entrepreneurial ventures[62].

Legal structures are a significant, positive factor to the extent that theyrecognize the corporate form of enterprise, permit limited liability, ensure

Environmentalinfrastructure

EconomicPolitical Legal Social

Financial

Logistical

Environmentalturbulence

ThreateningDynamic

Personal environmentalexperiences of

society's members

Workrelated

Rolemodels

Family

Complex

Educational

Entrepreneurialactivity

Degree ofinnovativeness,risk-taking,proactiveness

Numberof events

Figure 2.A model of theenvironmentalcontext ofentrepreneurship


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contract enforcement and patent protection, and allow liberal treatment ofbankruptcy, but impose fairly strong restrictions on monopolistic (restraint oftrade) practices. These arrangements serve to encourage risk-taking activityand pre-empt many of the obstacles to new product and process development.

Financial systems are more encouraging of entrepreneurship when they aredeveloped around institutional autonomy, competition among sources ofcapital, competitive interest rates, stable currencies, partial reserverequirements, well-backed deposit insurance and large private investmentpools[56,63,64]. Such circumstances give rise not only to more diverseinvestment strategies on the part of mainstream financial institutions, but alsoto novel types of investment organizations and to creative financingmechanisms. As a result, those individuals and businesses wishing to engage inentrepreneurial activity find the supply of financial resources is greater, and areafforded more choices in terms of the trade-offs which must be made to obtainfunding[63,65].

Logistical arrangements also play a role in entrepreneurship[66, 67]. Thesearrangements include the development of roads, waterways and airports,efficient communication systems and well-integrated channels of distribution.Where each of these areas is highly developed, entrepreneurs are better able toidentify and serve marketplace needs quickly and to capitalize on new methodsand technologies.

Social structures that foster attitudes of individual freedom and anorientation towards self-direction and personal achievement are conducive toentrepreneurial initiatives[53,68]. In societies where the primary concern is atan individual level, rather than at a more collective level, reward systems aremore likely to encourage risk taking, proactivity and innovation. Individualgoal setting, independence and personal ambition are not only recognized, butare encouraged in societies with individualistic social structures. Further, socialsystems that facilitate the development of networks are conducive toentrepreneurial activity. Social relationships provide a forum for entrepreneursto share information, identify opportunities and marshall resources[69,70].

Environmental turbulenceIt appears that the entrepreneurial process is also fostered under conditions ofenvironmental turbulence[65,71]. Rapid change in the technological, economic,customer, competitive, legal and social environments has produced both threatsand opportunities for those engaged in commerce. The contemporary manageris confronted with short decision windows, diminishing opportunity streams,changing decision constituencies, increased resource specialization, lack ofpredictable resource needs, fragmented markets, greater risk of resource andproduct obsolescence, and a general lack of long-term control[72-74]. The resulthas been intensified pressure for innovation and a dramatic increase in societalentrepreneurship over the past two decades[75,76].

Historically, environmental turbulence has been a factor in a large percentageof new product and technological innovations[77,78]. More recently, it has been


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demonstrated that the more dynamic, hostile and heterogeneous theenvironment, the higher the level of innovative, risk-taking and proactivebehaviours[26,79]. Brittain and Freeman[80] have suggested that technologicaland demographic changes create opportunities for those positioned well tocapitalize on such changes. Similarly, Tushman and Anderson[81] proposedthat technological change, whether competence-enhancing or competence-destroying, created opportunities to be exploited through entrepreneurialbehaviours.

The conclusion is that change is a catalyst for entrepreneurial activity. Instable environments there is little need to develop creative responses tochanging conditions. There are fewer rewards for innovative behaviour and,perhaps more importantly, fewer penalties for the failure to innovate. Incontrast, under conditions where survival is dependent on an effective responseto market variations, innovation and entrepreneurship must occur.

The relatively stable and predictable business environment of the 1950s and1960s led to the development of many large, mechanistic organizations. Whilesuch an organizational design may be appropriate for firms which operate inenvironments that are not changing, it is inappropriate for respondingeffectively to environmental turbulence and volatility[34,82]. Burdened byexcessive layers of management, unending red tape, and inflexible policies anddecision rules, these organizations are often incapable of adapting to changes inthe environment in a timely fashion[83].

Smaller, more organic structures appear to be more adept at capitalizing onopportunities brought about by environmental change. Organizations withsuch structures are more capable of identifying potential opportunities,reallocating resources, shifting managerial commitment quickly anddeveloping products, services and/or processes to capitalize on strategicopportunities that result from changing environmental conditions[84,85].Successful adaptation to environmental change necessitates quick, thoroughand frequent internal and external analyses, short planning horizons and thedevelopment of flexible plans that can be adjusted as necessary[37].Entrepreneurial efforts and behaviours are virtually a necessity for coping withsuch environmental change.

These efforts, in turn, create additional environmental turbulence bybringing product and process innovations to markets and changing the waybusiness is done. Entrepreneurship is more than a response to the environment.It represents a source of institutionalized societal change, where firms initiatechanges in technology, marketing or organization, and strive to maintain thelead in changes over competitors. Hence, as the degree of entrepreneurial effortintensifies, so too does the rate of environmental change.

Personal life experiencesThere has been a significant amount of research directed at identifying thepersonal traits and characteristics associated with entrepreneurs (e.g.[33,86-92]). However, attempts to develop a psychological profile of the entrepreneur


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have met with only marginal success because of the significant degree ofvariation among entrepreneurial types[35]. Most research efforts in recent yearshave focused on the more relevant research issue of “why” the entrepreneurdevelops such characteristics[93,94]. In other words, what personal lifeexperiences lead to the development of the entrepreneurial personality?Research suggests that family background/childhood experiences, exposure torole models, previous job experiences and educational experiences have aninfluence on the development of the entrepreneur.

Aspects of family background which seem to affect entrepreneurialbehaviour include parental relationships, order of birth, family income andimmigrant status. Parents instil an early sense of independence and desire forcontrol in the future entrepreneur[95,96]. Entrepreneurs often experienceturbulent and disruptive childhoods. A particularly important aspect ofentrepreneurs’ familial experience is their relationship with their fathers.Several researchers have found that many entrepreneurs experience relativelynegative relationships with their fathers(e.g.[97, 98]) ranging perhaps fromneglect as a result of career demands to actual physical and/or emotional abuseor abandonment. In an attempt to compensate for paternal deficiencies, the ofentrepreneur’s mother devotes herself to helping her child succeed by instillingin him or her a need to excel. Having been raised with a distant and/oruninvolved father figure, the entrepreneur develops a need for independence,self-reliance, and control. Consequently, in an effort to avoid authoritarianrelationships, loss of control, and to fulfil his or her need for success andachievement, the individual turns towards developing entrepreneurial ventures.

Evidence also exists that suggests entrepreneurs are often first-born childrenfrom poorer families and immigrants or the children of immigrants[33,75]. Itappears that those whose lives contain an extra degree of struggle to fit intosociety will more frequently develop entrepreneurial tendencies.

Another important determinant of entrepreneurial behaviour is theindividual's exposure to successful role models[54,65,92,95,99]. Studies haveshown that many entrepreneurs have parents who were self-employed[96, 100,101]. However, role models may also be other family members, teachers,business associates or social acquaintances. Such individuals demonstrate tothe prospective entrepreneur that risk taking, a tolerance for ambiguity,proactivity and innovation lead to independence and self-control. This, in turn,leads to the development of values and attitudes that are conducive toentrepreneurial behaviour.

Previous work experience is another important personal life experience thatshapes the entrepreneur. Brockhaus[86] found that job dissatisfaction “pushes”entrepreneurs out of the organization and towards the development of anentrepreneurial venture. In fact, the majority of the entrepreneurs (59 per cent)in Brockhaus’ study indicated a desire to start their own business before theyhad a product/service in mind, while only a small percentage (14 per cent) weredrawn away from a traditional job by the desire to market a particular


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product/service. Brockhaus also found that the greater the job dissatisfaction,the more likely it was that the entrepreneur would be successful.

Finally, educational experiences influence entrepreneurship. Brockhaus andNord[102] found entrepreneurs had a lower level of education than didmanagers. This lower educational level could lead entrepreneurs to feel limitedin traditional organizational career paths. Frustrated by an inability to achievetheir desired level of success in established organizations, they choose to pursuea venture in which their own assessment of their abilities is more relevant.

Further, the traditional educational approaches which are relied on at theprimary and secondary levels may actually stifle entrepreneurship. Byfostering conformity, stressing standardization and penalizing creative and/ornovel approaches to problem solving, educators serve to discourage thedevelopment of an entrepreneurial orientation in young people[100,103-105].Additionally, business schools and management consultants tend to perpetuatethe resistance to entrepreneurship through their emphasis on structuredorganizational processes and decision making[106,107].

Specifying the proposed relationshipsFigure 3 represents an attempt at a formal specification of the proposedrelationships between environmental determinants and entrepreneurialintensity. The model and proposed relationships provide a foundation for thedevelopment of clearly specified variables and the formulation of specifichypotheses defining the relationship between these variables. It is thusconsistent with recent calls for theory-driven research that addresses issues ofcausality (e.g. [108]) and facilitates empirical advances in entrepreneurshipresearch.

For simplicity, each dimension of the environmental infrastructure,turbulence and life experience is pictured as a continuum on somecharacteristic. As examples, the political structure varies from totalitarianismto democracy, while the customer environment ranges from homogeneous toheterogeneous.

Two caveats should be kept in mind with regard to these dimensions. First,the anchor points on each dimension are not necessarily meant to be opposites.Instead, they represent mutually exclusive alternatives that exist in varyingdegrees. Second, each dimension can be described in terms of a number ofcharacteristics beyond those identified in Figure 3. For instance, workenvironments could be characterized not just as comfortable or unsatisfactory,but also as challenging, complex, stressful or mundane. The particularcharacteristics cited in Figure 3 were selected because they would appear tohave the most salient entrepreneurial implications.

While the relationships proposed in Figure 3 are pictured as linear, this maynot be the case. For example, the financial or logistical infrastructures candiscourage entrepreneurship when they are underdeveloped, but can have thesame effect when they are overdeveloped and become bureaucratic. Similarly,entrepreneurship may be fostered as environmental turbulence increases, but


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extreme levels of turbulence may make it impossible to innovate successfully, ormay remove the incentive for doing so.

In sum, the environmental determinants of entrepreneurship can be viewedas a set of characteristics that describe mutually exclusive conditions ofinfrastructure, turbulence and life experiences. The impacts on entrepreneurialintensity are both direct and non-linear. Although entrepreneurship certainlycan occur under virtually any set of conditions, the relationships proposed hereprovide guidance in terms of fostering or suppressing the aggregate level in agiven social context.

Implications of the model for marketingEntrepreneurship is arguably the single most dynamic force operating in freemarket economies. It is a major factor both in creating economic wealth andadvancing societal quality of life[109,110]. To the extent that it is a part ofmarketing, and marketing is a part of it, the underlying determinants ofentrepreneurship hold important implications for the marketing discipline. Themodel presented here suggests that entrepreneurship is environmentally-driven

Figure 3.Proposed

relationships betweenenvironmental

factors and levels ofentrepreneurship present in society

Economic structures

Political structures

Legal structures

Financial structures

Logistical structures

Social structures

Central planning

Totalitarianism

Unlimited liability

Centralized, conservative

Underdeveloped or obsolete

Institutional

Free enterprise

Democracy

Limited liability

Decentralized, competitive

Well developed

Individualistic

Environmental infrastructure

Highlevelsofentrepre-neurship

Lowlevelsofentrepre-neurship

Technological environment

Economic environment

Customer environment

Competitor environment

Legal/regulatory environment

Resource environment

Social environment

Stagnant

Stable

Homogeneous

Status quo

Passive

Predictable

Traditional

Rapidly changing

Widely cyclical

Heterogeneous

Threatening

Aggressive

Unpredictable

Experimental

Environmental turbulence



Family experiences

Educational experiences

Peer group experiences

Work experiences

Personal life experiences



Nurturing

Conforming/standardized

Complacent/constraining

Comfortable

Authoritarian

Creative/ambiguous

Bold/adventurous

Unsatisfactory


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and, by extension, so is marketing. Moreover, it is our position thatentrepreneurship plays an instrumental role in affecting the evolution ofmarketing both at the societal and organizational levels.

Where higher levels of entrepreneurial intensity occur, not only is economicgrowth and development facilitated, but the nature and scope of the marketingfunction change as well. Countries evolve through various stages of economicdevelopment[111]. As they do so, the focal point of economic and social activitymoves from satisfying lower order to higher order needs. Correspondingly, therelative importance and general thrust of marketing activities change. Sirgyand Fox-Mangleburg[112] describe a movement through marketing stages (e.g.production-oriented, selling-oriented, customer satisfaction-oriented, societalbenefits-oriented) as society advances the stages of economic development.Thus, the forces that facilitate entrepreneurship at the societal level also affectmovement through stages such as these.

A similar set of inferences can be drawn at the level of the firm. Higher levelsof entrepreneurial intensity affect company performance and, by extension, themovement of a firm through the organizational life cycle[113,114]. Thismovement is accompanied by changes in the role of the marketing function. Arelevant perspective in this regard is provided by Tyebjee et al.[20] who discussan evolution through four levels of marketing development in a given company(see also [115,116]).

Implications for marketing can also be drawn from each of the threeenvironmental components in the proposed model. To begin with, as theenvironmental infrastructure evolves from undeveloped to highly developed,there is likely to be greater interdependence and co-ordination of the marketinginstitution with other societal institutions[117]. Marketing’s role becomes morecomplex along the way. A weakly developed infrastructure is likely to findmarketing approached from a sales orientation, with a movement towards acustomer-driven marketing orientation, and then towards social and societalmarketing as the infrastructure becomes more sophisticated[118,119].Entrepreneurship facilitates this movement to the extent that it fosterscompetition among organizations (private, public and non-profit), andemphasizes innovative approaches to solving organizational and societalproblems. Of course, marketing institutions are also part of the infrastructure(e.g. distribution, transportation), and the development of these institutionsserve to facilitate entrepreneurship.

Next, as the environment becomes more turbulent, marketing is affected bothdirectly and through the impact of turbulence on entrepreneurship. There issome evidence that turbulence is associated with a stronger marketingorientation[12,120]. Turbulence creates both threats and opportunities fororganizations, changing the way they have to compete. For instance,McKenna[121] argues that a faster changing and more complex technologicalenvironment has resulted in niche marketing, relationship marketing, morecustomization of marketing programmes, the obsolescence of advertising,speed as a marketing strategy and the general pervasiveness of marketingthroughout organizations. Entrepreneurship plays a key role here, as it


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produces an opportunistic approach to environmental change and thus a steadystream of new products, services and processes (each of which must bemarketed). Akio Morito of Sony Corporation is noted for describing thecompany’s fundamental task as “making our own products obsolete”. Suchinstitutionalized revolution requires what Hamel and Prahalad[122] havetermed “expeditionary marketing”, where new markets are created andcustomers are led rather than followed (see also [21]).

Finally, the implications of the personal experience of individuals formarketing would seem to be primarily indirect (i.e. they impact marketingthrough entrepreneurship). Little attention has been devoted to the question ofwhether certain personal traits and experiences are related to success inmarketing. Some work has been done in the personal selling area and, while thefindings are not conclusive, they do suggest parallels between sales andentrepreneurship in terms of the personal traits and characteristics that areassociated with success (e.g.[18]). Even so, the more relevant implication is thefact that these traits and characteristics are learned, not inherited. At thesocietal, organizational and family-unit levels, environments that are conduciveto creativity, independence, autonomy, achievement, self-responsibility andassumption of calculated risks are likely to induce entrepreneurial behaviour.This, in turn, creates a greater need in entrepreneurs for marketing knowledge.

In conclusion, both marketing and entrepreneurship are opportunity-driven,value-creating processes and can be applied in a wide variety of contexts. Bothare not only products of environmental forces, but also agents of change in theenvironment. A better understanding of these environmental determinants, andof the dynamics of the marketing-entrepreneurship interface, will enablescholars and practitioners to capitalize on the full potential of the theories,concepts, tools and ideas that constitute contemporary marketing knowledge.

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and Benefits Review, 1989, pp. 18-25.Carsrud, A. L., Olm, K.W. and Eddy, G.G., “Entrepreneurship: research in quest of a paradigm”, in

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Hannan, M. and Freeman, J., “The population ecology of organizations”, American Journal ofSociology, Vol. 82, 1977, pp. 929-64.

Jennings, D. and Lumpkin, J., “Functioning modeling corporate entrepreneurship: an empiricalintegrative analysis”, Journal of Management, Vol. 15 No. 3, 1989, pp. 485-502.

Kiser, J., Communist Entrepreneurs: Unknown Innovators in the Global Economy, Franklin Watts,New York, NY, 1989.

Puddington, C., Failed Utopias, ICS Press, San Francisco, CA, 1989.

Documents

Morris 1995 the Determinants of Entrepreneurial Activity