The concept of Proactivity revisited- a contemporary reframing

1. Summary CV2. Context

3. Key messages4. The Opportunity

5. Three views6. Exercise – INV profiling

7. Round off

Martin Hannibal, PhD.

1. Summary CVSummary CV: • Education• Mathematics, SDU 1996 - 1998• Philosophy, SDU, B. A. 2001• Social Science, SDU 2003• M. A. Philosophy, SDU 2004• PhD. Business administration (entrepreneurship) 2012

• Work experience• Carpenter 1993 - 1996• External Teacher: Vejle School of Nursing 2000 - • Full time lecture, Journalism 2004 - 2005 • Full time lecture, Marketing & Management 2005 - 2009• PhD student, Marketing & Management 2009 – 2012• Assistant Professor, Marketing & Management 2012-

• Misc.• Recipient of Tuborg’s annual grant (2009) to excellent business research• Best paper: IAEB 2009• (Married, Two children age 5 (girl) and 9 (boy))

2. Context: Research in International Entrepreneurship

Theme A: Entrepreneurial internationalizationTheme B: International comparison of entrepreneurshipTheme C: Comparative entrepreneurial internationalization

, Jones et al. (2011)

Study a process that involves “a combination of innovative, proactive, and risk-seeking behaviour that crosses national borders […] intended to create value in organizations.” (McDOugall & Oviatt 2000: p903).

3. Key message: decoding today’s literature

I. Sarasvathy SD, Dew N, Velamuri SR, Venkataraman S. 2005 ”Three views of entrepreneurial opportunity” - three different ways of looking at the market, non

are right non are wrong

II. Sarasvathy SD 2001 ”Causation and Effectuation: Toward a Theoretical Shift from Economic Inevitability to Entrepreneurial Contingency” - not necessarily analyse then do, sometimes do then

iterate

‘An entrepreneurial opportunity, […] consists of a set of [1] ideas, [2] beliefs and [3] actions that enable the creation of future goods and services in the absence of current markets for them.’(Ventakaraman 1997)

4. The Opportunity: ontology

1. ‘New ideals or inventions that may or may not lead to the achievement ofone or more economic ends.’(Sarasvathy et al 2005)Case Hyundai/Cat Logistics collaboration: Reduction of waste/storage and Time compression as prime variable in European campaign (yardstick competitor: Toyota)

2. ‘Beliefs about things favorable to the achievement of possible valuable ends.’(Sarasvathy et al 2005)

Case: ‘Fra Mor’ – taking advantage of an extant business model

Quick exercise (15 min): Identify Ideal, Belief, and Action Where is the (added) value

4. The Opportunity: ontology

3. Actions that generate and implement those ends through specific (imagined) new economic artifacts.(Sarasvathy et al 2005)

Board game consultancy:1. Value proposition: Support to (other) game inventors2. Market segment: Amateur game inventors3. Value chain structure: logistics/production4. Revenue model: “mister 15 percent”5. Competitive strategy: High expertise6. Growth strategies: Decrease cost through expertise gain

Case: GameInventors – new economic artifacts

4. The Opportunity: ontology

Two diverse epistemologies are at play in theory developments to opportunity construct: Discovery/creation (Alvarez & Barney 2007, 2010, 2013)

(Shane & Eckhardt 2003, p164)

“Entrepreneurs may be more likely than other persons to discover opportunities because they are […] less susceptible to inaction inertia.” (Shane & Venkataraman, 2000)

4. The Opportunity: epistemologies

“If the entrepreneur were to processes of effectuation […] she would begin by examining the particular set of means or causes available to her.”(Sarasvathy 2001, 246)

4. The Opportunity: epistemologies

Two diverse epistemologies are at play in theory developments to opportunity construct: Discovery/creation (Alvarez & Barney 2007, 2010, 2013)

Adapted from Sarasvathy (2008)

5. Three views

Given/new ends

Scope of control…

Out there/created

Level of uncertainty

Future: made or in the making

Info distribution

‘Level’ of predictability

Focus on ends or means

Ends: ex-ante or established

5. Three views: Allocation

‘The allocative view concerns itself with the optimal utilization of scarce resources. In this view, an opportunity is any possibility of putting resources to better use.’(Sarasvathy et al 2005)

‘Everyone’ has the resources to start a bike repair shop

5. Three views: Discovery

Case: Paper and pulp production in Northern Sweden

Capabilities (known)

Market knowledge- Decline - Selling price decrease

Capabilities (known?)

Market knowledge (unknown)- Growing demand ?

Firm heterogeneity:‘[…] new information or knowledge often requires complementary resources in order to be useful, such as a prior knowledge (Venkataraman, 1997; Shane, 2000) that is also often tacit in nature. Such prior knowledge creates the "absorptive capacity" necessary for an individual to make use of new information (Cohen and Levinthal, 1990)’(Sarasvathy et al 2005)

5. Three views: Creation

‘Entrepreneurial opportunities do not exist […] they get created as the residual of a process that involves intense dynamic interaction and negotiation between stakeholders seeking to operationalize their (often vague and unformed) aspirations and values into concrete products, services and institutions that constitute the economy.’(Sarasvathy et al 2005)Aerosol delivery of insulin

Fri 01 Jan 2011Galway firm signs aerosol insulin deal DIABETES PATIENTS will no longer have to endure regular insulin injections if a new aerosol product being developed by a Galway drug delivery firm is successfully brought to market.

Aerogen has announced a new partnership with San Francisco-based biotechnology company Dance Pharmaceuticals to develop a next-generation inhaled insulin product. In return for granting Dance an exclusive world licence to use its aerosol technology for insulin delivery, Aerogen will be paid development costs and an ongoing royalty stream.(Irish Times.com)

‘Aradigm is actively engaged in fulfilling the promise of developing inhalation drug products that could revolutionize the quality of life of patients with severe pulmonary disease.

Since 1991, the company has attracted an outstanding team of scientists, engineers and clinical experts who have been at the forefront of development of advanced inhalation delivery products. This team pioneered the AERx® iDMS pulmonary delivery of insulin that was used in Phase 3 clinical trials conducted by its partner Novo Nordisk. With the depth of experience and expertise in inhalation delivery, Aradigm is uniquely positioned to develop a portfolio of its own products to treat patients with severe respiratory diseases. […]’(Source: WWW.Aradigm.com)

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5. Three views: but why?

Goodman (1983) Fact, Fiction and Forecast – introduces the concept of ‘grue’ following Knight’s (1921) seminal work on Risk, Uncertainty and Profit

Guiding question: what if optimum allocation is unknown

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A behavioral study of Entrepreneurship in contexts described by high levels of (true) uncertainty

Adapted from Sarasvathy et al (2011)

5. Three views: but why?

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‘Effectuation focuses on commitment with given means as the future is perceived as essentially unknowable.’ (Hannibal 2011)

Means = Who I am, what do I know, whom do I know

5. Three views: but why?

6. Exercise: INV profilingAssignment: - Participation: groups of two and two, time schedule TBA- Scenario: You are an analyst team in a private venture capitalist foundation

and your manager have given you the assignment of prospecting new potential investments. Two INVs has caught your managers attention; Densen Audio and Discovery Systems

- Tools: Key terms from todays lecture and literature aiming to characterize and analyze the case material on Densen Audio & Discovery systems.

- Opportunity: ideal, belief & value- Allocation, discovery, creation (consequence?)

Plenary discussion: what would be the advice?

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Round off

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