The Importance of Attributes in Entrepreneurial Opportunity Evaluations: An Emerging Market Study

Abstract

Although prior research has established that entrepreneurs have idiosyncratic perceptions about opportunity attributes, we do not yet understand the level of importances attached to attributes when evaluating opportunities. This article uses conjoint analysis to assess how trade-offs are decided when evaluating opportunities considering both individual and business criteria. We hypothesize differences in the perceived importances of opportunities and the unique constellations therein. The results indicate that there is a significant difference in the degree of importance attached to the business sector, capital intensity, technology maturity, market potential and return on investment potential, when individuals evaluate an entrepreneurial opportunity. The business sector was identified as the principal determinant of opportunity attractiveness, followed closely by the market growth rate, which reflects emerging market conditions. By contextualizing the findings, it is suggested that emerging economies impose higher bureaucratic burdens on entrepreneurs, increasing uncertainty as well as operational and transactions costs of firms; therefore, reducing the incentive to invest in capital or technology.

The Importance of Opportunity Recognition Behaviour and Motivators of Employees When Engaged in Corporate Entrepreneurship

“…CE is typically modelled as a learning process in which firms alternately engage in exploration followed by the exploitation of resulting opportunities (Phan et al 2009). It is widely accepted that the innovation process has attitudinal and behavioural components (Roupas 2008;Urban 2009), with the opportunity recognition process representing one of the core intellectual questions in the domain of corporate innovation and entrepreneurship (Urban 2013).. Improved understanding of opportunity recognition helps in identifying crucial aspects necessary for cultivating entrepreneurial ventures, thereby contributing to economic growth and social development (Goedhuys, Sleuwaegen 2010;Ucbasaran et al 2009).…”

“…One major characteristic of firms in emerging markets is that established firms are being transformed into market-oriented enterprises. As the economy is becoming more market-based, it is necessary for these reformed enterprises to undergo an entrepreneurial transformation at the organizational level in order to adapt to the transitioning institutional environment and maintain competitiveness in both local and global markets (Hoskisson et al 2000;Peng 2003;Urban 2013).…”

A new approach to evaluating entrepreneurial opportunities

“…The former refers to overall knowledge (education and experience) and the later indicates specific knowledge about a particular activity (Dimov, 2010). The broad concept of human capital covers many items such as education, skills, knowledge and experience (Wood and McKelvie, 2015; Wood and Williams, 2014; Valliere, 2008), social networks (Cox, 2014; Urban, 2014; Fuentes et al , 2010), personal characteristics (Urban, 2014; Díaz De Leó and Guild, 2003), cognitive and metacognitive abilities (Williams and Wood, 2015; Valliere, 2013; Barreto, 2012; Bryant, 2007; Mitchell and Shepherd, 2010). It also includes intellectual honesty (Spinelli and Adams, 2012), intellectual capital (Lee and Venkataraman, 2006), learnings (Lumpkin and Bergmann Lichtenstein, 2005) and entrepreneurial team’s quality (Argerich et al , 2013; Murnieks et al , 2011).…”

Interpreting strategic issues: Effects of differentiation strategies and resource configurations on corporate entrepreneurship

“…In addition, these differences can separate entrepreneurs who can identify and exploit opportunities from the many who cannot. In other words, the ability to evaluate opportunities is not due to random variation, but springs from systematic processes (Urban, 2014). Some scholars (e.g.…”

“…There is a complex integration of heterogeneous factors that influence individuals who recognize these opportunities (Baron, 2006). Some of these differences include aspirations, intentions, abilities, experiences, and knowledge; these attributes provide a basis for appreciating and interpreting the external shocks as useful market disequilibriums that could translate to future innovative endeavors (Urban, 2014). In addition, these differences can separate entrepreneurs who can identify and exploit opportunities from the many who cannot.…”