A PROCESS FRAMEWORK OF ENTREPRENEURSHIP: FROM EXPLORATION, TO EXPLOITATION, TO EXIT

Abstract

ABSTRACT We develop a process framework of entrepreneurship covering exploration and exploitation of the opportunity as well as the entrepreneur's exit, and suggest that dialectic process theories have the potential to explain the transitions between these phases of the entrepreneurial process. In addition, we apply theories from the fields of sociology, economics, and strategy to better understand and explain various salient activities within the entrepreneurial process. A particular contribution is to increase awareness of the exit phase of the entrepreneurial process, the transition into this phase, as well as the link between entrepreneurial exit and re-entry decisions. INTRODUCTION Although many scholars advocate the view of entrepreneurship as a process (Davidsson et al., 2001; Low & MacMillan, 1988), content models dominate the literature. Those frameworks that adopt a process perspective tend to focus on narrower segments of the field, such as internal corporate venturing (Burgelman, 1983), new venture creation (Shaver & Scott, 1991) or business start-up (Baucus & Human, 1994), and family business succession (Davis & Harveston, 1998). Many of these frameworks focus solely on the exploration of opportunities, such as Ardichvilia, Cardozob, and Ray (2003), or include both exploration and exploitation of opportunities, such as Bhave (1994). This paper seeks to develop a more comprehensive process model of entrepreneurship highlighting the entire process of entrepreneurship from exploration, to exploitation, to the entrepreneur's exit, including the transitions between these three phases. A process-oriented framework is important for entrepreneurial research because of temporal and contextual concerns. Entrepreneurial activity is not carried out in isolation--devoid of context--nor is it carried out at a single point in time. Entrepreneurship is a process that must be viewed in dynamic terms and requires linkages or relationships between key components of the process (Aldrich & Zimmer, 1986). Entrepreneurial activity is shaped and modified by event sequences and interactions among the entrepreneur, the environment, and other relevant actors that unfold over time. Although content models study the antecedents and consequences of constructs, and provide a useful context for studying processes, these models do not tell us how events unfold over time. Furthermore, prior research oftentimes has not described the salient activities and behaviors that constitute the entrepreneurial process, but instead focused on variables affecting the process rather than on the process itself (Baucus & Human, 1994). The proposed framework not only highlights the interconnectedness and dynamic nature of the entrepreneurial process, but also reflects a historical development perspective; that is, path-dependent relationships exist so that later phases are affected by activities in the earlier phases. Reviews of entrepreneurship research also consistently call for a more theory-driven agenda in entrepreneurship research and for integration of the various theoretical perspectives (Bygrave, 1993; Low & MacMillan, 1988). One way to achieve integration is to link different theoretical perspectives along the entrepreneurial process (Poole & Van de Ven, 1989). We show how specific theoretical perspectives shed light on salient activities within this process. In the following sections, we first develop a definition of entrepreneur and entrepreneurship. We then introduce a framework that highlights the three phases of the entrepreneurial process. Next we discuss salient entrepreneurial activities at each phase, followed by an examination of the transitions between the phases based on dialectic process theory. We conclude by highlighting the contribution of this paper to future empirical and conceptual research. ENTREPRENEURS AND ENTREPRENEURSHIP Previous work recognizes a lack of consensus on the meaning of the terms entrepreneur (the individual) and entrepreneurship (the process) (Davidsson et al. …

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