Entrepreneurs without money (V). What does it take to be an entrepreneur in different contexts? Why the differences? Part A.
Good afternoon to all. Hope you had a beautiful weekend. Three days ago, we celebrated the victory of France team as the champion of the FIFA World Cup 2018. I thought the French were capable to win since the beginning of the game. Despite the warrior efforts of Croatia, the French squad was bold and consistent. Didier Deschamps, France´s team coach, had the best strategy to win. Deschamps had the benediction of fantastic players, all of them currently playing at the top European clubs such as PSG, Real Madrid, Barcelona, Atletico Madrid, Manchester City, Manchester United, etc. But Deschamps success strategy was to take those valuable players and make them a bold team. The success of a team (in any discipline: sports, religious, business, politics, etc) is the trainer, or the coach or the team manager. Deschamps was able to do it. Viva La France!. Vive Les Bleus!
Let´s continue with our topic for today: What does it take to be an entrepreneur in different contexts? Why the differences?
According to Mintzberg, a context is a type of situation wherein can be found particular strategies, structures, and processes. In entrepreneurship, the word “context” is related to a dynamic set of variables that affect the entrepreneurship formulation-Implementation of the company, the entrepreneurial behavior (actions of the entrepreneur), the type of entrepreneurial innovation and their performance. Each entrepreneurship effort (whatever the stage, either as a microbusiness, a small start-up, as a scalable or high growth startup, or established SME or Corporate venture, etc) is a dynamic entity. It is dynamic, not static. Once we understand that any entrepreneurial venture is a dynamic entity, we will be able to understand the complexity of being a successful entrepreneur.
If you wish to download the last set of slides, click here: Eliescalante Juillet 2018 Entrepreneurs without money Contexts.
Naturally, the entrepreneur entity will be affected by different situations or contexts. Internal contexts (inside the company) and External contexts (outside the company). The slides prepared for today can show you how three entrepreneur endeavors are affected by each of the contexts listed below, and how different these companies are, simply because of the relative weight importance of those different contexts. Moreover, the relative importance of each specific context will affect the business model, the business proposition, the strategy, the behavior of the entrepreneurs, the type of innovation and the performance. The contexts are dynamic. And that is the difficulty of being a successful entrepreneur. Successful entrepreneurs know how to prepare themselves for different dynamic contexts. And it requires preparation. A lot of preparation. This is a dynamic new idea of entrepreneurship contexts.
We have gathered the most important contexts inspired by different authors. Of course, you can add more contexts if you wish (for example religious, or family contexts), but from the point of view of understanding “the context of the entrepreneurship contexts”, we decided to list the main following ones:
- Temporal Context
- Industry Context
- Technology Context
- Social Context
- Institutional Policy Context
- Organizational Context
- Geographic Context
- Spatial Context
- Cultural Context
- Political Context
- Environmental Context
- Ethical Context
- Financial Context
Some authors have defined these “contexts” inside the domains of the start-ups’ ecosystems. But for the sake of providing you a holistic framework, let´s start to define each of these contexts. Note: some of the contexts explained below come “literally” from research papers. Mainly from an Elsevier 2014 paper: “Entrepreneurial innovation: The importance of context”, by Autio, Kenney, Mustar, Siegel, and Wright. (See the source references for additional material):
- Temporal Context: This context is related to the recognition of a temporal dimension as industries and companies evolve from new to growth, maturity, and decline. It means to take into account that the concept of time affects every single entity or type of entrepreneurship project. The Temporal context affects not just the rest of the contexts such as the industry, technological, organizational, institutional, cultural, political, environmental, religious, etc. The evolutionary process of time affects entrepreneurial ecosystems, which are continually demanding a dynamic point of view.
- Industry Context: Industry context is the most widely studied context for entrepreneurial innovation. The Industry analysis is generalized in terms of entrepreneurship. The determinants of the industry profit from demand and competition, suppliers, competitors, customers, substitutes, industry rivalry, etc. In addition, “early stages of industry life cycle might witness high rates of entry due to imitation and bandwagon effects. In later stages, industry structural conditions and resource benevolence may exercise salient influences on entrepreneurial innovation”. The principal framework used in this industry analysis is Porter´s five forces model, despite its critical limitations in relation to the dynamic character of competition.
- Technological context: is defined as “the architectural attributes of the technology around which the entrepreneurial action takes place (Obschonka et al., 2012; Thomas and Autio, 2012). Important here is how the architectural attributes of the underlying technology shape the innovative activities of the various stakeholders in the networks attached to it”. Nowadays technology is a key context in almost any conceivable strategy formulation and implementation. Entrepreneur efforts based in emerging technologies (such as AI, gene therapy, digital tech start-ups, microchips, etc.) have the potential to remake entire industries and obsolete established strategies. Each technological context is dynamic by its nature.
- Social Context: “Substantial attention has focused on how the networks between entrepreneurs, trading partners, financiers, and incumbent firms influence the nature of entrepreneurship (Hoang and Antoncic, 2003; Dubini and Aldrich, 1991). Evolutionary scholars have shown that knowledge is widely dispersed among many heterogeneous agents or social stakeholders and that the interactions and exchanges between them are crucial for new knowledge production (Amin and Cohendet, 2000), and hence entrepreneurial innovation. These agents include entrepreneurs who create and discover new ideas, actors who develop complementary assets, actors in institutional forums, professors, researchers and customers (Garud et al., 2003)”. Social Networks can provide financial capital, information, potential employees, or access to clients, but also the emotional understanding, encouragement, and support that family and friends are able to offer. This itself depends on societal values regarding entrepreneurship, thereby emphasizing links between social and societal contexts.
- Organizational Context: Organizational context captures the influences of, for example, organizational culture, practices, experience, knowledge and skill effects (Nanda and Sorensen, 2010). This is another relatively widely explored contextual influence on entrepreneurial innovation. Some authors agree with the different types or levels of knowledge relating to entrepreneurs emanating from different organizational contexts. The organization itself represents a context which has to be understood. For Bain and Company, the organizational is an important context, one of the dimensions to analyze inside the Founders Mentality theory from Zook, Allen, when using the Bain Micro Battles System.
We will leave the definitions of the rest of the eight contexts for our next post. During this month I will be posting between two to three times per week. I won´t leave you alone. Thank you!
Disclaimer: All the presentation slides shown on this blog are prepared by Eleonora Escalante MBA-MEng. Nevertheless, all the pictures or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated.
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