Comparing Nascent Entrepreneurs and Intrapreneurs and Expectations of Firm Growth

Authors

  • Charles H. Matthews University of Cincinnati
  • Mark T. Schenkel Belmont University
  • Matthew W. Ford Northern Kentucky University
  • Sherrie E. Human Xavier University

Abstract

While both entrepreneurial and intrapreneurial processes yield new ventures, similarities and differences between these two initiation processes and their impact on subsequent venture performance may be substantial. Operating factors that are typically influenced by the founder, such as expectations for growth, activity such as formal business planning, perceptions of environmental uncertainty, and risk preference within the context of new venture initiation processes are explored in this study. We find that nascent entrepreneurs and intrapreneurs are largely similar in terms of their risk tolerance and perceptions of environmental uncertainty. Nascent intrapreneurs, by contrast, appear to be more sophisticated planners than their counterparts and perhaps more aggressive in their expectations for financial growth. These findings enter significantly into a path model of nascent founder growth expectations that should provide a useful foundation in future investigations.

References

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50(2), 179-211.

Ardichvili, A., Cardozo, R.J, & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal Business Venturing, 18(1), 105-123.

Baker, W. H., Addams, H. L., & Davis, B. (1993). Business planning in successful small firms. Long Range Planning, 26(6), 82-88.

Ballantine, J. W., Cleveland, F. W., & Koeller, C. T. (1993). Profitability, uncertainty, and firm size. Small Business Economics, 5(2), 87-100.

Bandura, A. (1986). The social foundations of thought and action. Englewood Cliffs, NJ: Prentice-Hall, Inc.

Becker, T. E. (2005). Potential problems in the statistical control of variables in organizational research: A qualitative analysis with recommendations. Organizational Research Methods, 8, 274-289.

Bettis, R. A. & Hitt, M. A. (1995). The new competitive landscape. Strategic Management Journal, 16(5), 7-19.

Bhide, A. (1992). Bootstrap finance: The art of start-ups. Harvard Business Review, 70(6), 109-117.

Bhide, A. (1994). How entrepreneurs craft strategies that work. Harvard Business Review, 72(2), 150-161.

Biggadike, R. (1979). The risky business of diversification. Harvard Business Review, 57(3), 103-111.

Bird, B. (1988). Implementing entrepreneurial ideas: The case for intention. Academy of Management Review, 13(3), 442-453.

Bird, B. & Brush, C. (2002). A gendered perspective on organization creation. Entrepreneurship Theory & Practice, 26)3, 41-65.

Bracker, J. S., Keats, B. W., & Pearson, J. N. (1988). Planning and financial performance among small firms in a growth industry. Strategic Management Journal, 9(6), 591-603.

Brimer, J. T. (1989). A theory of business expectation formulation. Engineering Costs and Production Economics, 15, 17-25.

Brockhaus, R. H. (1980). Risk Taking Propensity of Entrepreneurs. Academy of Management Journal, 23(3), 509-520.

Brodsky, N. (1995). Why start-ups fail, Inc., 17, 27: Gruner & Jahr USA Publishing.

Bruno, A. & Tyebjee, T. (1982). The environment of entrepreneurship. In C. Kent & D. L. Sexton & K. H. Vesper (Eds.), Encyclopedia of entrepreneurship. Englewood Cliffs, NJ: Prentice-Hall.

Brush, C. G. (1992). Research on women business owners: Past trends, a new perspective and future directions. Entrepreneurship Theory & Practice, 16(4), 5-30.

Brush, C. G. (1997). Women-owned businesses: Obstacles and opportunities. Journal of Developmental Entrepreneurship, 2(1), 1-25.

Camerer, C. & Lovallo, D. (1999). Overconfidence and excess entry: An experimental approach. American Economic Review, 89(1), 306-318.

Carrier, C. (1994). Intrapreneurship in large firms and SMEs: A comparative study. International Small Business Journal, 12(3), 54-61.

Carrier, C. (1996). Intrapreneurship in small businesses: An exploratory study. Entrepreneurship Theory & Practice, 21(1), 5-20.

Casson, M. (1982). The entrepreneur. Totowa, NJ: Barnes & Noble Books.

Casson, M. (2003). Entrepreneurship, business culture and the theory of the firm. In Z. J. Acs & D. B. Audretsch (Eds.), Handbook of entrepreneurship research: An interdisciplinary survey and introduction, Vol. I: 223-246. Boston, NJ: Kluwer Academic Publishers.

Christensen, C. M. (1997). The innovator's dilemma: When new technologies cause great firms to fail. Boston, MA: Harvard Business School Press.

Covin, J. G. & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75-87.

Cyert, R. & March, J. (1963). A behavioral theory of the firm. Englewood Cliffs: Prentice-Hall.

David, P. A. (1985). Clio and the economics of QWERTY. American Economic Review, 75(2), 332-337.

Duncan, W. J., Ginter, P. M., Rucks, A. C., & Jacobs, T. D. (1988). Intrapreneurship and the reinvention of the corporation. Business Horizons, 31(3), 16-21.

Eisenhardt, K. M. (1989). Making fast strategic decisions in high-velocity environments. Academy of Management Journal, 32(3), 543-576.

Fast, N. D. (1981). Pitfalls of corporate venturing. Research Management, 24(2), 21-24.

Freeman, J., Carroll, G. R., & Hannan, M. T. (1983). The liability of newness: Age dependence in organizational death rates. American Sociological Review, 48(5), 692-710.

Gartner, William B. (1988). "Who Is an Entrepreneur? Is the Wrong Question." American Journal of Small Business, 12 (4): 11-32.

Geroski, P. A. (1995). What do we know about entry? International Journal of Industrial Organization, 13(4), 421-440.

Ghosh, D. & Ray, M. R. (1997). Risk, ambiguity, and decision choice: Some additional evidence. Decision Sciences, 28(1), 81-104.

Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Mulivariate data analysis (5th ed.). New York, NY: Macmillan Publishing Co.

Harris, L. C. & Ogbonna, E. (2006). Initiating strategic planning. Journal of Business Research, 59(1), 100-111.

Hisrich, R. D. & Peters, M. P. (1998). Entrepreneurship (5th ed.). Boston, MA: Irwin McGraw-Hill.

Honig, B. (2001). Learning strategies and resources for entrepreneurs and intrapreneurs. Entrepreneurship Theory & Practice, 26(1), 21-35.

Hornsby, J.S., Naffziger, D. W, Kuratko, D. F, & Montagno, R. V. (1993). An interactive model of the corporate entrepreneurship process. Entrepreneurship Theory and Practice, 17(2), 29-37.

Joreskog, K. G. & Sorbom, D. (2001). LISREL 8: User's reference guide. Lincolnwood, IL: Scientific Software International, Inc.

Kanter, R. (1985). Supporting innovation and venture development in established companies. Journal of Business Venturing, 1(1), 47-60.

Kanter, R. M. (1989). When giants learn to dance : mastering the challenge of strategy, management, and careers in the 1990s. New York, NY: Simon and Schuster.

Kilhlstrom, R. & Laffont, J. J. (1979). A general equilibrium entrepreneurial theory of new firm formation based on risk aversion. Journal of Political Economy, 87, 304-316.

Kirzner, I. M. (1999). Creativity and/or alertness: A reconsideration of the Schumpeterian entrepreneur. Review of Austrian Economics, 11, 5-17.

Knight, F. H. (1921). Risk, uncertainty and profit. Boston, MA: Houghton Mifflin.

Krueger Jr., N. & Carsrud, A. L. (1993). Entrepreneurial intentions: Applying the theory of planned behavior. Entrepreneurship & Regional Development, 5, 315-330.

Kuratko, D. F., Montagno, R. V., & Hornsby, J. S. (1990). Developing an intrapreneurial assessment instrument for an effective corporate entrepreneurship environment. Strategic Management Journal, 11, 49-58.

Laitinen, E. K. (1992). Prediction of failure of a newly founded firm. Journal of Business Venturing, 7(4), 323-340.

Lindsay, W. & Rue, L. (1980). Impact of the business environment on the long-range planning process: A contingency view. Academy of Management Journal, 23, 385-404.

Liao, J. & Gartner. W. B. (2007). The influence of pre-venture planning on new venture creation. Journal of Small Business Strategy, 18(2), 1-20.

Locke, E. A., & Latham, G. (1990). A theory of goal setting and task performance. Edgewood Cliffs, NJ: Prentice-Hall.

Low, M. B. & MacMillan, I. C. (1988). Entrepreneurship: Past research and future challenges. Journal of Management, 14(2), 139-161.

Luchsinger, V. & Ray Bagby, D. (1987). Entrepreneurship and intrapreneurship: Behaviors, comparisons, and contrasts. SAM Advanced Management Journal, 52(3), 10-13.

Lumpkin, G. T., Shrader, R. C., & Hills, G. E. (1998). Does formal business planning enhance the performance of new ventures? Paper presented at the Frontiers of Entrepreneurship Research, Wellesley, MA.

Luo, Y. (1999). Environment-strategyperformance relations in small businesses in China: A case of township and village enterprises in southern China. Journal of Small Business Management, 37(1), 37-52.

Masters, R. & Meier, R. (1988). Sex differences and risk-taking propensity of entrepreneurs. Journal of Small Business Management, 26(1), 31-35.

Matthews, C. H. & Scott, S. G. (1995). Uncertainty and planning in small and entrepreneurial firms: An empirical assessment. Journal of Small Business Management, 33(4), 34-52.

Matthews, C. H. & Human, S. E. (2000). The little engine that could: Uncertainty and growth expectations of nascent entrepreneurs. Frontiers of Entrepreneurship Research, Wellesley, MA: Babson College.

McCarthy, B. (2000). Researching the dynamics of risk-taking and social learning: An exploratory study of Irish entrepreneurs. Irish Marketing Review, 13(1), 46-60.

Miller, C. C. & Cardinal, L. B. (1994). Strategic planning and firm performance: A synthesis of more than two decades of research. Academy of Management Journal, 37(6), 1649-1665.

Miller, D. (1983). The correlates of entrepreneurship in three types of firms. Management Science, 29(7), 770-791.

Miller, D. & Friesen, P. H. (1982). Innovation in conservative and entrepreneurial firms: Two models of strategic momentum. Strategic Management Journal, 3(1), 1-25.

Milliken, F. J. (1987). Three types of perceived uncertainty about the environment: state, effect, and response uncertainty. Academy of Management Review, 12(1), 133-143.

Miner, J. B. (1990). Entrepreneurs, high growth entrepreneurs, and managers: Contrasting and overlapping motivational patterns. Journal of Business Venturing, 5(4), 221-234.

Morse, C. W. (1986). The delusion of intrapreneurship. Long Range Planning, 19(6), 92-95.

Norburn, D., Manning, K., & Birley, S. (1986). Beyond intrapreneurship: The metamorphosis of larger corporations. Leadership & Organizational Development Journal, 7(3), 21-26.

Orpen, C. (1985). The effects of longrange planning on small business performance: A further examination. Journal of Small Business Management, 23(1), 16-23.

Orser, B. J., Hogarth-Scott, S., & Wright, P. (1998). On the growth of small enterprises: The role of intentions, gender and experience. Paper presented at the Frontiers of Entrepreneurship Research, Wellesley, MA.

Palley, T. I. (1995). Safety in numbers: A model of managerial herd behavior. Journal of Economic Behavior & Organization, 28(3), 443-451.

Patterson, R. (1986). Strategic planning for small business. In J. R. Gardner & R. Rachlin & A. Sweeny (Eds.), Handbook of strategic planning: 242-251. New York, NY: Wiley.

Pfeffer, J. & Salancik, G. (1978). The external control of organizations. New York, NY: Harper & Row.

Reich, R. B. (1987). Entrepreneurship reconsidered: The team as a hero. Harvard Business Review, 65(3), 77-83.

Reynolds, P. D. (2000). National panel study of U.S. business startups: Background and methodology. In J. A. Katz (Ed.), Advances in entrepreneurship, firm emergence, and growth: Databases for the study of entrepreneurship, Vol. 4: 153-228. Greenwich, CT: JAI Press, Inc.

Reynolds, P. D. (1997). Who starts firms? Preliminary explorations of firms in gestation. Small Business Economics, 10, 103-115.

Reynolds, P. D. (1994). Autonomous Firm Dynamics and Economic Growth in the United States, 1986. 1990. Regional Studies: The Journal of the Regional Studies Association, 28(4), 429-442.

Robinson Jr., R. B. & Pearce II, J. A. (1983). The impact of formalized strategic planning on financial performance in small organizations. Strategic Management Journal, 4(3), 197-207.

Robinson Jr., R. B. & Pearce II, J. A. (1984). Research thrusts in small firm strategic planning. Academy of Management Review, 9(1), 128-137.

Schumpeter, J. (1934). Theory of economic development: An inquiry into profits, capital, credit, interest and the business cycle. Cambridge: Harvard University Press.

Schwenk, C. B. & Shrader, C. B. (1993). Effects of formal strategic planning on financial performance in small firms: A meta-analysis. Entrepreneurship Theory & Practice, 17(3), 53-64.

Shane, S., & Delmar, F. (2004). Planning for the market: business planning before marketing and the continuation of organizing efforts. Journal of Business Venturing, 19(6), 767-785.

Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217-226.

Sharma, P. & Chrisman, J. J. (1999). Toward a Reconciliation of the Definitional Issues in the Field of Corporate Entrepreneurship. Entrepreneurship Theory & Practice, 23(3), 11-27.

Shrader, R. C. & Simon, M. (1997). Corporate versus independent new ventures: Resource, strategy, and performance differences. Journal of Business Venturing, 12(1), 47-66.

Silver, W. S. & Mitchell, T. R. (1990). The status quo tendency in decision making. Organizational Dynamics, 18(4), 34-46.

Spear, R. (2006). Social entrepreneurship: A different model? International Journal of Social Economics, 33(5/6), 399-410.

Starr, J. A. & Macmillan, I. C. (1990). Resource cooptation via social contracting: Resource acquisition strategies for new ventures. Strategic Management Journal, 11(4), 79-92.

Staw, B. M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6(4), 569-576.

Stevenson, H. H. (1999). A perspective on entrepreneurship. In W. A. Sahlman & H. H. Stevenson & M. J. Roberts & A. Bhide (Eds.), The entrepreneurial venture, 2nd ed. Boston, MA: Harvard Business School Press.

Stewart Jr., W. H. and Roth, P. L. (2001). Risk propensity differences between entrepreneurs and managers: A metaanalytic review. Journal of Applied Psychology, 86(1), 145-153.

Stewart Jr., W. H., Watson, W. E., Carland, J. C., & Carland, J. W. (1999). A proclivity for entrepreneurship: A comparison of entrepreneurs, small business owners, and corporate managers. Journal of Business Venturing, 14(2), 189-214.

Sykes, H. B. (1986). The anatomy of a corporate venturing program: Factors influencing success. Journal of Business Venturing, 1(3), 275-293.

Teece, D. J. (1990). Contributions and impediments of economic analysis to the study of strategic management. In J. W. Fredrickson (Ed.), Perspectives on Strategic Management: 39-77. New York, NY: Harper Business.

Teoh, H. Y. & Foo, S. L. (1997). Moderating effects of tolerance for ambiguity and risk-taking propensity on the role. Journal of Business Venturing, 12(1), 67-81.

Timmons, J. A. (1999). New venture creation. Boston, MA: Irwin McGraw-Hill.

Unni, V. K. (1981). The role of strategic planning in small firms. Long Range Planning, 14(2), 54-58.

Wallace, S. L. (1999). Social entrepreneurship: The role of social purpose enterprises in facilitating community economic development. Journal of Developmental Entrepreneurship, 4(2), 153-174.

Weiss, L. A. (1981). Start-up businesses: A comparison of performances. Sloan Management Review, 23(1), 37-53.

Downloads

Published

2009-01-21

Issue

Section

Articles

How to Cite

Comparing Nascent Entrepreneurs and Intrapreneurs and Expectations of Firm Growth. (2009). Journal of Small Business Strategy (archive Only), 20(1), 53-80. https://libjournals.mtsu.edu/index.php/jsbs/article/view/115

Most read articles by the same author(s)