Columbus, OH – April 3, 2008 – A new study published in the Strategic Entrepreneurship Journal illustrates the important implications that both Discovery Theory and Creation Theory have on the effectiveness of a variety of entrepreneurial actions within different contexts.
Discovery Theory is categorized by the idea that entrepreneurial opportunities exist, independent of the perceptions of entrepreneurs, just waiting to be discovered. In contrast, Creation Theory holds that these opportunities are created by the actions of entrepreneurs.
Led by Sharon A. Alvarez and Jay B. Barney of the Fisher College of Business at Ohio State University, researchers explored these theories of entrepreneurship and their implications for the actions of entrepreneurs.
Both Discovery and Creation theory assume the goal of entrepreneurs is to form and exploit opportunities. However, the theories often generate different predictions about when specific actions will be more or less effective in enabling entrepreneurs to form these opportunities.
Only when the theories are linked to specific actions can they have repercussions. The study reviews the implications of discovery and creation assumptions for seven actions, including leadership, decision making, human resource practices, strategy, finance, marketing, and sustaining competitive advantages.
When entrepreneurs operate in a discovery context, a variety of specific actions are likely to be most effective. When they operate in a creation context, a different set of entrepreneurial actions are likely to be most effective.
For example, when exploring the entrepreneurial action of leadership, when operating in a discovery context it would be best for the entrepreneur to lead based on expertise and experience. However, if operating within a creation context, it would be best to lead based on charisma.
“Future research in entrepreneurship will need to carefully examine the context under which entrepreneurs are operating,” the authors conclude. “Understanding the implications of these two theories for the effectiveness of a wide variety of entrepreneurial actions is important.”
This study is published in the Strategic Entrepreneurship Journal. Media wishing to receive a PDF of this article may contact journalnews@bos.blackwellpublishing.net.
Sharon A. Alvarez, Ph.D., is affiliated with the Fisher College of Business at The Ohio State University and can be reached for questions at alvarez_42@cob.osu.edu.
An official journal of the Strategic Management Society, Strategic Entrepreneurship Journal publishes original work recommended by a developmental, double-blind review process conducted by peer scholars. The journal values contributions which lead to improved practice of managing organizations as they deal with the entrepreneurial process involving imagination, insight, invention, and innovation and the inevitable changes and transformations that result and benefit society.
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Strategic Entrepreneurship Journal