Perception of Entrepreneurial Opportunity: A General Framework

Management Decision, Vol. 50, No. 7, pp.1233-1251, 2012

Posted: 1 Sep 2012  

Maija Renko

University of Illinois at Chicago

Rod Shrader

University of Illinois at Chicago - Department of Managerial Studies

Mark Simon

Oakland University - School of Business Administration - Dept. of Management and Marketing

Date Written: August 31, 2012

Abstract

Purpose – Previous research has predominantly approached the concept of entrepreneurial opportunities from either one of two perspectives: opportunities exist as objective phenomena in the environment waiting to be discovered by alert entrepreneurs, or opportunities are subjectively perceived and even created by individual entrepreneurs. This paper aims to put forward a framework of opportunity perception which demonstrates that all entrepreneurial opportunities possess both objective and subjective qualities, thus helping reconcile both perspectives.

Design/methodology/approach – A conceptual framework is developed, based on previous literature and insights from entrepreneurship, economics, psychology and related disciplines.

Findings – Various perspectives presented in previous research can be combined into a coherent framework that summarizes the components of entrepreneurial opportunity perception. Testable propositions are provided for future research.

Originality/value – The authors show that elements of both subjective perception and objective market conditions contribute to recognized entrepreneurial opportunities. Also, they show that while the perception and pursuit of opportunity is fundamentally idiosyncratic to each entrepreneur, the success of an entrepreneurial endeavor is constrained by the objective conditions of opportunity.

Keywords: Austrian economics, Economics, Entrepreneurialism, Entrepreneurship, Opportunity recognition

JEL Classification: M13

Suggested Citation

Renko, Maija and Shrader, Rod and Simon, Mark, Perception of Entrepreneurial Opportunity: A General Framework (August 31, 2012). Management Decision, Vol. 50, No. 7, pp.1233-1251, 2012. Available at SSRN: https://ssrn.com/abstract=2139549

Maija Renko (Contact Author)

University of Illinois at Chicago ( email )

601 S. Morgan St. (M/C 243)
University Hall 2203
Chicago, IL 60607-7122
United States

Rodney Shrader

University of Illinois at Chicago - Department of Managerial Studies ( email )

601 S. Morgan St. (M/C 243)
University Hall 2203
Chicago, IL 60607-7122
United States

Mark Simon

Oakland University - School of Business Administration - Dept. of Management and Marketing ( email )

Rochester, MI 48309-4401
United States
248-370-3295 (Phone)

HOME PAGE: http://www.sba.oakland.edu/Faculty/simon/index.htm

Paper statistics

Abstract Views
1,260