A Theory of Entrepreneuring
36 Pages Posted: 17 Mar 2016
Date Written: March 14, 2016
This paper develops theory for the organization and governance of value-creating search. While there is broad agreement in both strategy and entrepreneurship that search strategies are deeply connected with value creation, surprisingly little research considers which strategies to design and enact, in which sequence, the tools to employ, or how to structure decision rights concerning those choices.
The extant work on value creating search in both entrepreneurship and strategy also tends to emphasize the context in which search occurs, with less attention paid to cognitive and psychological challenges associated with the process. Our approach suggests that corruption of the search process through psychological and cognitive bias is the critical factor that constrains and potentially severely limits entrepreneurial success.
Our main finding is a prediction of discriminative alignment between different types of search needs, which we represent as a taxonomy, and governance mechanisms that effectively counter search biases and reduce ex ante and ex post search costs.
Keywords: Entrepreneurship, Experimentation, Search, Governance, Problem-Solving Perspective
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