Entrepreneurship Theories

According to the trade-off theory of capital structure, businesses must choose between the advantages and disadvantages of debt financing in order to achieve the best capital structure. This hypothesis has significant business implications since startups frequently have particular difficulties in securing funding and controlling their financial structure. The main ideas of the capital structure trade-off theory will be examined in this essay, along with how they apply to entrepreneurship. The trade-off theory of capital structure posits that enterprises must balance the benefits and costs of debt financing in order to attain an optimal capital structure. The capacity to leverage a company's assets and increase shareholder returns are two advantages of debt financing, in addition to the tax advantages of interest payments. However,  However, there are also costs associated with debt financing, including the risk of financial distress, the cost of bankruptcy, and the potential loss o

Structuration theory, developed by Anthony Giddens, highlights the dynamic and subjective nature of opportunities in the context of entrepreneurship. Opportunities are not pre-determined phenomena that exist independently, but are rather shaped and identified by individual entrepreneurs through their unique schemas and perceptions. Entrepreneurs play a crucial role in the creation and development of entrepreneurial ventures by engaging in purposeful actions that co-evolve with the socio-economic system. Each entrepreneur has their own unique interpretation of their socio-economic context, which leads to the evolution of distinctive entrepreneurial trajectories. Entrepreneurial enterprises are created and developed through a four-step process, according to structuration theory. The entrepreneur starts by creating a distinct conceptualization of the opportunity. Second, the business owner acts in accordance with this conceptualization. Third, both the planned and unplanned effects of the

The theory of goal-setting has been thoroughly investigated in a range of professional contexts, including entrepreneurship. According to studies, setting clear, quantifiable, difficult, and achievable goals can improve performance, motivation, and goal attainment (Locke & Latham, 2002; Smeets & Jagers, 2019). By giving their job structure and direction, defining goals can assist entrepreneurs psychologically by reducing the complexity and ambiguity of their everyday operations. Better decision-making, planning, and task prioritizing can result from this, as well as greater persistence and effort in pursuing their objectives. Goals can also be divided into smaller objectives, which can then be separated into easier-to-complete tasks. This can help with resource allocation, time management, and the planning and execution of complicated projects. References: Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-ye

The OLI framework is an extension of internalization theory developed by Harry Dunning . The OLI framework is also known as the eclectic paradigm. The OLI framework has significant effects on entrepreneurship since it offers a framework for comprehending how businesses might use their advantages to succeed as entrepreneurs in international markets. The framework specifically proposes that a mix of ownership, location, and internalization advantages is necessary for successful entrepreneurship in foreign markets. For instance, a business owner looking to enter a foreign market must first determine whether they have ownership advantages that would offer them a competitive edge there. These benefits could consist of distinctive goods or services, cutting-edge technology, or a solid brand reputation. Without these benefits, the entrepreneur would find it difficult to compete with regional businesses and establish a presence in the market. Advantages of location are crucial for business s

Mental disorders were previously studied as problems needing remedies like medication, interventions, or counseling. A common misconception today is that those with mental health disorders are incapable of the same things that neurotypical individuals are. Neurodivergent individuals often perceive and process information differently than neurotypical individuals consider “normal.” However, that does not make them any less capable. Neurological disorders have been linked to success in many instances, particularly in entrepreneurship. In 2015, Freeman et al. (2015) conducted a study on 335 individuals, including 242 entrepreneurs. The study revealed that 49% of the entrepreneurs reported having one or more lifetime mental health conditions. They were also significantly more likely to report a lifetime history of depression (30%), ADHD (29%), substance use conditions (12%), and bipolar diagnosis (11%) than were comparison participants. These results suggest that while individuals with men

This website has had a lot of traffic since its inception. Half a million people have been here. We are working on a new book.We want this audience to know about it. This website was mostly created to benefit students of entrepreneurship who are interested in theory. Our new website, on the other hand, is for the typical employee of an organization who is thinking about leaving to start their own company. We want to tell you about Spinout Ventures , a website that we put up to promote our upcoming book titled: "The employee spinout handbook: A primer for prospective employees-turned-entrepreneurs". The book is the culmination of several years of research about employee entrepreneurship and employee spinouts in particular. Employee spinouts are special because they are not part of the parent company's plan. Rather, they are independent companies created by former employees of parent organizations.  Most of what you find on the internet about spinouts will point you instead

The External Enabler Framework ( Davidsson, Recker & von Briel, 2020 ) is a conceptual toolbox developed for analyzing the strategic and fortuitous influence of changes to the business environment in entrepreneurial pursuits. External Enabler (EE) refers to significant changes to the business environment, such as new technologies, regulatory changes, macroeconomic shifts, demographic and sociocultural trends, changes to the natural environment, and the like. The basic assumption of the EE body of work is that every such change will benefit some entrepreneurial initiatives even if it disadvantages other economic activities. EE analysis focuses on those enabled; other frameworks are needed for analyzing negative consequences of change.  The EE concept was introduced as a more workable alternative to “objective opportunity” for realizing the idea of entrepreneurship as a nexus of enterprising agents and favorable environmental conditions ( Davidsson, 2015 ). Unlike the notion of obje

Could one become addicted to the idea of being an entrepreneur? Countries vary in terms of how their people view entrepreneurs, and entrepreneurship as a career path. In some places, entrepreneurship may be viewed negatively, or associated with corruption. However, the prevailing view of the entrepreneur in the Western Media is the heroic entrepreneur meme. These are often outsiders that manage to disrupt incumbencies and are associated with ideas such as democracy, freedom, and liberty. Perhaps the positive view of the practice has led to entrepreneurship becoming as a desirable pursuit for individuals searching for a lifestyle and character to identity with. These types of individuals have been given names over time including the "Wantrepreneur", Veblenian Entrepreneur or "Untrepreneur". These labels refer to individuals who pursue entrepreneurship not with innovative intentions, or a desire to solve a problem, or to satisfy a need--but solely to live the lifestyl

What is a Born Open Startup? A startup that is born open is one that rejects the notion of proprietary knowledge appropriation (e.g,. obtaining patents ). In fact, software patents are probably the born open crowd's worst abomination.   Instead, a born open startup views itself as a part of a ecosystem of firms that work cooperatively and competitively. They typically are autonomous but have some interconnected goals. Open source startups participate in the development of a community of firms with a shared governing policy to prevent the appropriation of the technology. According to Mekki MacAulay, " Open strategy involves the collective production of a shared good in an open fashion such that the resulting product is available to all, including competitors. In the case of open entrepreneurship, 'born-open' startups are entrepreneurial ventures whose business models are designed specifically based around a collective good. Such business models can be effectiv