The field of entrepreneurship is struggling to be at pace with modern theories of entrepreneurship (Gartner, 2001). Over the last 20 years, development of the recent theories of entrepreneurship has played a role in opportunity recognition (Gaglio and Katz, 2001; Baron, 2004). During this time, many theoretical insights also came from those in fields apart from entrepreneurship such as economics Kirzner (1979), Casson (1982). The acknowledgement of the work of Schumpeter (1934, 1939) also is key in defining entrepreneurship.
Scholars have made attempts to develop theories in this field. This has proved futile due to lack of consensuses about the contents and what constitutes entrepreneurship. Therefore, no accepted theory has emerged regarding the topic. The lack of consensus is due to lack of clarity on what scholars have about the unstated assumptions on entrepreneurship. Gartner (2001) suggests that we are unconscious about the theories we make. The assumptions we make depend on the perspectives one sees.
Different explanations of entrepreneurship adopt radically different theoretical assumptions. Most of these concern three main features of entrepreneurial phenomena. One is the nature of entrepreneurs as individuals (McClelland, 1961; Collins and Moore, 1964. In these theories, they strive to develop rigorous explanations of entrepreneurship. Each assumption has its own characteristics.
Most entrepreneurship scholars do not describe explicitly what assumptions they are using (Gartner, 2003). Few scholars do explicit research and analyze what they are using (Shane, 2003). Many authors do adopt only the only reasonable assumptions that can be made whenever they are formulating their theoretical perspective (Sarasvathy, 2001). Another factor that has hampered the development of the theory of entrepreneurship is the unwillingness of scholars to entertain alternative assumptions (Gartner, 2001)
There are two sets of assumptions which logically constitute theories of entrepreneurship. The theories are contradictory but complementary in nature since in each theory has extremely different settings. Finally, the two complementary perspectives apply in the study of entrepreneurial phenomena. The two applications show in detail the difference between the theories and how they are complementary in nature.
The study of the term innovation features in a variety of other disciplines. However, people often misunderstand the term. There is often confusion with closely related terms such as invention, design, creativity and design. There is a difference of opinion in what innovation means among academics. One such definition taken from the dictionary (The New Oxford Dictionary of English, 1998, p. 942), states, “making changes to something established by introducing something new.” Other concepts related to an invention are growth, exploitation, change, failure, entrepreneurship, customers, knowledge and society.
There is a crucial distinction that creates the difference between innovation and invention. Invention is the initial occurrence of an idea for a new process or product. The first commercialization of an idea is innovation. The two terms closely link each thereby rendering them hard to distinguish one from the other. In many case, there is a considerable time difference between the two. The time lag of several decades or more is not uncommon (Rogers, 1995). The time lags reflect the several requirements in working out the ideas and putting them in practice. Inventions can be carried out in universities, colleges and incubation institutions. Innovations occur mostly in the commercial sphere e.g. firms. In order to turn invention into an innovation, a firm will need to combine several different types of skills, knowledge, resources, and capabilities. The firm may require production knowledge, market knowledge, skills, facilities, a working system, sufficient financial resources and so on.
Another factor complicating invention is that innovation is a continuous process. Taking the car as the example, we know that the car has radically improved in comparison its first commercialization. The improvement is through the incorporation of an extremely large number of other different inventions/ innovations. As a matter of fact, we know that the first versions of nearly all significant innovations were unreliable versions of the devices that are currently in the market. Kline and Roseberg (1986), point this strongly in the paper:
In the process of distinguishing process and product innovation, one looks at the social and economic impact of the two. For instance, the introduction of new products may lead to growth of income and hence clear positive effects, which may not be the case with process innovation (Edquist et al. 2001, Pianta in this volume) due to the cost-cutting nature. The two are clearly distinguishable at the level of the industry or individual firm; however, these differences tend to be blurred at the level of the whole economy. In an individual firm, the product may finally end up as an asset for another industry.
Continuous improvements of the type referred above have the characteristics as "marginal" or "incremental" innovations as opposed to “radical” innovations (such as the design of a unique machinery) or “technological revolutions” (involving a cluster of innovations that together may have a significant impact). Schumpeter focused in particular on the two categories, which he believed to be greater importance. There is a believe, however, that the cumulative impact of incremental innovations is just as strong (if not greater) and that to ignore these would lead to a biased view on the long run, economic and social change (Lundvall et al. 1992).
Across time, culture and societies, humans have always joined with other humans. They do this to create social-living communities. As demonstrated in other species, the human is a social animal. However, living in groups requires concession and compromise. The needs and interests of a group do not always fully match the needs and individual interests of its members. This leads to influential interpersonal processes that take place in groups, which can be summed up using the common word group dynamics.
Kurt Lewin was the leader of the movement to research scientific, study groups. He coined the term group dynamics to describe the way individuals and groups act and react to changing situations and circumstances. William Schutz (1958) looked at a person to personal relations from three dimensional perspectives: Inclusion, affection and control. This is the basis of the theory of group behavior. The theory claims that groups resolve issues in each of these stages. When one stage clears, the individual or group proceeds to the next stage. Conversely, a group may also recede to an earlier stage if unable to resolve the issues at one stage.
Study of groups can be done on psychoanalytically. This happened through Wilfred Bion. Bruce Tuckman (1965) proposed a 4-stage model, aptly named the Tuckman's Stages for a Group. Tuckman states that the ideal group decision making steps should occur in the following four stages: Forming (this involves the pretense to get on or get along with others. One of the aspects is group goal decision making. The use of work groups and teams has become common during the past decades, with approximately 80% of large organizations using work groups (Forsyth, 1999). Working in groups has a number of potential benefits. Organizations that use work groups and teams have expectations in involvement of more members (Cohen, 1994; Lawler 1996), establish more challenging goals (Likert, 1961), produce more satisfaction for their members (Forsyth, 1999), and achieve higher levels of performance (Likert, 1961) than organizations that favor individual production. However, research regarding these potential benefits of groups has not always been positive (Hackman, 1990; Robbins & Finley, 1995). Researchers have consistently found that groups rarely establish challenging goals for their own performance (Hinsz, 1991, 1992, 1995). Setting clear and challenging goals is one of the motivational techniques often used to increase task performance (Locke & Latham, 1990; Mento, Steel & Karren, 1987). Group goal-setting research has emphasized assigned goals, which are performance expectations that are specific. Assigned goals can significantly differ from the goals that groups themselves establish for their own performance (Wegge, 2000). Vast differences also exist between group goals and goals that individuals choose for their own performance based on their personal motivation.
Another aspect of group dynamics is positive reactions to group activities. Group members tend to be more satisfied with their performance than individuals. One of the reasons is that groups fulfill their members’ social and emotional needs (Levine & Moreland, 1998). Forming a group of participants can serve as a positive mood induction (Hinsz, Park & Sjomeling, 2004), individuals expect pleasant experiences from participating in a group. Social identity theory (Abrams & Hogg, 2001) supports the expectation that performing in a group will be a positive experience, provided that a group member feels an attachment to the group. Group members focus on goals (Lewin, 1958). They and have more positive attitudes to attaining those goals (Fishbein & Ajzen, 1975) than individuals, because of visibility and volition that come after discussing and deciding on a group goal with other group members.
Affective experience is a third aspect studied in group dynamics. It plays a prominent role in group functioning. Effective progress toward desired positive outcomes leads to experience of positive affects, such as elation or excitement, whereas the opposite leads to negative effects, like anxiety or tension (Carver, Lawrence & Scheier, 1999). More notable experiences in the group lead to more intense affects (e.g. achieving difficult goals leads to intense positive affect). More intense affective experiences then have a stronger effect on the group by increasing cohesion for positive experiences and by increasing conflict and bitterness for more negative experiences (Grawitch, Block & Ratner, 2005). The intensity of an affect depends the speed of the outcome and the degree to which the individual values or fears the outcome (Carver et al., 1999).
Experiential learning theory defines learning as "the process whereby there is the creation of knowledge and passage through the transformation of experience. Knowledge results from the combination of both grasping and transformation of experience (Kolb 1984, p. 41).
Action is at the core of experiential learning. Instead of thinking about abstract concepts, experiential learning involves direct encounters in the area and concept, in the study. Actual experience plays a role in the validation of the theory or concept. Several authors have ideas that cannot be separated from real life experience. These ideas have to be connected to the learner’s life to for learning to take place (occur (Boud, Cohen & Walker, 1993; Gass, 1992; Keeton & Tate, 1978). In Lewis and Williams (1994) suggests that the twentieth century has had a move from formal, abstract education to one that bases on experience. The most renowned supporter this concept was John Dewey (1938). He emphasizes that there must be a connection between experience and education. In his book, Dewey stresses that there is the physical possession and the interpretation what one has. Physical possession refers to the real events of life. According to Dewey, a learning experience of planned and does not just happen. This means the learners reaffirm the learning experience.
Kurt Lewin, notably said, “there is nothing as practical as a good theory" (Kolb, 1984, p. 9). He believed that theory and practice should be integrated together. His action research methodology, sensitivity training and his works with-groups show the extent of his experience in understanding experiential learning. Lewin’s work brought the discovery that learning occurs in a unique environment. Environment where there is a conflict between the immediate, analytical detachment, presence of dialectic tension and concrete experience (Kolb, 1984, p.9). Kolb (1984) indicates that there should be a connecting link between the classroom and area of work. The classroom is supposedly preparing the learner for the work.
The trainers need to "translate abstract ideas and concepts of academia into the concrete practical and working realities of these peoples' lives” (p. 6).
Students, through experiential learning, need to strive to test the ideas discussed in class on real life situations. Kolb believes that college graduates have no dire preparation for work. He affirms the need for trainers to come with practical experiences. The students link this into reality. The training would prepare graduates to tackle real life experiences.
In Belenky et al. (1986), the concept concerning separate and connected knowing. The former deals with the ideas in the abstract that is separate from life. The latter connected knowing dealing with making connections of the abstract ideas in the life experiences. Enns (1993) and Tisdell (1993) agree with terms in Belenky et al. (1986). Following traditions, the mode of learning has been more of separate knowing rather than connected knowing. This has not been successful either since it has learning not been complete.
Learners have to "relate theoretical concepts to real-life experience" (Tisdell, 1993, p. 98). They become independent thinkers because they see themselves as creators of knowledge.
Learning through experience is also “hands-on” science. This learning aims at problem solving and investigation of problem (Rossman, 1993)
Flick (1993) also relates “hands- on activities enhance the students’ logical, linguistic, and spatial intelligence” (p.1). Flick (1993) goes on as he draws his philosophical support from theoreticians such as Dewey, Piaget and Bruner, who collectively represent an active view of learning and knowledge” (p.1). In other words, experiences allow the students in making meaning of the world around them. Saunders (1992) explain that meaning creation is in the student due to the sensory interaction between him or her and the world. The image created in the mind of the student is independent of the teacher’s involvement. (P.136)