Guiding Entrepreneurs Through the Quagmire of Business Entities – Three Hypothetical Scenarios for Discussion

[We’re pleased to welcome authors Lynn M. Forsythe of California State University, Fresno, Lizhu Y. Davis of California State University, Fresno, and John M. Mueller
St. Edward’s University.They recently published an article in the Entrepreneurship Education and Pedagogy entitled “Guiding Entrepreneurs Through the Quagmire of Business Entities – Three Hypothetical Scenarios for Discussion,” which is currently free to read for a limited time. Below, they recount the motivation for this research.

EEX_72ppiRGB_powerpointWhat motivated you to pursue this research?

We felt there was a lack of teaching resources and materials for faculty who teach entrepreneurship courses when it comes to educating students (future entrepreneurs) about creating a business entity to support their new business idea.  Some faculty may be tempted to over simplify the topic or ignore it completely.  These cases help faculty illustrate the complexity of the decision. These cases are not particularly intended for business law faculty; however, they can definitely use them if they need a variety of tools to convey knowledge about legal entities for nascent companies.

In what ways is your research innovative, and how do you think it will impact the field?

The research is not innovation. Rather it is the method of conveying knowledge that is new and useful for faculty and students.  We intended to create more diverse pedagogical offerings.  Legal topics tend to be taught out of a textbook, and through results of court cases, not from case studies.  The three case scenarios we have written help students better understand the legal entity decision by engaging them in a context they can relate to with their business idea.  The case scenarios are an experiential means of engaging students on a topic that could be considered dry.

What did not make it into your published manuscript that you would like to share with us?

The main portion of the manuscript consists of three case scenarios, which are couched in different industries with different decision points.  We have provided outside of the manuscript, and online with the publisher, supporting materials that simplify the basic differences between various legal entities (sole proprietorship, limited liability partnership, limited liability corporation, C corporation). This information is normally found in textbooks, however, we have simplified it in a PowerPoint slide deck and chart format to easily and quickly enable both faculty and students to reference the additional material.

Stay up-to-date with the latest research from the journal and sign up for email alerts today through the homepage!

Crowdfunding and Museums: A Field Trip Exemplar in the United Kingdom

[Professors Miriam Isabella Cavalcanti Junqueira and Allan Discua Cruz of Lancaster University Management School recently published an article in the Entrepreneurship Education and Pedagogy which is entitled “Crowdfunding and Museums: A Field Trip Exemplar in the United Kingdom.” We are pleased to welcome them as contributors and excited to announce that the case study will be free to access on our site for a limited time. Below they reveal the development and impact of this research.]

This crowdfunding and field trip exemplar grew out of an attempt to integrate intra and extra classroom activities that could accentuate innovative trends in entrepreneurship teaching bridging theory and real-life applications. Additional considerations included galvanizing engagement of an international and multidisciplinary classroom environment. In the past few years, new financial trends and challenges have infiltrated the creative industries. This has prompted organizations to examine new funding models that could promote innovative artistic representations as well as entrepreneurial opportunities to increase visibility and the commercialization of enhanced consumer experiences including new products and services. We chose a local museum in the Northwest region of the United Kingdom to provide a social context for a museum field trip. The purpose of the field trip was to inform students on the challenges these types of organizations face. Additionally, students were asked to help this museum devise a crowdfunding campaign for a specific project that could publicize the museums offerings and heighten its online presence. Reward-based crowdfunding is a popular crowdfunding model used in the creative industries. It is also one of the latest tools in entrepreneurial finance that could help a creative organization to develop innovative projects with the potential to engage stakeholders’ communities, local businesses and government entities. We hope that our learning activity will be an inspiration to new scholars and educators to research the development of educational experiences that can facilitate the understanding of theoretical perspectives coupled with the simulation of ‘real world ‘experiences.

Stay up-to-date with the latest research through the homepage!

Reflection on Institutions and Entrepreneurship Quality

[We’re pleased to welcome authors Dr. Farzana Chowdhury of University of Texas-Rio Grande Valley, David Audretsch of Indiana University, and Maksim Belitski of the University of Reading. They recently published an article in Entrepreneurship Theory and Practice entitled “Institutions and Entrepreneurship Quality,” which is currently free to read for a limited time. Below, Dr. Farzana briefly describes the motivation and significance of their research.

ETP_72ppiRGB_powerpointDuring 2012-2013 a group of researchers from Indiana University came across a continuing debate on the quantity and quality of entrepreneurial activity. We found that most of the studies to date considered it important to consider not just the quantity but also the quality of entrepreneurship because not all entrepreneurship contributes equally to economic activity.

Theory and empirical research suggested that entrepreneurship is an activity related to pursue and exploit market opportunities. These opportunities define the type of entrepreneurship activity which differs significantly across regions and countries. Recent research also debated that firm entry small business growth and other indicators are not necessarily per se good indicators reflecting the quality of entrepreneurship. Thus, we identified the need to develop a standardized and empirically tested measure of the quality of entrepreneurial activity across countries and to find a way how formal and informal institutions could enhance the quality of entrepreneurship.

Over the subsequent year, the authors participated in a professional development workshop (PDW) at the annual meetings of the Academy of Management in Philadelphia on the links between institutions and the individual choice made by individuals to become an entrepreneur.  Although important research published in two of the premier scholarly journals in the academic field of entrepreneurship,  The Journal of Business Venturing and Entrepreneurship: Theory and Practice had previously analysed this decision, little was known about how entrepreneurship quality is influenced by the corresponding rates of return –- or profit rates – associated with the various types of entrepreneurial activities, which in turn is shaped by the quality of existing political and legal institutions.

Our work focuses on the relationship between the quality of institutions and the quantity and quality of entrepreneurship across countries with different levels of economic development. The research impacts the field of institutional economies and economics of entrepreneurship by combining North’s (1990) institutional theory with Williamson’s (2000) institutional hierarchy approach, Whitley’s (1999) national business systems (NBS) perspective and Baumol’s (1990) theory of the productivity of entrepreneurship to explore the interactive and dynamic relationships between the formal and informal institutions and the quality and quantity of entrepreneurship. From the empirical perspective, the work contributes to understanding what types of institutions should be improved if entrepreneurship policy targets the quality of entrepreneurship activity. Most importantly the strength of the relationship still depends on the level of the country’s level of economic development. Our work provides a ranking of countries in descending order by quantity and quality of entrepreneurial activity which is complementary to the standard measures of entrepreneurial activity provided by the Global Entrepreneurship Monitor.

Stay up-to-date with the latest research through the homepage!

Follow the leader?

entrepreneur-593358__340.jpgWe’ve all heard about them – huge successes and failures that undoubtedly color impressions of entrepreneurial risk and those involved. How do significant events change the subsequent threshold for organizations seeking to become market entries? Who fares better in this type of environment – consensus or non-consensus entrepreneurs?   In a recent article in Administrative Science Quarterly authors Elizabeth G. Pontikes and William P. Barnett look at this less-heralded area of entrepreneurship in “The Non-consensus Entrepreneur: Organizational Responses to Vital Events.”

The abstract for the article:

Salient successes and failures, such as spectacular venture capital investments or agonizing bankruptcies, affect collective beliefs about the viability of particular markets. Using data on software start-ups from 1990 to 2002, we show that collective sense-making in the wake of such vital events can result in consensus behavior among entrepreneurs. Market search is a critical part of the entrepreneurial process, as entrepreneurs frequently enter new markets to find high-growth areas. When spectacular financings result in a collective overstatement of the attractiveness of a market, a consensus emerges that the market is resource-rich, and the path is cleared for many entries, including those that do not have a clear fit. When notorious failures render a market unpopular, only the most viable entrants will overcome exaggerated skepticism and enter, taking the non-consensus route. Venture capitalists likewise exhibit herding behavior, following other VCs into hot markets. We theorize that vital events effectively change the selection threshold for market entries, which changes the average viability of new entrants. We find that consensus entrants are less viable, while non-consensus entrants are more likely to prosper. Non-consensus entrepreneurs who buck the trends are most likely to stay in the market, receive funding, and ultimately go public.

You can read “The Non-consensus Entrepreneur: Organizational Responses to Vital Events” from Administrative Science Quarterly free for the next Current Issue Covertwo weeks by clicking here.

Want to stay up to date on all of the latest research published by Administrative Science QuarterlyClick here to sign up for e-alerts!

Listen to the radio interview with author Elizabeth Pontikes on WGN‘s “The Opening Bell” here.

Book Review: Beyond the Beat: Musicians Building Community in Nashville

Daniel B. Cornfield : Beyond the Beat: Musicians Building Community in Nashville.Princeton, NJ: Princeton University Press, 2015. 218 pp. $35.00, hardcover.

Amir Goldberg of Stanford Graduate School of Business recently published a book review in Administrative Science Quarterly. From the book review:

Drawing on rich interviews with 75 music professionals in Nashville, Cornfield develops both a typology of artist activism and a theory of its genesis. He distinguishes among three types of artist activists: “enterprising artists” produce their own and others’ music and mentor early-career artists; “artistic social entrepreneurs” create social spaces, such as schools and performance venues, that promote professional development; and “artist advocates” reshape unions to meet the needs of independent musicians. The majority of the book—four out of seven chapters—is dedicated to deep introductions of 16 individuals who exemplify these types. From Tina, a Nashville native in her late teens who is dedicated to her Asian–European multiethnic identity and her musical authenticity, to Rick, a union activist who has lived in Nashville since the 1950s, we learn about these music professionals’ artistic visions, audience orientations, and beliefs about risk.

Current Issue Cover

These individual perceptions, contends Cornfield, explain the emergence of artist activism but have thus far been largely neglected by a literature overly focused on structural and institutional factors. Members of the artist community who conceive of success as artistic freedom and who think of their peers as their audiences, he argues, are most likely to become artist activists. How they understand risk—whether as attributable to the individual, a product of interpersonal relationships, or a property of the market—determines what type of activists they will become.

This typology and theory of artistic activism is both elegant and useful. It provides the analytical clarity necessary to disentangle what would otherwise seem like an organic hodgepodge of loosely interdependent musical professionals into its constituent components, and it points to the necessary conditions for the emergence of artist activism. As Cornfield concludes, cities dense with music producers and consumers are more susceptible to activism-oriented artists coalescing into a community of the kind that emerged in Nashville. I wonder, however, where the individual orientations that catalyze artistic activism come from and whether they precede activism, as Cornfield suggests, or cohere retroactively as narratives that activists tell themselves about their experiences. If the latter, then other factors are necessary to piece together the puzzle of Nashville’s musical community.

You can read the full book review published in Administrative Science Quarterly free for the next two weeks by clicking here. Want to keep current on all of the latest research published by Administrative Science QuarterlyClick here to sign up for e-alerts! You can also follow the journal on Twitter–click here to read recent tweets from Administrative Science Quarterly!

You can also read additional blog content for Administrative Science Quarterly content from the ASQ Blog, as well as Editor Henrich Greve’s blog, Organizational Musings.

New Podcast! Protecting Student Intellectual Property in the Entrepreneurial Classroom

Podcast MicrophoneIn the latest podcast from Journal of Management Education, Jane Murray speaks with Jerome Katz and Sarah Wright about their article, “Protecting Student Intellectual Property in the Entrepreneurial Classroom.” The podcast delves into the inspiration for Sarah to interview Jerome about student entrepreneurship, as well as what future research and projects this paper has sparked for Sarah and Jerome.

The abstract for the paper:

While universities are intensely protective of revenue streams related to intellectual property interests for the institution and professors, the financial and legal interests of students in the entrepreneurial process have largely been overlooked. This lack of attention, both in universities and in the literature, is intriguing given the mushrooming growth in entrepreneurial education courses in almost every U.S.
university. This article builds and reflects on an original article by Katz, Harshman, and Lund Dean where the JMEauthors advocate for establishing classroom norms for promoting and protecting student intellectual property. We present research, insights, and reflections from Professor Katz regarding the controversial ethical and legal issues related to student intellectual property in university settings and provide suggested resources for faculty traversing these issues.

Interested in hearing the interview? You can listen to the full podcast by clicking here. You can also read the article, “Protecting Student Intellectual Property in the Entrepreneurial Classroom” from Journal of Management Education free for the next two weeks by clicking here.

Want to hear more podcasts from Journal of Management Education? Click here to view the journal’s podcast archive! You can also stay current on all of the latest research published by Journal of Management Education by clicking here to sign up for e-alerts!

Book Review: The Sound of Innovation

The Sound of InnovationAndrew J. Nelson : The Sound of Innovation. Cambridge, MA: The MIT Press, 2015. 236 pp. $34.00, hardcover.

Gino Cattani of New York University recently published a book review in Administrative Science Quarterly for The Sound of Innovation. An excerpt from the book review:

The emergence of novelty—a new technology or organizational form, or even an entirely new field—has long been a central theme in research on innovation and technology evolution, organizational theory, and institutional entrepreneurship. That these diverse research traditions broadly share the same interest in the emergence of novelty is testimony to the importance of the phenomenon. Each research tradition is rooted in a distinct theoretical perspective and exposes specific mechanisms that are presumed to generate novelty, Current Issue Coverbut deeper insight into the conditions that enable novelty to emerge and take hold stems from integrating those traditions and, possibly, reconciling their differences. For instance, the creation of an entirely new field can hardly be ascribed to the decisions and actions of a single actor (individual or organization) without also invoking features of the broader institutional environment that accommodated them and the social audiences or constituencies willing to provide resources to sustain those decisions and actions. A few attempts have been made to integrate these different research streams. The Sound of Innovation is a systematic effort to develop an interdisciplinary and multilevel account of the emergence of a new field—computer music—that should inspire other scholars to engage in similar endeavors.

You can read the full book review from Administrative Science Quarterly free for the next two weeks by clicking here. Want to keep current on all of the latest research from Administrative Science QuarterlyClick here to sign up for e-alerts!