Evolution of Entrepreneurship Research Activities iD...

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Presented at the 24th ASAC Annual Conference held in Montreal, May 25-28, 1996. Copyright ~ 1996. Écoledes Hautes Études Commerciales (HEC), Montréal. Tous droits réservés pour tous pays. Toute traduction ou toutereproduction sousquelque forme que ce soit est interdite. Les texte. v publiés dans la série des cahiers de recherche de /a Chaire d'entrepreneurship Mac/ean Hunter n'engagent que la responsabilité de leursauteurs. /,~!/~JX.~jJ.i;!1~i~~k!iii»~W~t.>Wfl~';"'>;' \. . . '.. .. "'.'.." 'o, Evolution of Entrepreneurship Research Activities iD Canada: A PersonalPerspective by Rein Peterson Working paperno. 96-12-01 December 1996 ISSN : 0840~O53X ~

Transcript of Evolution of Entrepreneurship Research Activities iD...

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Presented at the 24th ASAC Annual Conference held in Montreal, May 25-28, 1996.

Copyright ~ 1996. École des Hautes Études Commerciales (HEC), Montréal.Tous droits réservés pour tous pays. Toute traduction ou toute reproduction sous quelque forme que ce soit estinterdite.Les texte. v publiés dans la série des cahiers de recherche de /a Chaire d'entrepreneurship Mac/ean Huntern'engagent que la responsabilité de leurs auteurs.

/,~!/~JX.~jJ.i;!1~i~~k!iii»~W~t.>Wfl~';"'>;' \.. . '.. .. "'.'.." 'o,

Evolution of EntrepreneurshipResearch Activities iD Canada: APersonalPerspective

by Rein Peterson

Working paperno. 96-12-01December 1996

ISSN : 0840~O53X

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Évolution de la recherche en entrepreneurship au Canada:perspective personnelle

ASAC, Montréal, le 27 mai 1996

Au cours des derniers dix ans, beaucoup de chemin a été parcouru enentrepreneurship au Canada. Le nombre de cours, de programmes ainsi que larecherche dans cette discipline ont connu une progression considérable. Pourle colloque de l'ASAC, j'ai demandé à deux pionniers du domaine au Canada, unanglophone, l'autre francophone, de nous livrer leur perspective personnellesur cette évolution. Je leur ai demandé de nous dire de queUe façon ils en étaientvenus à s'intéresser à cette discipline - en nous présentant si possible desanecdotes personnelles qu'on ne retrouve pas dans leurs écrits- puis à nouslivrer leur réflexion quant aux pistes d'évolution futures susceptiblesd'intéresser les collègues chercheurs. Les textes qui suivent reproduisentl'essentiel de leur présentation.

Louis Jacques FilionChaire d'entrepreneurship Mac1ean HunterHEC. Université de Montréal

Evolution of Entrepreneurship Research in Canada:A Personal View

ln the last ten years, entrepreneurship has made considerable progress inCanada. and the number of courses, programs and research projects hasincreased significantly. For the ASAC Conference, 1 asked two of Canada'sentrepreneurship pioneers, one an English speaker and the other a Frenchspeaker, to give us their persona! views of this evolution. 1 asked them to tell ushow they came to be interested in the discipline - if possible with persona!anecdotes not previously related in their texts - and to identify the avenues theythought were most likely to attract researchers in the future. The mainelements of their presentations are reproduced below.

Louis Jacques FiUonMaclean Hunter Entrepreneurship ChairHEC, University of Montreal Business School

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ASAC, Montreal, May 27, 1996

louis Jacques Filion

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ENTREPRENEURSIDP RESEARCH ACTIVITIES lNA PERSONAL PERSPECTIVE

EVOLUTION OF

(ASAC, Montreal , 1545 - 1700 May 27 ,1996)

When Louis-Jacques Filion asked me to participate on this panel, 1 presume because ofmy gray hair, he said: "Tell them what it was like in the beginning and what we may learnfrom this about the future directions in which Canadian entrepreneurship research should bedirected." Sounded easy enough... .although subsequently 1 discovered that this .. eminance

griese" role is tougher than it looks.

Montreal is my home town. At least 1 spent some wonderful boyhood years growingup here Cote Des Neiges...Notre Dame De Grace...Cote St.Luc...Les Habitants, le clubde hockey extraordinaire... H.E.C. , Universite de Montreal, Jean-Marie Toulouse, etc., etc.1 learned during these formative years some advice that has stood me in good stead. 1 wouldlike to build my presentation around one of these wisdoms. .

During my stay in Montreal 1 learned that: "Il faux reculer pour mieux sauter". Orin Estonian "Kes puuab koigest vaest saab ule igast maest". For those of you who are not"bilinquel" allow me to transalate and say that "once in a while you have to back up, takeanother run at it, to achieve greater heights. " 1 think that we in the Entrepreneurship field have

reached such an impasse, once again. But 1 am getting ahead of myself....

1 started my academic career in management science, in particular 1 was engaged indoing research and writing about inventory management. ln 1979 with Ed Silver who iscurrently at Calgary, we published an eight hundered page book: "Decision Systems forInventory Management and Production Planning". (A third edition is underway and shouldbe out next year. We have a new third author David Pyke, from Dartmouth). The originaltook some 8 years to write. It was relatively mathematical, abstract, filled with optimizationtheoretic premises. On finishing the book 1 decided that my career was at an impasse. Therewere no great managerial insights to be garnered from optimization theories.

ln the early 1970's York students started to corne to me complaining that their coursestended to be oriented largely towards abstract decision theories and being a cog in a largeorganization. There was no opportunity for students to pursue their own career interests orexpress their innate creativity. For example, they said that they were taught about rationalbusiness planning, but were never given an opportunity during the 20 courses they tooktowards an MBA, to plan for their own careers. How different that was from today, whereTimmons at Babson talks about "the dignity of practical knowledge" and "courses that seek toencourage an intellectual yet practical collision with the reaI world".

CANADA:

Rein Peterson

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My father had been a small businessman in Estonia, owning several variety/bookstores.So that 1 became conditioned around the dinner table regarding the problems of being inbusiness for oneself. Some of my earliest memories of my father involve sitting next to thecash box, making sure that no one stole money while my father was in the back of the store.As a four/five year old 1 took my job very seriously and repulsed suspicious looking customerswith pride and passion.

The informal meetings in myoffice, in the 1970's, grew from a couple of students to5, 10 , 20 and these informai sessions became to known as "what to do about daddy?" Manyof the students came from family business and their major concern was whether and how tobecome involved in their father's firm. A lot of agony, stress and emotion was shared duringthese sessions, where 1 as the instructor acted, for the most part, as a simpathetic discussionleader.

ln 1972 we established the first formaI seminar style credit course that basicallyreguired 30 students to prepare for themselves a career plan. What should 1 do with my lifeand business career? Not a trivial question~ one that 1 am still struggling with today. While wedidn't have much theory to guide us we were open, earnest and committed.

ln 1 W3 we started a second course, when we discovered the year before, that therewere two types of individuals in our growing group --- those who wanted ta start their ownbusiness and those who were agonizing over their role within an existing family firm. And soThe York EntrpreneuriaI Studies Programme was born. By 1979, when the programmereceived officiaI University Senate recognition, there were 5 courses, 13 sections and some400 students involved. It also marked the year that 1 abandoned optimization theory, forever.

Most of the content of classes in those early days tended to be war stories bypractitioners who told us " how 1 did il" and an opportunity ta exchange points of view

among each other. There was a feeling that we needed to support each other, because themajority outside our group didn't understand us. We also engaged in some exhortation of otherCanadians who believed that entrepreneurship was something done by Americans or theBritish, but not by colonial Canadians. We envied Les Qubecois who seemed to be much moreentrepreneurial in their outlook and free of colonial preconceptions. We believed that we werepioneers at the very edge of management thought and practice.

Since then 1 have corne to know that my own experience of becoming involved in theentrepreneurship field was not unique. Alfie Morgan at Windsor, Russell Knight at Western,Yvon Gasse our chair from Laval,... were ail trained in other functional areas but got caughtup in this new interest area of the students. Not only was this the case in Canada. Last week 1visited 8t. Louis and Bob BrockhausJ the week before 1 was at Babson with Bill Bygrave andpreviously 1 have spoken to Karl VesperJ Pier AbettiJ Don Sexton, ail recaIled similar similarhistories. ln the late 1970'8 there were some 20 individuals (pioneers 1) from ail over North

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America who had made a similar transition. We felt more like Samurai than as Scholars. Weseemed to be bound by a like challenge. Making sure that entrepreneurship teaching survivedat our institutions. Our colleaques didn't take kindly to populist courses that .. had no

theoretical, nor research content".

This was of course a valid criticism, not that any other field in management had (ordoes have today) much to boast about in terms of academic content that would contribute toimproving management practice. But our pride had been pricked. What ensued was a periodof intense "academic" research activity in entrepreneurship, and a des ire to be accepted inacademically legitimate journals. We didn't have our own journals and it was tough to get intotraditional journals that criticized our submissions as not being theory-based, especially basedon theories that they recognized or promoted. One exception was the psychological research onentrepreneurial characteristics Itraits which became " de riguer" at this time.

The issue of content, in my case, was first addressed in 1975 at the first ISEED(International Society for Entrepreneurship and Economic Development) Conference inCincinnati. This was my first introduction to modelling and research in entrepreneurship. Oneof the presentations made was by Albert Shapero who lectured on a paradigm which he calledThe Entrepreneurial Event. 1 followed him around ail day. 1 remember that he discussed theresuIts of a number of empirical studies that involved rather ad hoc investigations of samplesfrom The Yellow Pages in Columbus, Ohio, etc. 1 must confess that 1 was very impressed anddecided then and there to devote the next phase of my academic career to entrepreneurshipresearch. Albert Shapero became my mentor, and subsequently followed him as The Paul T.Babson Professor at Babson College.

At the time 1 felt totally unprepared for this new area of research. After aIl 1 wastrained basically in Arithmetic and the Calculus, and in abstractions that had relatively little todo with the real world, and nothing with entrepreneurship nor small business. But what]learned form Shapero and his colleaques, was that, to understand the entrepreneurialphenomena you have to totally immerse yourself in their values and issues. Entrepreneurship isa social phenomena that needs to be examined in context. Abstractions that leech out thisaspect, for sake of theoretical elegance, are doomed. Shapero understood this right from thebeginning. His ineligant research methodology resulted in elegant insights. His genius hasstood the test of time, because he understood, not because his results were statisticallysignificant. We do weIl not to forget his example.

ln 1976, after completing the first draft of our inventory book l was scheduled to goon sabbatical. After much thought, l approached John Bulloch and the CFIB with theproposition that l would like to spend 6 months working with them for free. 1 wanted toobserve, first hand, the issues and proposed remedies being debated in the foremost smallbusiness lobbying and political action group in Canada. This total immersion in small businessissues resulted in the publication of the book" Small Business Building A Balanced Economy"in 1977. It was transalated into French by Paul D' Anello holder of the Entrepreneurship Chair

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at Universite de Quebec a Montreal. This was an exciting time, being immersed iD politics, asweil as issues of fact, trying to sort out which was which.

At the end of the 1970'8 a number of outlets for entrepreneurship research becameavailable including the establishment of the ICSB -- Canada (International Council for SmallBusiness in Canada) in Quebec City in 1979. ln addition there were ICSB --International~ISBC (International Small Business Congress ) ~ but the most prestigeous of them wasBabson's Frontiers of Entrepreneurship Research Conference meetings. The early researchpa pers tended to be variable as to quality, and examine characteristics of ill-defined groups,labelled as entrepreneurs or small business, with insufficient concern for important differences.Methodologies utilized tended to be crude or based on simplistic statistical analyses ofquestioinnaire data. Newcomers to the field struggled with unfamiliar issues. But for the mostpart the were focussed on entrepreneurial issues grounded in their own experience.

By the mid-1980' s concern was being expressed about the quality of the research beingconducted in our field. Babson at its conference started to discourage the acceptance of papersthat were deemed ill-conceived. ln particular pa pers on psychological characteristics, startingwith the 1986 Frontiers publication, for which 1 was a co-editor~ were discouraged . That sameyear ~ while at Babson, 1 organized an international entrepreneurship workshop that helped tobroden our perspective that had been dominated by U .S. ideology. The proceedings werereported in a book. "Encouraging Entrepreneurship. Internationally".

ln Saint Louis, Brockhaus and others at the Gateways Entrepreneurship ResearchConference developed a list of priority information which researchers in the field shouldprovide as a part of reporting research results. Instead of simply turning out lists of findings,researchers were asked to explain in detail the process by which findings were deveIoped andthe underlying princip les and the research methodology utilized. Lack of concensus ondefinitions resulted in recommendations that researchers should document their conceptual andother assumptions, rather than spend inordinate amount of time arguing for their ownconceptualizations. It was pointed out that this type of definitionless empiricism worked weIlin organizational behavior when March and Simon suggested it in 1957.

ln 1987 1 organized a similar workshop at the National Centre for ManagementResearch and Development, London, Canada. This resulted in the publication of a book basedon the proceedings entitled "Understanding Entrepreneurship". A heated debate took placebetween those who wanted definitionless empiricism and those who held that entrepreneurs areonly those indivduals who start their own new business. This latter tradition still is moredominant among Canadian researchers than, for example, south of the border.

While debating about concepts, a most important event, that put Entrepreneurship onthe public agenda, as an important discipline, ocurred outside our the field. You will recallthe publication in 1987 of David Birch's book, "Job Creation ln America". This exhaustivestudy of a large empirical data base~ has created its own methodological controversies. But

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there is no denying that we need more breakthroughs like this for the field to progress.

About the same time, Howard Stevenson at Harvard Business School expanded thedefinition of entrepreneurship to include a larger set of phenomena: " pursuit of opportunities

beyond resources currently controlled". That is, entrepreneurship is a process rather than anindividual per se, therefore it makes no sense to focus on individuals, per se. Furthermore,conceptualizations in the field became less culture bound, particularly U .S. culture bound,with its undue emphasis on individuality, freedom and the American Dream. Internationalentrepreneurship as a sub- field became more popular, at least in the eyes of the Americans. lnpart this was brought about by the breakdown of the USSR and an opportunity for academicsto travel and study in these countries. We in Canada and in Europe were aware of internationaldifferences much earlier.

The late 1980's/early 1990's we saw the establishment of two journals that became tobe respected outside our field -- The Journal of Business Venturing and Entrepreneurship:Theory and Practice. These two journals have attracted a number of excellent new researchersinto the field. Aiso helping with the development of the field was the establishment of theEntrepreneurship Group within the Academy of Management.

We have corne a long way as an academic field. Some of the articles published in ourbest journals and those of other fields are as abstract and as trivial as any in academia.Unfortunately, 1 believe that we have fallen into the rut of publishing for the sake ofpublishing. l am concerned about the convergence of research in our field with that of moreestablished fields such as economics, strategie management, and psychology (research onfinding definitive entrepreneurial characteristics is not dead). This convergence is driven byour need to be accepted by those in the 80 called mainstream. Such acceptance, 1 fear couldcorne at the expense of not bringing a new point of view into management literature, bylooking at outlier samples and groups. This has been a major contribution thatentrepreneurship research has made to management literature.

1 have had an opportunity to review the literature since my recent heaIthmisadventure. For the most part it doesn't match the excite ment 1 felt when 1 listened toShapero~ or tried to decifer Bulloch's rhetoric from facto There have been some excellentpieces from such researchers as Bygrave and his colleaques at Babson that have illuminated ourunderstanding. But for the most part 1 can't help feeling that the field is spinning its wheels forthe sake of getting brownie points for promotion and excuses to partake of travel funds. Whereis the passion we once felt for leaping forward?

1 am of the opnion that "Il faux reculer pour mieux sauter". We need to go back andreexamine the foundational. seminal articles that we are too quick to quote, because theyaresafe with referees and editors. Take for example McClelland's Achieving Society book. Howmany have really read the original research or gone back to see what he really did. If you do ,you will be surprised at the modesty that he showed for his work. What did he really prove 1

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He showed that children's stories can be content analysed according to whether theyencouraged the children to be "achievement oriented". He showed that countries with highelectricity generation per capita correlated positively with high scores on children's stories thatappeared to emphasize individuality. Interesting to be sure, but 1 have always been puzzledhow this correlation explains the success of US capitalism. The result of course is in line withAmerican ideology. 1 wonder though whether the wide acceptance of these attributions werenot influenced by the era of McCartyism, rampant at the time of publication.? Why have theother two needs that he also examined received seant attention --- Le. Need for Affiliation orthe Need for Power? ln Scandinavian countries entrepreneurs understand how to work in acommunitarian societies and have a weIl recognized need for affiliation. Is North Americannetworking that different from the need for affiliation? What about the need for power thatseems to be weil understood by entrepreneurs in the former republics of the Soviet Union? Areunfriendly mergers and takeovers in North America unconcerned with issues related to power?

Take another example. It is conventionally taught that entrepreneurs are "moderate"risk takers. Some c1aim that entrepreneurs are actually rational risk avoiders. RobertBlOckhaus was one of the seminal researchers in this area. If you go back and look at what heactually did, you would get quite a different perspective. He showed, using a psychologicaltesting instrument, that for a sample of the general public and one consisting of small businesspersons/entrepreneurs the scores were Normally distributed and there was no statisticaldifference between the sample means. Some entrepreneurs and small business persons actuallyscored relatively high on risk taking. The problem with attributing "moderate" risk takingbehavior to entrepreneurs on the basis of such research is that entrepreneurs surely are theoutliers in any societal sample. We aIl know that on the average most samples come out 10portray characteristics that are bland. Are there no successful entrepreneurs out there whoenjoy the excitement of taking a risk, that proves 10 them that they are still alive? Bygrave hasargued that classical statistical methods are inappropriate for studying entrepreneurs for thisvery reason. 1 think we need 10 reconsider many weil accepted findings that are based onsimilar central tendency seeking methodologies.

How many other seminal works are there out there that need reconsideration andperhaps replication? The kind of research we need is illustrated by large study "National StudyOf Business Start-ups" coordinated by Paul Reynolds, the current Paul T, Babson Professor atBabson. It is my impression that it wiII recover familiar ground by coIIecting data moremeticulously and by encouraging the design of secondary analyses that are more grounded intheoretical frameworks and valid research methodology. 1 think one of the study's greatpotentials is the replication or reexamining of previous conventional wisdom. 1 hope we willengage in many more research efforts like this. ln Canada this study will be affiliated with theUBC research group lead by Rafael Amit and a group of researchers that will be organized bythe Canadian Council for Small Business and Entrepreneurship.

Jean-Marie Toulouse taught me a new saying yesterday. "On cache sous le tapis,sachent que cette encore sous le tapis". We need to look again what is really under the carpet.

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May be by going back we can also recover some of the energy and passion that some of usso called pioneers were fortunate enough to experience. Entrepreneurship is too exciting aphenomena to be relegated to blandness.

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