Entrepreneurship Theory and Practice | Questions

Running head: ENTREPRENEURSHIP THEORY AND PRACTICE
ENTREPRENEURSHIP THEORY AND PRACTICE
Name of the student
Name of the university
Author’s note

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Table of Contents
Question 1(a)...................................................................................................................................2
Entrepreneurial opportunities......................................................................................................2
Opportunity creation and opportunity discovery.........................................................................2
Similarities between opportunity creation and opportunity discovery........................................3
Differences between opportunity creation and discovery...........................................................4
Opportunity exploitation..............................................................................................................6
Question 1b......................................................................................................................................7
Entrepreneurial orientation..........................................................................................................7
Reflection.....................................................................................................................................8
References......................................................................................................................................10

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Question 1(a)
Entrepreneurial opportunities
Entrepreneurial opportunities are the situations or conditions where products and services
can be sold at higher prices than the cost of production. It is described as a situation where
entrepreneurs can make profits. There are different schools of thought concerning entrepreneurial
opportunities. The economic school of thought says that the distribution of information and
knowledge concerning the availability of resources gives rise to entrepreneurial opportunities.
The other school of thought that is cultural cognitive says that the presence of cultural resources
and environmental ambiguity determines the existence of entrepreneurial opportunities. The
socio-political school explains that the network and structure of politics have a significant role in
defining entrepreneurial opportunities (Maine, Soh and Dos Santos 2015).
Opportunity creation and opportunity discovery
Opportunity creation is defined as the efforts made by entrepreneurs for creating newer
means to create new market orders and applications. The entrepreneurs develop an approach to
recognize the available opportunities in the market. So that they can be benefitted from the
existing opportunities and can make changes to the existing product or develop new products to
adapt to the market and create sustainability of the business. This will help the business to meet
the market expectations of the entrepreneurs (Fairlie and Fossen 2018).
Opportunity discovery- opportunity discovery is a process that involves the generation of ideas
and innovative strategy for forming the potential opportunities. After finding out different
opportunities, it involves identifying the most effective opportunity so that business can utilize
those opportunities for its growth and development (Jarvenpaa and Välikangas 2014).

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Similarities between opportunity creation and opportunity discovery
Handling Market imperfections
Entrepreneurs have the capability to reverse the effects of negative trends present in the
business environment. They can lead the business to the next industrial revolution. Big
businesses suffer pressure from the government to improve the business profession. There are
certain market imperfections present in the environment that degrades the business performance.
The entrepreneurs see it as an opportunity through which they can introduce a new product or
service in the market and can show the new entrepreneurship. The entrepreneurs who are capable
of identifying the market imperfections as opportunities create sustainability and long term
growth for their business. Some of the market imperfections are, : Firms are not perfectly
efficient, externalities exist in the market, imperfect pricing mechanism and imperfect
distribution of information. Thus it can be concluded that both discovery and creation of
opportunity helps to minimize the degradation by the market competition so are similar to each
other in this aspect (Foss and Klein 2017).
Evaluation and exploitation process
Entrepreneurs always in seek of new opportunities either they create it or discover it. One
type of entrepreneurs always tries to find out the existing opportunities in the market which is not
seen by others yet. These entrepreneurs are proactive than others. While another type of
entrepreneurs think that without innovations, opportunity cannot be seen in the market.they think
that there is nothing to discover in the market rather every opportunity is created. However, in
both cases, opportunity cannot be beneficial for the company until it is evaluated and exploited
(Gümüsay 2018). The entrepreneur first evaluates the opportunity. In this process, the
entrepreneur finds out information regarding the availability and usage of resources that will help

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the business to create more profit. The exploitation process helps to determine that the resources
which are needed for utilizing the opportunity can be accessed and controlled by the business.
Thus the process of evaluation and exploitation is the second step after the primary step of
creation or discovery of the resources. The ways of evaluation and exploitation remain similar in
both the concepts of opportunity that is creation or discovery (Santos 2018).
Similar drivers and dimensions
As per the study conducted by (Zahra 2008), when an opportunity is created, it develops
a platform for the discovery of many other opportunities in the future. There are different drivers
and dimensions for developing the business model on the basis of opportunity. The drivers used
for developing the model are Commercial, Technological, Societal and Legal. The examples of
dimensions used for developing the model are Profit, Proposition, Process, People, and Place.
Both the drivers and dimensions help to initiate the business process on the new business idea
which is created or discovered. The process of opportunity business model remains similar in the
creation as well as the discovery of business opportunities (Prandelli, Pasquini and Verona
2016).
Differences between opportunity creation and discovery
1. Subjective vs. objective
There are much difference between opportunity creation and opportunity discovery as per
many researches and studies. One of the differences is in the formation style of both the
elements. The creation of opportunity is the subjective approach by the entrepreneur while
opportunity discovery is the objective approach as it demands the practical efforts from the side
of the entrepreneur. The opportunities which are created to enhance the efficiency of the present
mechanism of producing goods involves the creation of values and thus is subjective in nature

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until the real value is created. The opportunity which is already existing but their existence is not
to anyone. These are termed as the discovery of opportunities and involves the creation of profit
objectively whenever their existence is known (Jamali 2018).
Endogenous and Exogenous characteristics
The discovery of opportunity is exogenous and the creation of opportunity is endogenous
in its approach. There is always a controversy between the two approaches and the entrepreneurs
have to follow the middle path to achieve successful entrepreneur action. The opportunities
creation views the opportunities endogenously which are drawn by the efforts of the
entrepreneurs. They create the opportunities by separating the existing markets or industries from
their actions for creating the new opportunities the discovery of opportunities are exogenous as
the opportunities are developed by exploiting the present resources available to the company and
seeks for resources available outside. The entrepreneurs who use discovery consider and predicts
the systematic risk so that they can make complete and stable strategies and collects resources
from the external resources for raising capital funds while the entrepreneurs who use creation for
developing opportunities use inductive, innovative and iterative decision making and depends on
internal resources. The discovery theory of the opportunities assumes that the opportunities are
already present like physical and natural resources of the environment. However, they are yet to
be discovered (García, Deserti and Teixeira 2017).
The need for Actions and Reaction
Thus the discovery of entrepreneurial opportunities is independent of the actions. On the
other hand, creation theory assumes that the actions and reactions of the entrepreneurs are very
important. The entrepreneurs create opportunities by their innovative strategy for developing

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new products and services in the market. As per (Baker and Nelson, 2005), opportunities cannot
be created without the innovative actions of the entrepreneur thus it is the process of action and
reaction both (Randerson, Degeorge and Fayolle 2016).
Uncertainty (creation) versus risk (discovery)
The creation of opportunity consists of the uncertainty of future performance. The
creation of a totally new idea contains lots of fear about the reaction of the stakeholders of the
business. This is because no one has done work on the idea until now. There is no information
available that can tell whether the creation of opportunity should be made or not. For example-
Amazon when started selling books online, was a creation of opportunity. No one has sold books
online on a large digital platform. it involved a lot of uncertainty about the futures market. The
entrepreneur remains in a dilemma of whether to create the opportunity or not (Mühlbauer and
Heinrich 2018).
The discovery of opportunities consists of high risk. The risk can be of customer reaction,
market acceptance, availability of resources for production, etc. the opportunity in case of
discovery already exists in the market. This is the presence of risk that other entrepreneurs except
the discovery entrepreneurs have not worked on the discovered opportunities.
Moreover, the discovery of opportunity shows an incremental shift in the existing
business of the organization while the creation of opportunity while creation opportunity is
always an untried concept for developing the market share.
Opportunity exploitation
It means the overall activities organized and performed by the entrepreneur to improve
the economic benefits in the form of profit and growth of business after discovering or creating

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any new opportunity. Three strategies that can be used in the effective exploitation of
opportunities are discussed below:
Networking- entrepreneurial networking encourages the entrepreneur to identify and create
opportunities for the growth of the business. Social networking helps to affect employee relations
so that they can also create rational thinking for exploiting the opportunity. Through better
networking, employees can develop creativity and new learning techniques (Pittaway, Aïssaoui
and Fox 2017).
Legitimacy- it can help an entrepreneur to strengthen the legal identity of his business. Through
this strategy, the entrepreneur can influence the perception of the stakeholders. This will help
them to develop the trust of the stakeholders and they will no longer question the legitimacy of
entrepreneurial action while exploitation of the opportunity.
Alliance formation- It helps the entrepreneurs to access the resources that firms do not have
currently for exploiting the opportunities or to produce new products by forming a legitimate
alliance. It helps the entrepreneurs to come up as global leaders by improving their capabilities
and expertise (Su and Chen 2018).
Question 1b
Entrepreneurial orientation
Entrepreneurial orientation is a concept that shows executives are developing new
strategies so that new opportunities can be exploited. It refers to some elements, which are
processes, practices and decision-making practices of the entrepreneurs (Eshima and Anderson
2017).
The level of orientation can be understood by the five dimensions which are given below;

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Autonomy- It refers to the freedom & the individual of the organization to develop
entrepreneurial ideas. An organization which provides a high level of autonomy, newer ideas of
innovation and discovery comes from the individual. It discourages corporate bureaucracy (Foss
and Klein 2017)
Competitive Aggressiveness- The style of directly challenging the existing competition of the
market is termed as competitive Aggressiveness. It means huge expenses are being incurred on
marketing activities as well as improving the quality of the goods (Wales 2016)
Innovativeness- It involves the practice of creativity and experimentation. It means adding new
innovative quantities to improve the organization's existing system.
Moreover, with the help of innovation business can make new products and services
which will be different from the existing line of the products and thus provides a competitive
advantage to the entrepreneurs
Pro-activeness- It is the perspective of the entrepreneurs to grab opportunities whenever they
find it to fulfil the future market demand. It believes in gaining the first-mover advantage by
making the first effort.
Risk-Taking- It believes in taking risks and always in search of newer opportunities where they
can take the risk and gain higher profit then the normal profit. Entrepreneurs have the risk-taking
capabilities because they assume the future demand and do the production of goods and services
in advance taking the risk for future (Mohamadi 2019)
Reflection
I am doing my graduation from Oxford University. Many times, it happens that we are
given assignments to use our critical thinking. I follow my innovative approach and use new

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ideas to complete my assignments so that I get goods marks. Moreover, I try to be proactive at
my classroom studies and clear my every doubt concerning the assignment in the class only. It
helps me complete the task efficiently without any interruption in the future.
Moreover, I always try to apply full autonomy to work on my projects. I consider that
whenever I have the freedom to choose the articles and journals to study and wider options to
gain & apply knowledge, I learn more because I am involved in one of my interesting areas.
Thus in all my projects, I try to apply all my three skills, which are proactiveness,
innovativeness, and autonomy.The autonomy to apply a wide range of theories and ideas in my
college assignments help me to learn the concept in depth.
During my exams also, all these qualities helped me a lot to be well prepared before my
exams. It reduces my last time efforts. One should always use interpersonal skills to gain
efficiency and effectiveness for completing one's projects. I think all these qualities are going to
benefit my professional career also. I have resolved to improve these skills by incorporating
these skills in my personal as well as professional life too.

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References
Maine, E., Soh, P.H. and Dos Santos, N., 2015. The role of entrepreneurial decision-making in
opportunity creation and recognition. Technovation, 39, pp.53-72.
Fairlie, R.W. and Fossen, F.M., 2018. Opportunity versus necessity entrepreneurship: Two
components of business creation.
Jarvenpaa, S.L. and Välikangas, L., 2014. Opportunity creation in innovation networks:
Interactive revealing practices. California Management Review, 57(1), pp.67-87.
Foss, N.J. and Klein, P.G., 2017. Entrepreneurial discovery or creation? In search of the middle
ground. Academy of Management Review, 42(4), pp.733-736.
Gümüsay, A.A., 2018. Unpacking entrepreneurial opportunities: an institutional logics
perspective. Innovation, 20(3), pp.209-222.
Santos, C.J.O., 2018. Can we model the entrepreneurial opportunity using both discovery and
creation theory?.
Prandelli, E., Pasquini, M. and Verona, G., 2016. In user's shoes: An experimental design on the
role of perspective taking in discovering entrepreneurial opportunities. Journal of Business
Venturing, 31(3), pp.287-301.
Jamali, B., MohammadKazemi, R., Farsi, J. and Dehkordi, A., 2018. Theories of opportunity
creation and effective entrepreneurial actions in opportunity creation context. Decision Science
Letters, 7(4), pp.443-454.

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García, L.M., Deserti, A. and Teixeira, C., 2017. Entrepreneurial design: the role of design as
driver of entrepreneurial opportunity generation and assessment. International Journal of
Entrepreneurship and Innovation Management, 21(1-2), pp.64-85.
Randerson, K., Degeorge, J.M. and Fayolle, A., 2016. Entrepreneurial opportunities: how do
cognitive styles and logics of action fit in?. International Journal of Entrepreneurship and Small
Business, 27(1), pp.19-39.
Pittaway, L., Aïssaoui, R. and Fox, J., 2017. Social constructionism and entrepreneurial
opportunity. Chapter in: Philosophical Reflexivity in Entrepreneurship, Forthcoming.
Su, C.J. and Chen, Y.A., 2018. Risk assessment for global supplier selection using text mining.
Computers & Electrical Engineering, 68, pp.140-155.
Foss, N.J. and Klein, P.G., 2017. Entrepreneurial discovery or creation? In search of the middle
ground. Academy of Management Review, 42(4), pp.733-736.
Wales, W.J., 2016. Entrepreneurial orientation: A review and synthesis of promising research
directions. International Small Business Journal, 34(1), pp.3-15.
Eshima, Y. and Anderson, B.S., 2017. Firm growth, adaptive capability, and entrepreneurial
orientation. Strategic Management Journal, 38(3), pp.770-779.
Mohamadi, A., 2019. Entrepreneurial Opportunity Exploitation under Different Institutional
Settings.
Mühlbauer, A. and Heinrich, R., 2018. Opportunity Recognition, Evaluation and Exploitation in
the Context of Prototyping.

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