Chapter 6: Prior Knowledge, Potential Financial Reward, and Opportunity Identification
In a rapidly changing world, organizations need to continually identify new oppor-tunities beyond existing competencies if they are to survive and prosper (Hamel & Prahalad, 1989; McGrath, Tsai, Venkataraman, & MacMillan, 1996). The identificationof opportunities has been recognized as one of the most important abilities of successfulentrepreneurs (Ardichvili, Cardozo, & Ray, 2003) and consequently has become animportant element of the scholarly study of entrepreneurship. Gaglio and Katz (2001, p. 95) contend that “understanding the opportunity identification process represents oneof the core intellectual questions for the domain of entrepreneurship.” Recent researchinto resource-based theory has extended its boundaries to include identification of oppor-tunities as a resource that, through the process of exploitation, can lead to competitiveadvantage (Alvarez & Busenitz, 2001). Not surprisingly there has been considerableinterest in why, when, and how some people are able to identify opportunities, whileothers cannot or do not (Shane & Venkataraman, 2000).
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