Prescriptive Entrepreneurship

Prescriptive Entrepreneurship

James O. Fiet

In the only known programme of prescriptive entrepreneurship, James Fiet provides a marked contrast to the standard descriptive focus of entrepreneurship studies. Instead of the anecdotally based pedagogies that have dominated the teaching of entrepreneurship (and which do not control for luck-based success), the author lays out a programme of research to develop and test theoretically derived guidelines for how to improve the success rate and performance of aspiring entrepreneurs. Rather than describing what entrepreneurs do, he prescribes and tests what they ought to do.

Chapter 2: A Theoretical Basis for Prescriptive Entrepreneurship

James O. Fiet

Subjects: business and management, entrepreneurship


Key ideas This chapter examines how entrepreneurs can search deliberately for discoveries, which then becomes an important focus of a prescriptive approach to entrepreneurship. The main element in this search model is a consideration set, which imposes constraints on how and where entrepreneurs search. A “consideration set” is a promising set of information channels, which entrepreneurs can select and search based on prior knowledge. To decide how to search the channels in a consideration set, this chapter applies existing mathematical formalism to illustrate a maximal search sequence. Because there is some probability that a search sequence could continue indefinitely, it determines stopping rules. It argues that entrepreneurial search is more feasible within a consideration set than it is in the rest of the world. INTO THE UNKNOWN Entrepreneurs launch ventures in the face of uncertain or incomplete information, sometimes regarding markets that do not yet exist. As a result, there is no obvious way for them to know that their ventures will succeed solely by observing their proximate circumstances, which suggests that prescriptive approaches should be welcomed. In the absence of a guiding theory, they may attempt to clarify uncertainty regarding the search for opportunities and their exploitation by finding more information. If the outcome of their searching were known or predictable, they could manage the search process using the most efficient form of governance. However, in many entrepreneurial settings the distribution of outcomes is simply unknowable, which raises the question of whether their searching for information is...

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