The intersection of entrepreneurship and strategic management is evident and logical, but discussions on shared topics do not necessarily appease the debate over what is
entrepreneurship and what is strategic management. We believe it is time to move beyond
“intersection” conversations. But, we do not advocate the extreme view of integrating the fields. Although no discipline can effectively function in isolation, we feel that the integration of the fields of strategic management and entrepreneurship will weaken the ability to describe, explain, and predict their respective business phenomena of interest.
We do, however, recognize contributions that each field can provide the other.
Furthermore, we acknowledge the changing business environments in which
organizations compete and strategic management's attempt to create dynamic models to assist firms in this new competitive landscape.
Rather than intersection or integration, we offer an alternative view – that of an interface.
Is this just an argument in semantics? We think not. Consider for a moment the following definitions from Webster's Dictionary:
Intersection: The place or area where two or more things intersect; the set of elements common to two sets.
Integration: To form or blend into a whole; to unite with something else.
Interface: A surface forming a common boundary of two bodies, spaces, or phases; the place at which independent systems meet and act on or communicate with each other.
The Entrepreneurship-Strategic Management Interface (ESMI) establishes boundaries for the fields working together. Entrepreneurship is ultimately about creation and strategic management is predominantly about the process to achieve above-average performance via competitive advantage. It would be illogical to look at creation without looking at the outcome of such creation whether this is wealth creation, job creation, profitability, sales growth, or other similar outcome proposed byMorris (1998). Regardless, all of these
“outcomes” are performance measures. So, rather than continuously thrashing out what field should research which topics (intersection), use what dependent variable and at what
level of analysis, let us move to an interface view that illustrates our common boundaries.
Figure 2.2 graphically depicts our view of the Entrepreneurship-Strategic Management Interface (ESMI).
Figure 2.2 indicates that entrepreneurship and strategic management do not intersect.
Rather, the size of the firm under study (small/large) and the research focus
(creation/performance) creates the spaces in which the fields communicate – the interface.
Large corporations benefit from entrepreneurship (A) (e.g., corporate entrepreneurship) and large corporations obviously benefit from strategic management (C) (e.g., corporate performance and shareholder wealth); small and medium-sized enterprises (SMEs) benefit from entrepreneurship (B) (e.g., new venture creation), and new ventures and SMEs can certainly benefit from strategic management (D) (e.g., growth and
performance). This line of thinking aligns well with those that believe entrepreneurship should be embraced and encouraged by all organizations (Brown and Eisenhardt, 1998;
Meyer and Heppard, 2000;McGrath and MacMillan, 2000).
Figure 2.2 The entrepreneurship-strategic management interface
The strategic management literature seems to lack research in the “D” space which, as indicated earlier in the chapter, is where the greatest economic impact is found in terms of job creation (Birch, 1987). Given the evolution of both fields, the size difference is a
valid issue. Early views of entrepreneurship acknowledged only the new firm and small business. Likewise, the strategic management focus was on the large, multidivisional organization. Because strategic management scholars historically studied large
established firms, new or emerging enterprises were virtually ignored in the mainstream strategy literature. With the exception of corporate entrepreneurship studies (e.g.,
Burgelman, 1983;Kuratko, Montagno, and Hornsby, 1990;Garud and Van de Ven, 1992;
Zahra, 1996;Shrader and Simon, 1997), entrepreneurial firm performance has primarily been the domain of the entrepreneurship field.
Our content analysis found that of the 952 empiricalSMJarticles that make some reference to firm size (even if only the type of firms sampled), 97 percent focused on large firms (as defined by greater than 500 employees – the Small Business
Administration standard) while only 3 percent were SMEs. In fact, of the firms
empirically studied in theSMJarticles, over 90 percent were of theFortune500 type. We further found that of the 349 empiricalJBVarticles, only 33 percent focused on large firms with 67 percent addressing small businesses and SMEs. Correcting for only those firms with management issues, that is firms with employees, the total number of US firms is approximately 5 million (Aldrich, 1999). However, over 95 percent of all empirical strategic management research represents less than 1 percent of the total population (Dennis, 1997;Aldrich, 1999). Strategy researchers are virtually ignoring the
performance aspects of small businesses, and inclusive in that set are new ventures. There are roughly 850,000 US de novo startup firms each year (Dennis, 1997). These new ventures create almost all new net jobs (Birch, 1987;Kirchhoff and Phillips, 1988) and a better understanding of their performance is needed. Strategic management's
preoccupation with the largest corporations leaves over 99 percent of America's firms unexamined in the context of success or failure (Aldrich, 1999;Dennis, 1997). We
encourage more strategic management scholars to recognize the necessity and importance of studying these types of firms.
The ESMI (Figure 2.2) is where we believe creation connects with performance. If we acceptVenkataraman's (1997)definition of entrepreneurship as the development, creation, and exploitation of future goods and services and theHitt et al. (2001)definition of
strategic management as a process of commitment, decision making, and action to achieve competitive advantage, then it becomes more convincing that the interface is a creation-performance connection. We acknowledge that the “exploitation” aspect of Venkataraman's definition seems indicative of strategy; however, the difference lies in his emphasis on “future” goods and services. How do you exploit something that does not exist in the present? If a product or service will not be created until some undetermined point in the future, market absence and creation must be explained (Arrow, 1974;
Venkataraman, 1997). According to Venkataraman:
Cognitive conditions, incentives, and creative processing vary among individuals and these differences matter. These variables strongly influence the search for and
exploitation of an opportunity, and they also influence the success of the exploitation process.
(1997: 124)
The ESMI connects the two fields bounded by four research spaces. As seen on figure 2.2, spaces labeled “A” and “B” represent the creation spaces and spaces labeled “C” and “D”
represent the performance side of the interface. “A” can be viewed as corporate
entrepreneurship or the creation of internal ventures, innovation in large firms, and new product development in large firms. “B” and “C” are representative of the traditional view of each field. New venture creation fills most of the “B” space while typical
strategic management concepts (e.g., process, content, diversification, alliances, mergers, TMTs) occupy the “C” space. As previously indicated, the “D” space is the most under- researched aspect of the interface. This area is most concerned with the strategy and resulting performance of SMEs, whereas the “C” space is most concerned with large corporate performance.
We are not suggesting specific topic areas to study; however, our content analysis ofSMJ andJBVdoes partly focus on research topics to illustrate that the four spaces of the ESMI do exist.Figure 2.3 and table 2.2 report our findings. Our results indicate that only 3.5 percent (A + B) of articles published inSMJ hadsome type of entrepreneurship interface component. Conversely, 44 percent (C + D) of articles published inJBVhad some type of strategic management interface component. Additionally, only 3.5 percent ofSMJarticles used small or emerging business as the size of firm studied, but 50 percent of theJBV articles as expected had researched small or emerging firms.
Figure 2.3 The entrepreneurship-strategic management interface: content analysis results The ESMI is somewhat imbalanced when looking at the top journal in each field. It is apparent that entrepreneurship is particularly accepting of strategic management research but the reverse is not true. A reason for this may be due to the so-called lack of rigor and theory in entrepreneurship that opens the door for other fields to question the legitimacy, acceptability, and contribution of entrepreneurship research (Schendel, 1990). It is evident that each field can benefit the other, and given the maturity of the strategic management field, strategy scholars interfacing with entrepreneurship could greatly contribute to the progression and legitimacy of the entrepreneurship field.
Table 2.2 Content analysis results
Designation from figures 2.2 and 2.3
InterfaceaContent analysis topics
% of articles published SMJb
% of articles in published inJBVc
A ENT×LB
corporate entrepreneurship;
innovation in large firms; new product development in large firms
3.0 14.5
Designation from figures 2.2 and 2.3
InterfaceaContent analysis topics
% of articles published SMJb
% of articles in published inJBVc
B ENT×SB
new venture creation, new product development in small firms,
innovation in small firms, opportunity recognition
0.5 20.0
C SM×LB
strategy process and content, formulation and implementation, TMTs, diversification, mergers, acquisitions, alliances technology management, global strategy, control and reward systems, goals and objectives, corporate performance
83.0 14.0
D SM×SB
new venture performance and
strategy, small business performance and strategy, growth, small business strategic factors and resources
3.0 30.0
Non- interface
ENT (other)
research issues, entrepreneurship education, venture capitalists' decision processes,
traits/characteristics of entrepreneurs, definition and domain issues, societal impact and wealth creation
0.5 21.0
SM (other)
policy, teaching in the field, research
issues, definition and domain issues 10.0 0.5