Entrepreneurship: Creating theories for the sake of theory alone

Performance bonus pay: The carrot and the stick of salaried employment
5th May 2019

Entrepreneurship: Creating theories for the sake of theory alone

Anyone who is interesting in the search for knowledge knows that the world of science is filled with terms and labels for one thing or another, which attempt to describe the various phenomena researchers and scholars of entrepreneurship have identified. The process of knowledge and theory creation is useful as it puts ideas into context that in turn helps the human brain to store, process and comprehend the information.

"In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge."

Ikujiro Nonaka

Those who are in the business of reading exhaustively academic articles published in peer-reviewed journals, such as PhD students and university professors (i.e. Drs, Profs, etc), cannot fail to see that terms sometimes are coined for the sake of the coinage itself. It is true that every researcher would hope to have her/his name associated with some term that will make headlines. However, there is a certain neologism-driven part of the research that seeks to add new buzz-words to the dictionary of entrepreneurship, for the sake of fame rather than knowledge.

Who is the scholar who wouldn’t want to be the next Cantillon or Inglehart? Instead of a e pluribus unum this endeavour gives rise to a problem of dividing and naming the parts of the same thing again and again, to a point where it becomes counterproductive and nonsensical (Putnam, 2007). Entrepreneurship scholars should not fall in the same trap where many economists fell in the past, where theory was not created for the advancement of the understanding of economic phenomena, but for the advancement of the careers of economists among their peers. A theory of entrepreneurial phenomena should be driven by its relevance to the entrepreneur and not to the theorist (Kieser, Nicolai, and Seidl, 2015).

"Despite the interesting insights both bodies of literature provide, progress in this area of research is seriously hampered by the fragmentation of the research and the lack of scientific rigor that characterizes many of the studies it comprises."

Alfred Kieser, Alexander Nicolai and David Seidl

Moreover, this -theory creation- can be questionable from a philosophical perspective since concepts and ideas do not manifest in the form of a deus ex machina. The entrepreneur, for example, existed independently of Cantillon’s identification and description, and the entrepreneurial activity was taking place, and would continue to do so, had not Inglehart named it so. Descriptions and labels of phenomena are useful for understanding them, as long as they are useful. This may sound like a tautology (and probably is), but this is a growing problem with the myriad terms that spring out in the literature by all the aspiring Cantillons and Ingleharts.

Where terms such as intrapreneur and entrepreneur are very helpful in extending the understanding of the distinct phenomena previously understudied because of the under-identification of their distinct features, terms like govepreneur or enviropreneur (nice fancy made up terms I just coined) offer little more that some hope of pointless narcissistic vanity of term-coinage.

Additionally, there also seems to be a hype in labeling and naming of entrepreneurship research areas with the prefix "entrepreneurial". A reader of journals and books concerned with entrepreneurship is likely to bump on few of such grand labelings. I might be wrong, but take for example the emergence of entrepreneurial marketing; I cannot keep wondering if it is that marketing became entrepreneurial suddenly or this era’s entrepreneurs use the new tools available to them better than the past generation of entrepreneurs. In that sense, can we talk about “entrepreneurial production”, or “entrepreneurial communication” or "entrepreneurial finance" simply because new businesses use fully automated production systems or machine learning instant messaging platforms or crowdfunding. Wasn't the entrepreneur of the 1980s and 1990s, who was spotting all the empty spaces in town and filling them with advertisements entrepreneurial enough? How many innovations were there in that era that were first invented and then successfully marketed to consumers (e.g. touchscreen phones and tablets, and mp3 players)? Entrepreneurs have always been entrepreneurial in doing things, that is the point of having an entrepreneurial mindset.

The continuous fragmentation of concepts can exaggerate the distinct features of sub-concepts to the point where new labels and terms will offer very little in furthering the understanding of the phenomena, but add needless perplexity of the phenomena. Like the Kings and Emperors of old, who all fancied having their face on the shiny golden coins of their kingdoms/empires, the average scholar also seems to fancy having her/his name on a similar kind of ‘coin’. These scholars hope that the process of idea generation will lead to an increase in their status quo, failing to realise that their research output is becoming less and less relevant to the entrepreneur or the practitioner manager (Perea and Brady, 2017).

"An academic reward system that places emphasis on research will tend to further foster rigorous research activity directed at other academics. The danger is that this research will become increasingly less relevant to practitioners and to the business world that these same academics observe."

Perea, Eva; Brady, Malcolm

It is hard to say where the line in the continuous dichotomisation of knowledge becomes a drawback rather than an advantage, or which new strand of theory truly deepens our understanding of a phenomenon, but some terms seem more useful than others, while some only add confusion. As Williamson (2000, p.595) commented "we need to sort the sheep from the goats".

"...we need to sort the sheep from the goats. That is accomplished by asking each would-be theory to advance refutable implications to which the data are applied."

Oliver E. Williamson

References

Kieser, A., Nicolai, A. and Seidl, D., 2015. The practical relevance of management research: Turning the debate on relevance into a rigorous scientific research program. The Academy of Management Annals, 9(1), pp.143-233.

Nonaka, I. and Konno, N., 1998. The concept of “Ba”: Building a foundation for knowledge creation. California management review, 40(3), pp.40-54.

Perea, E. and Brady, M., 2017. Research rigor and the gap between academic journals and business practitioners. Journal of Management Development, 36(8), pp.1052-1062.

Putnam, R.D., 2007. E pluribus unum: Diversity and community in the twenty‐first century the 2006 Johan Skytte Prize Lecture. Scandinavian political studies, 30(2), pp.137-174.

Williamson, O.E., 2000. The new institutional economics: taking stock, looking ahead. Journal of economic literature, 38(3), pp.595-613.

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