The entrepreneurial function: is it always embodied in one person?

e t ep e eu ; his a tio a d the e i o e t, the fi st step is to e a le to ide tif the e t ep e eu . In order to do so, we have to go back to our definition of entrepreneurship. Innovative entrepreneurship is defined as the actions of exploiting an opportunity of innovation from the time of conception through the time of firm creation and its early infancy. Thus the entrepreneur is the one fulfilling these actions, which we also refer to as the entrepreneurial

function. The entrepreneur must therefore have two main activities, the activity consisting of

identifying and taking the steps to develop and exploit the opportunity of innovation and also the organising function of firm creation. The entrepreneur is therefore identified through activities performed, such as opportunity recognition, exploitation, and the organisation process resulting and following firm creation. Thus the identification of the entrepreneur depends on the activities he performs.

During its early days, the entrepreneurship literature envisioned that the entrepreneurial fu tio as e odied i a si gle pe so . The e t ep e eu as see as a supe -agent U e e s h ho ould ide tif oppo tu ities othe s ould ot see, fi d eans of exploiting them no one else could do and, in addition had extraordinary persuasive powers and conviction thrusting him into a position of leadership as others became involved in his enterprise.

17 _{The explanation of the choice for high-tech sector and biotech firms are explained in detail in Chapter 2 and}

45 However, in more recent literature, it has been acknowledged that the exceptional talent required to fulfil this entrepreneurial function is rarely found in a single individual. The entrepreneurial function could then be fulfilled by different people cooperatively Ga ud & Ka ře 2003; Gartner et al. 1994; Burger-Helmchen 2008). Starting from Schumpeter in his later work, he acknowledges that:

The e t ep e eu ial fu tio a e a d ofte is filled o-operatively. With the development of the large scale corporations this has evidently become of major importance: aptitudes that no single individuals combined must be built i to a o po ate pe so alit ;

Schumpeter (1951, p.256)

The difficulty for the entrepreneur is not so much in identifying the opportunity, but more in taking the decision to exploit them. Nowadays, especially in some sectors such as complex systems or science-based sectors, the exploitation of an opportunity requires many different skills or competences. The complexity of the technology, markets, environment, financial and organisational structure must all be treated, and the level of knowledge in each of these domains is crucial for the fi s p odu ti e hoi e. This p odu ti e hoi e ill i flue e its su i al a d g o th.

As a complement to the literature on entrepreneurship, the literature of organisational theories can help in this debate, especially the numerous contributions towards the understanding of management team decision taking in companies. This literature emphasises the crucial role of organisation in the company, especially in the management team, and describes the role of its members in the decision process and therefore the path of the firm. The entrepreneurial agency is here distributed to different agents, which interact in order to complete the process of making decisions. The management team in Cyert and March (1992) is see as the do i a t oalitio of individuals responsi le fo setti g fi di e tio (Wiersema and Bantel, 1992). The team therefore defi es the te h ologi al path of the fi o side i g the fi s e i o e t a d also its organisational capabilities. This literature emphasizes the roles of the top management team to lead thei o ga isatio to eate ha ge, hi h a e e epti it to ha ge , illi g ess to take isk, di e sit of i fo atio sou es a d pe spe ti es a d fi all eati e de isio aki g . These characteristics are somehow representative of the characteristics described in the entrepreneurial literature, which are the risk bearing attitude, the information asymmetry in favour of the entrepreneurial agent, the recognition of change opportunity and finally the entrepreneurial creative vision (Margarethe F. Wiersema & Bantel 1992). In the same way, the top management

team background has been recognised to be a determinant factor for the future success of all firms,

46

also in the group cohesion of the top-management team. In terms of cohesion, the firm diversity caused by backgrounds that create conflicts (to a certain extent) in a top management team might be a desirable feature (Bourgeois & Eisenhardt 1988) combined with rapidity of decision making. The constructive conflicts are more likely to be enhanced by a variety of background including industry experience. There is agreement that a diversity characteristic of the team has an influence on the firm evolution in terms of demography and experiences. There are positive and negative effects created by the diversity of firms. The good effects can mostly be seen as positive because of the fact that the diversity of backgrounds enhance the scanning of the environment (knowledge of markets and competitors) to act better in decision making processes (Glick et al. 1993). Diversity in the top- management team composition could enhance change and learning between members according to the concept of cognitive distance (Nooteboom 2000). The shared leadership has an effect on the cohesion of a firms and has a positive impact on the top management team performance and thus on the company (Ensley et al. 2003). Thus, having diversity in management teams of new companies may generate a diversity of firms, some of which have a better ability to survive in specific environments due to a better combination of competences.

The entrepreneurial function in some cases may not be fulfilled by only one agent independently. Depending on the sector of activity, on the market and organisation complexity, the entrepreneurial vision may be performed collectively or individually. The focus of this thesis is innovative entrepreneurship, especially in high-tech sectors, and the entrepreneur should therefore be able to possess the capabilities to recognise and exploit innovative opportunities but also to be able to successfully organise and manage a newly created company. Such individuals are rarely found and thus in this work we are not looking to identify a single entrepreneur in a firm but rather to identify the defined entrepreneurial functions and then look for individuals who perform such functions. Therefore, o e should ot e pe t to fi d a si gle e t ep e eu i ea h o ga isatio . In the following sections and chapter, the te i olog the e t ep e eu ill still e used, ho e e we see the entrepreneur as the individual fulfilling the entrepreneurial function at a given time, and thus we do not assume that the individual performing this action is unique. It has also been pointed out above that sector specific structure such as sectoral specificities (i.e. regulations, institutions or market specificities) is one environmental factor that affects the ability of a single agent to perform the entrepreneurial function.