Skip to main content
SpringerLink
Log in

Entrepreneurial cognition and behavior in the discovery and creation of international opportunities

  • Published:
Journal of International Entrepreneurship Aims and scope Submit manuscript

Abstract

Opportunities have become central to the field of international entrepreneurship (IE), but empirical exploration of the concept and its processes is still in its infancy. Based on case studies of 12 internationalizing New Zealand businesses, this paper unpacks the opportunity construct and distinguishes between discovery, which in essence refers to cognitive dimensions of potential opportunities, and their actualization or creation through cognitive refinement and entrepreneurial action. Hence, it provides a distinctive way of navigating the discovery/creation debate, with its competing ontological positions. It also identifies the role of entrepreneurial imagination as a significant cognitive source of opportunity discovery alongside knowledge.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. Discovery theory emerged from Austrian economics to explain the tendency of market processes toward equilibrium, and has been absorbed in entrepreneurship literature. Kirzner (1985, p. 12) postulated that market processes tended toward equilibrium as a result of a continuous entrepreneurial discovery process that was not dependent on systematic, deliberate search or sheer luck. Instead, the entrepreneurial discovery process was, according to Kirzner (1997, p. 72) driven by a natural alertness of entrepreneurs to “available (but hitherto overlooked) opportunities.”

  2. Shane and Venkataraman (2000, p. 218) later adopted this definition in delineating the field of entrepreneurship, but (inexplicably) dropped the notion of opportunities as created. The IE definitions of Zahra and George (2002) and Oviatt and McDougall (2005) also omitted opportunity creation.

References

  • Alvarez SA, Barney JB (2007) Discovery and creation: alternative theories of entrepreneurial action. Strateg Entrep J 1(1-2):11–26

    Article  Google Scholar 

  • Alvarez SA, Barney JB, Young SL (2010) Debates in entrepreneurship: opportunity formation and implications for the field of entrepreneurship. In: Acs ZJ, Audretsch DB (eds) Handbook of entrepreneurship research, international handbook series on entrepreneurship. Springer, New York

    Google Scholar 

  • Andersson S (2011) International entrepreneurship, born globals and the theory of effectuation. J Small Bus Enterp Dev 18(3):627–643

    Article  Google Scholar 

  • Ardichvili A, Cardozo R, Ray S (2003) A theory of entrepreneurial opportunity identification and development. J Bus Ventur 18(1):105–123

    Article  Google Scholar 

  • Audretsch D, Van der Horst R, Kwaak T, Thurik R (2009) First section of the annual report on EU small and medium-sized enterprises. EIM Bus Policy Res 1–46

  • Babbie E (2007) The practice of social research, 11th edn. Thomson Higher Education, Belmont

    Google Scholar 

  • Baron RA, Ward TB (2004) Expanding entrepreneurial cognition’s toolbox: potential contributions from the field of cognitive science. Enterp Theory Pract 28(6):553–574

    Article  Google Scholar 

  • Bell J, McNaughton R, Young S (2001) ‘Born-again global’ firms: an extension to the ‘born global’ phenomenon. J Int Manag 7:173–189

  • Bilkey WJ, Tesar G (1977) The export behavior of smaller sized Wisconsin manufacturing firms. J Int Bus Stud 3:93–98

  • Boggs DL (1986) A case study of citizen education and action. Adult Educ Q 37(1):1–13

    Article  Google Scholar 

  • Buchanan JM, Vanberg V (1991) The market as a creative process. Econ Philos 7(1):167–186

    Article  Google Scholar 

  • Bygrave W, Hofer C (1991) Theorizing about entrepreneurship. Enterp Theory Pract 16(2):13–22

    Google Scholar 

  • Cameron A, Massey C (1999) Small and medium-sized enterprises: a New Zealand perspective. Addison Wesley, Auckland

    Google Scholar 

  • Caves RE (1982) Multinational enterprise and economic analysis. Cambridge University Press, Cambridge, MA

  • Chandra Y, Styles C, Wilkinson I (2009) The recognition of first time international entrepreneurial opportunities: evidence from firms in knowledge-based industries. Int Mark Rev 26:30–61

    Article  Google Scholar 

  • Chiari G, Nuzzo ML (1996) Psychological constructivisms: a metatheoretical differentiation. J Constr Psychol 9:163–184

    Google Scholar 

  • Chiles TH, Vultee DM, Gupta VK, Greening DW, Tuggle CS (2010) The philosophical foundations of a radical Austrian approach to entrepreneurship. J Manag Inq 19(2):138–164

    Google Scholar 

  • Christensen P, Madsen O, Peterson R (1994) Conceptualizing entrepreneurial opportunity recognition. In: Hills G (ed) Marketing and entrepreneurship: research ideas and opportunities. Quorom Books, Westports

    Google Scholar 

  • Commission of the European Communities (2003) Commission recommendation 06 May 2003 concerning the definition of micro, small and medium-sized enterprises. Off J Eur Union 124:36–41

    Google Scholar 

  • Coombs JE, Sadrieh F, Annavarjula M (2009) Two decades of international entrepreneurship research: what have we learned—where do we go from here? J Int Entrep 13:23–64

    Google Scholar 

  • Coviello NE, Munro H (1997) Network relationships and the internationalization process of small software firms. Int Bus Rev 6(4):361–386

    Article  Google Scholar 

  • Coviello NE, McDougall PP, Oviatt BM (2011) The emergence, advance and future of international entrepreneurship research—an introduction to the special forum. J Bus Ventur 26:625–631

    Article  Google Scholar 

  • Covin JG, Slevin DP (1989) Strategic management of small firms in hostile and benign environments. Strateg Manag J 10:75–87

    Article  Google Scholar 

  • Creswell JW (1998) Qualitative inquiry and research design: choose among five traditions. Sage, Thousand Oaks

    Google Scholar 

  • Crick D (2009) The internationalization of born global and international new venture SMEs. Int Mark Rev 26(4/5):453–476

    Article  Google Scholar 

  • Crick D, Spence M (2005) The internationalization of high performing UK high-tech SMEs: a study of planned and unplanned strategies. Int Bus Rev 14(2):167–185

    Article  Google Scholar 

  • De Clercq D, Sapienza HJ, Yavuz RI, Zhou L (2012) Learning and knowledge in early internationalization research: past accomplishments and future directions. J Bus Ventur 27(1):143–165

    Article  Google Scholar 

  • De Koning A (2003) Opportunity development: a socio-cognitive perspective. In: Katz J, Shepherds D (eds) Advances in entrepreneurship, firm emergence and growth: cognitive approaches to entrepreneurship research, vol 6. Elsevier, Oxford, pp 265–314

    Chapter  Google Scholar 

  • Eckhardt JT, Shane SA (2003) Opportunities and entrepreneurship. J Manag 29(3):333–349

  • Eisenhardt KM (1989) Building theories from case study research. Acad Manag Rev 14(4):532–550

    Google Scholar 

  • Endres AM, Woods CR (2007) The case for more “subjectivist” research on how entrepreneurs create opportunities. Int J Entrep Behav Res 13(4):223–234

    Article  Google Scholar 

  • Eriksson K, Johanson J, Majkgard A (1997) Experiential knowledge and cost in the internationalization process. J Int Bus Stud 28(2):337–360

    Article  Google Scholar 

  • Etemad H (2013) Introduction and overview. In: Etemad H (ed) The process of internationalization in emerging SMEs and emerging economies. Edward Elgar, Cheltenham, pp 1–36

    Chapter  Google Scholar 

  • Etemad H, Wilkinson I, Dana LP (2010) Internetization as the necessary condition for internationalization in the newly emerging economy. J Int Entrep 8(4):319–342

    Article  Google Scholar 

  • Figueira-de-Lemos F, Johanson J, Vahlne JE (2011) Risk management in the internationalization process of the firm: a note on the Uppsala model. J World Bus 46(2):143–153

    Article  Google Scholar 

  • Foss NJ, Klein PG (2010) Entrepreneurial alertness and opportunity discovery: origins, attributes, critique. In: Landstrom H, Lohrke F (eds) Historical foundations of entrepreneurship research. Edward Elgar, Northampton

    Google Scholar 

  • Foss NJ, Klein PG (2012) Organizing entrepreneurial judgment: a new approach to the firm. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Gaglio CM, Katz JA (2001) The psychological basis of opportunity identification: entrepreneurial alertness. Small Bus Econ 16(2):95–111

    Article  Google Scholar 

  • Gartner W, Carter N, Hills G (2003) The language of opportunity. In: Steyaert C, Hjorth D (eds) New movements in entrepreneurship. Edward Elgar, Cheltenham, pp 103–124

    Google Scholar 

  • Geertz C (1973) The interpretation of cultures. Basic Books, New York

    Google Scholar 

  • Gereffi G, Humphrey J, Sturgeon T (2005) The governance of global value chains. Rev Int Polit Econ 12(1):78–104

    Article  Google Scholar 

  • Giamartino GA, McDougall PP, Bird BJ (1993) International entrepreneurship: the state of the field. Enterp Theory Pract 18:37

    Google Scholar 

  • Grant P, Perren L (2002) Small business and entrepreneurial research: meta-theories, paradigms and prejudices. Int Small Bus J 20:185–211

    Article  Google Scholar 

  • Hansen DJ, Shrader R, Monllor J (2011) Defragmenting definitions of entrepreneurial opportunity. J Small Bus Manag 49(2):283–304

    Article  Google Scholar 

  • Hesse-Biber SN, Leavy P (2004) Approaches to qualitative research: a reader on theory and practice. Oxford University Press, Oxford

    Google Scholar 

  • Jantunen A, Puumalainen K, Saarenketo S, Kylaheiko K (2005) Entrepreneurial orientation, dynamic capabilities and international performance. J Int Entrep 3:223–243

    Article  Google Scholar 

  • Jennings PL, Perren L, Carter S (2005) Guest editors’ introduction: alternative perspectives on entrepreneurship research. Enterp Theory Pract 29:145–152

    Article  Google Scholar 

  • Johanson J, Mattson LG (1988) Internationalization in industrial systems—a network approach. In: Hood N, Vahlne JE (eds) Strategies in global competition. Croom Helm, London, pp 287–314

    Google Scholar 

  • Johanson J, Mattsson LG (1992) Network positions and strategic action: an analytical framework. In: Axellson B, Easton G (eds) Industrial networks: a new view of reality. Routledge, London, pp 205–217

    Google Scholar 

  • Johanson J, Vahlne J (1977) The internationalization process of the firm—a model of knowledge development and increasing foreign market commitment. J Int Bus Stud 8:23–32

    Article  Google Scholar 

  • Johanson J, Vahlne J (2006) Commitment and opportunity development in the internationalization process: a note on the Uppsala internationalization process model. Manag Int Rev 46(2):165–178

    Article  Google Scholar 

  • Johanson J, Wiedersheim-Paul F (1975) The internationalization of the firm: four Swedish cases. J Manag Stud 12(3):305–322

    Article  Google Scholar 

  • Jones MV, Coviello NE (2005) Internationalization: conceptualizing and entrepreneurial process of behaviour in time. J Int Bus Stud 36(3):284–303

    Article  Google Scholar 

  • Jones MV, Coviello NE, Tang YK (2011) International entrepreneurship research (1989–2009): a domain ontology and thematic analysis. J Bus Ventur 26(6):632–659

    Article  Google Scholar 

  • Kaish S, Gilad B (1991) Characteristics of opportunities search of entrepreneurs versus executives: sources, interests, and general alertness. J Bus Ventur 6:45–61

    Article  Google Scholar 

  • Keupp MM, Gassmann O (2009) The past and the future of international entrepreneurship: a review and suggestions for developing the field. J Manag 35(3):600–633

    Google Scholar 

  • Kirzner IM (1973) Competition and entrepreneurship. University of Chicago Press, Chicago

    Google Scholar 

  • Kirzner IM (1979) Perception, opportunity, and profit. University of Chicago Press, Chicago

    Google Scholar 

  • Kirzner IM (1985) Discovery and the capitalist process. University of Chicago Press, Chicago

    Google Scholar 

  • Kirzner IM (1995) The subjectivism of Austrian economics. In: Meijer G (ed) New perspectives on Austrian economics. Routledge, London, pp 11–22

    Google Scholar 

  • Kirzner IM (1997) Entrepreneurial discovery and the competitive market processes: an Austrian approach. J Econ Lit 35:60–85

    Google Scholar 

  • Klein PG (2008) Opportunity discovery, entrepreneurial action, and economic organization. Strateg Entrep J 2(3):175–190

    Article  Google Scholar 

  • Knight GA, Cavusgil ST (1996) The born global firm: a challenge to traditional internationalization theory. Export internationalizing research—enrichment and challenges. In: Cavusgil ST, Madsen TK (eds) Advances in international marketing, vol 8. JAI Press, New York, pp 11–26

    Google Scholar 

  • Knight GA, Cavusgil ST (2004) Innovation, organizational capabilities, and the born-global firm. J Int Bus Stud 35:124–141

    Article  Google Scholar 

  • Krueger NF Jr (2003) The cognitive psychology of entrepreneurship. In: Acs ZJ, Audretsch DB (eds) Handbook of entrepreneurship research. Kluwer Academic, London

    Google Scholar 

  • Lachmann LM (1976) From Mises to Shackle: an essay on Austrian economics and the kaleidic society. J Econ Lit 14(1):54–62

    Google Scholar 

  • Lachmann LM (1977) Capital, expectations, and the market process: essays on the theory of the market economy. Sheed Andrews and McMeel, Kansas City

    Google Scholar 

  • Lumpkin GT, Dess GG (1996) Clarifying the entrepreneurial orientation construct and linking it to performance. Acad Manag Rev 21:135–172

    Google Scholar 

  • Madsen TK, Servais P (1997) The internationalization of born globals: an evolutionary process. Int Bus Rev 6(6):561–583

    Article  Google Scholar 

  • Mainela T, Puhakka V, Servais P (2014a) Call for papers for thematic special issue on International Opportunities in International Entrepreneurship

  • Mainela T, Puhakka V, Servais P (2014b) The concept of international opportunity in international entrepreneurship: a review and a research agenda. Int J Manag Rev 16(1):105–129

    Article  Google Scholar 

  • March JG (1978) Bounded rationality, ambiguity, and the engineering of choice. Bell J Econ 9(2):587–608

    Article  Google Scholar 

  • Mason J (2002) Qualitative researching, 2nd edn. Sage, London

    Google Scholar 

  • McDougall PP (1989) International versus domestic entrepreneurship: new venture strategic behavior and industry structure. J Bus Ventur 4:387–399

    Article  Google Scholar 

  • McDougall PP, Oviatt BM (1997) International entrepreneurship literature in the 1990s and directions for future research. In: Sexton DL, Smilor RW (eds) Entrepreneurship 2000. Upstart, Chicago, pp 291–320

    Google Scholar 

  • McDougall PP, Oviatt BM (2000) International entrepreneurship: the intersection of two research paths. Acad Manag J 43(5):902–906

    Article  Google Scholar 

  • McDougall PP, Oviatt BM, Shrader RC (2003) A comparison of international and domestic new ventures. J Int Entrep 1(1):59–82

    Article  Google Scholar 

  • Mitchell RK, Busenitz LW, Bird B, Gaglio CM, McMullen JS, Morse EA, Smith JB (2007) The central question in entrepreneurial cognition research. Enterp Theory Pract 31(1):1–27

    Article  Google Scholar 

  • Moini H, Tesar G (2005) The internet and internationalization of smaller manufacturing enterprises. J Glob Mark 18(3-4):79–94

    Article  Google Scholar 

  • Oviatt BM, McDougall PP (1994) Toward a theory of international new ventures. J Int Bus Stud 25(1):45–64

    Article  Google Scholar 

  • Oviatt BM, McDougall PP (1995) Global start-ups: entrepreneurs on a worldwide stage. Acad Manag Exec 9(2):30–43

    Google Scholar 

  • Oviatt BM, McDougall PP (2005) Defining international entrepreneurship and modeling the speed of internationalization. Enterp Theory Pract 29(5):537–553

    Article  Google Scholar 

  • Oyson MJ (2010) Opportunity-based approach to international entrepreneurship: an integrative approach to small firm internationalization. 13th McGill International Entrepreneurship Conference. McGill University, Montreal

    Google Scholar 

  • Oyson MJ, Whittaker H (2010) Creativity and prospection: creating and exploiting opportunities for international entrepreneurship. Acta Tech Corveniensis 4:125–131

    Google Scholar 

  • Patton MQ (2002) Qualitative research & evaluation methods, 3rd edn. Sage, Thousand Oaks

    Google Scholar 

  • Perry C, Riege A, Brown L (1999) Realism’s role among scientific paradigms in marketing research. Ir Mark Rev 12(2):16–23

    Google Scholar 

  • Porter ME (1990) The competitive advantage of nations. The Free Press, New York

    Google Scholar 

  • Punch K (1998) Introduction to social research: quantitative and qualitative approaches. Sage, London

    Google Scholar 

  • Raskin JD (2002) Constructivism in psychology: personal construct psychology, radical constructivism, and social constructionism. In: Raskin JD, Bridges SK (eds) Studies in meaning: exploring constructivist psychology. Pace University Press, New York, pp 1–25

    Google Scholar 

  • Sarasvathy SD, Dew N, Velamuri SR, Venkataraman S (2003) Three views of entrepreneurial opportunity. In: Acs ZJ, Audretsch DB (eds) Handbook of entrepreneurship research: an interdisciplinary survey and introduction. Springer, New York

    Google Scholar 

  • Schweizer R, Vahlne JE, Johanson J (2010) Internationalization as an entrepreneurial process. J Int Entrep 8:343–370

    Article  Google Scholar 

  • Servais P, Zucchella A, Palamara G (2006) International entrepreneurship and sourcing: international value chain of small firms. J Euromarketing 16(1):105–117

    Google Scholar 

  • Shackle GLS (1949) Expectation in economics. Cambridge University Press, Cambridge

    Google Scholar 

  • Shackle GLS (1972) Epistemics and economics: a critique of economic doctrines. Cambridge University Press, Cambridge

    Google Scholar 

  • Shane S (2000) Prior knowledge and the discovery of entrepreneurial opportunities. Organ Sci 11(4):448–469

    Article  Google Scholar 

  • Shane S, Venkataraman S (2000) The promise of entrepreneurship as a field of research. Acad Manag Rev 25(1):217–226

    Google Scholar 

  • Short JC, Ketchen DJJ, Shook CL, Ireland RD (2010) The concept of “opportunity” in entrepreneurship research: past accomplishments and future challenges. J Manag 36(1):40–65

    Google Scholar 

  • Singh RP (2000) Entrepreneurial opportunity recognition through social networks. Garland, New York

    Google Scholar 

  • Snow MS (2002) Competition as a discovery procedure. Q J Austrian Econ 5(3):9–23

    Article  Google Scholar 

  • Stake RE (2003) Case studies. In: Denzin NK, Lincoln YS (eds) Strategies of qualitative inquiry. Sage, Thousand Oaks, pp 134–164

    Google Scholar 

  • Stevenson HH, Jarillo JC (1990) A paradigm of entrepreneurship: entrepreneurial management. Strateg Manag J 11(Summer Special Issue):17–27

    Google Scholar 

  • Sturgeon TJ, Memedovic O (2010) Mapping global value chains: intermediate goods trade and structural change in the world economy (working paper). United Nations Industrial Development Organization, Development Policy and Strategic Research Branch, Vienna

    Google Scholar 

  • Swanborn PG (2010) Case study research: what, why and how? Sage, London

    Google Scholar 

  • Vaughn K (1994) Austrian economics in America: the migration of a tradition. Cambridge University Press, New York

    Book  Google Scholar 

  • Venkataraman S (1997) The distinctive domain of entrepreneurship research: an editor’s perspective. In: Katz J, Brockhaus R (eds) Advances in entrepreneurship, firm emergence, and growth, vol 3. JAI Press, Greenwich, pp 119–138

    Google Scholar 

  • Venkataraman S, Sarasvathy SD (2001) Strategy and entrepreneurship: outlines of an untold story. In: Hitt MA, Freeman RE, Harrison JS (eds) The Blackwell handbook of strategic management. Blackwell, Oxford, pp 650–668

    Google Scholar 

  • Venkataraman S, Sarasvathy SD, Dew N, Forster WR (2012) Reflections on the 2010 AMR decade award: whither the promise? Moving forward with entrepreneurship as a science of the artificial. Acad Manag Rev 37(1):21–33

    Google Scholar 

  • Viney LL (1992) Social science research in the 1990s: the contribution of constructivism. Int J Constr Psychol 5:295–305

    Google Scholar 

  • Welch L, Luostarinen R (1988) Internationalization—evolution of a concept. J Gen Manag 80:190–207

    Google Scholar 

  • Whittaker DH, Byosiere P, Momose S, Morishita T, Quince T, Higuchi J (2009) Comparative entrepreneurship: the UK, Japan and the shadow of Silicon Valley. Oxford University Press, Oxford

    Book  Google Scholar 

  • Wright RW, Etemad H (2001) SMEs and the global economy. J Int Manag 7:151–154

    Article  Google Scholar 

  • Wright RW, Ricks DA (1994) Trends in international business research: twenty-five years later. J Int Bus Stud 25(4):687–701

    Article  Google Scholar 

  • Yates FE (1978) Complexity and the limits to knowledge. Am J Physiol Regul Integr Comp Physiol 235(5):R201–R204

    Google Scholar 

  • Yin RK (2003) Applications of case study research, 3rd edn. Sage, London

    Google Scholar 

  • Zahra SA (2008) The virtuous cycle of discovery and creation of entrepreneurial opportunities. Strateg Entrep J 2:243–257

    Article  Google Scholar 

  • Zahra SA, George G (2002) International entrepreneurship: the current status of the field and future research agenda. In: Hitt MA, Ireland RD, Camp SM, Sexton DL (eds) Strategic entrepreneurship: creating a new mindset. Blackwell, Oxford, pp 255–288

    Google Scholar 

  • Zahra SA, Korri JS, Yu J (2005) Cognition and international entrepreneurship: implications for research on international opportunity recognition and exploitation. Int Bus Rev 14(2):129–146

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Business and Law, Central Queensland University, Brisbane Campus, 160 Ann Street, Brisbane, QLD, 4000, Australia

    Manuel Jose Oyson III

  2. School of Interdisciplinary Area Studies, University of Oxford, 12 Bevington Road, Oxford, OX2 6LH, UK

    Hugh Whittaker

Authors
  1. Manuel Jose Oyson III
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Hugh Whittaker
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Manuel Jose Oyson III.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Oyson, M.J., Whittaker, H. Entrepreneurial cognition and behavior in the discovery and creation of international opportunities. J Int Entrep 13, 303–336 (2015). https://doi.org/10.1007/s10843-015-0156-6

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10843-015-0156-6

Keywords

Search

Navigation