Reconceptualizing Entrepreneurial Performance: The Creation and Destruction of Value from a Stakeholder Capabilities Perspective
Although scholars have long known that entrepreneurship involves the interaction of countless individuals beyond the entrepreneur, traditional performance metrics are limited to capturing the economic value that is created for shareholders. Multiple scholars have suggested that it should be possible to develop a more complete assessment that is able to simultaneously capture both the economic and non-economic consequences of entrepreneurship that exist for the broader network of firm stakeholders. The purpose of this paper is to provide a more nuanced understanding of entrepreneurial performance by operationalizing the concept of stakeholder capabilities. Building on concepts from stakeholder theory and the human development and capability approach in welfare economics, we argue that the pursuit of entrepreneurial opportunities can either create or destroy value for multiple stakeholders, and that this value is best conceived in terms of increases and decreases in individual capabilities (social, psychological, economic, physiological and intellectual). Approaching entrepreneurial performance from a stakeholder capabilities lens has implications for how we view entrepreneurs’ impact on society, what we mean by the creation and destruction of “value,” and how we define failure and success in entrepreneurship.
KeywordsEntrepreneurship Performance Value creation Stakeholder capabilities
We would like to thank Saras Sarasvathy, Sankaran Venkatarman, Ed Freeman, Alex Naar, Jessica Jones and multiple anonymous reviewers for their valuable comments on previous versions of this manuscript.
This article was not funded by any specific grants from any specific institution.
Compliance with Ethical Standards
Conflict of interest
Ishrat Ali declares that he has no conflict of interest. Griffin W. Cottle declares that he has no conflict of interest.
This article does not contain any studies with human participants or animals performed by any of the authors.
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