Abstract
This paper examines opportunity recognition activities in a hub-governed service network. More precisely, the research questions are: How do opportunities emerge in a hub network context? and What are the activities of different network actors concerning opportunity recognition? We conducted a case study of a network of service entrepreneurs orchestrated by a hub firm, with the data consisting of 35 interviews. In this study we have explored the opportunity recognition from the perspective of both the hub firm and entrepreneurs. Firstly our analysis shows that there is a great deal of innovation potential in the grass roots of our case network. The challenge is that local improvements mostly stay local. Improving interaction might also help to identify and implement local adaptations and improvements so as to benefit the entire chain. We posit that the hub firm and network would benefit from empowering small firms’ initiatives for renewal. Secondly, in terms of the effectuation literature we have extended the analysis into the context of small firms operating in a hub network context, where elements of both causation and effectuation are evident. Firms are experiencing opportunity recognition through the causation processes observed in the hub network, while also simultaneously engaging in opportunity development through effectuation processes.
Similar content being viewed by others
References
Baker, T., & Nelson, R. E. (2005). Creating Something from Nothing: Resource Construction through Entrepreneurial Bricolage. Administrative Science Quarterly, 50, 329–366 Retrieved from Finnish information retrieval interface.
Butterfield, L. D., Borgen, W. A., Amundson, N. E., & Maglio, A.-S. T. (2005). Fifty years of the critical incident technique: 1954-2004 and beyond. Qualitative Research, 5(4), 475–497. doi:10.1177/1468794105056924.
Chesbrough, H. (2010). Business model innovation: Opportunities and barriers. Long Range Planning, 43(2–3), 354–363.
Coffey, A., & Atkinson, P. (1996). Making sense of qualitative data. Thousand Oaks: Sage.
Combs, J. G., Michael, S. C., & Castrogiovanni, G. J. (2004). Franchising: A review and avenues to greater theoretical diversity. Journal of Management, 30, 907–931.
Dhanaraj, C., & Parkhe, A. (2006). Orchestrating innovation networks. Academy of Management Review, 31(3), 659–669.
Eisenhardt, K. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550 Retrieved from Finnish information retrieval interface.
Fisher, G. (2012). Effectuation, causation, and bricolage: A behavioral comparison of emerging theories in entrepreneurship research. Entrepreneurship Theory and Practice, 36(5), 1019–1051.
George, N. M., Parida, V., Lahti, T., & Wincent, J. (2014). A systematic literature review of entrepreneurial opportunity recognition: Insights on influencing factors. The International Entrepreneurship and Management Journal. doi:10.1007/s11365-014-0347-y.
Grégoire, D. A., Barr, P. S., & Shepherd, D. A. (2010). Cognitive processes of opportunity recognition: The role of structural alignment. Organization Science, 21(2), 413–431.
Halinen, A., & Törnroos, J. A. (2005). Using case methods in the study of contemporary business networks. Journal of Business Research, 58(9), 1285–1297. doi:10.1016/j.busres.2004.02.001.
Knight, L., & Harland, C. (2005). Managing supply networks: Organizational roles in network management. European Management Journal, 23(3), 281–292.
Kraaijenbrink, J. (2008). The nature of the entrepreneurial process: causation, effectuation, and pragmatism (pp. 22–23). The Netherlands: The sixteenth annual High Tech Small Firms Conference, University of Twente, Enschede May 2008.
Landström, H., Åström, F., & Harirchi, G. (2013). Innovation and entrepreneurship studies: One or two fields of reserach? The International Entrepreneurship and Management Journal. doi:10.1007/s11365-013-0282-3.
Lusch, R. F., & Vargo, S. L. (2006). Service-dominant logic: Reactions, reflections and refinements. Marketing Theory, 6(3), 281–288.
Lusch, R. F., Vargo, S. L., & Tanniru, M. (2010). Service, value networks and learning. Journal of the Academy of Marketing Science, 38(1), 19–31.
Möller, K., Rajala, A., & Svahn, S. (2005). Strategic business nets – their type and management. Journal of Business Research, 58, 1274–1284. doi:10.1016/j.jbusres.2003.05.002.
Ng, W., & Rieple, A. (2014). Special issue on “the role of networks in entrepreneurial performance: New answers to old questions?” guest Editor’s introduction. The International Entrepreneurship and Management Journal, 10, 447–455.
O’Donnell, A., Gilmore, A., Cummins, D., & Carson, D. (2001). The network construct in entrepreneurship research: A review and critique. Management Decision, 39(3), 749–760.
Olesen, V., Droes, N., Hatton, D., Chico, N., & Schatzman, L. (2002). Analyzing together: recollections of a team approach. In A. Bryman & R. G. Burgess (Eds.), Analyzing Qualitative Data (pp. 111–128). London: Routledge. First published 1994, the Taylor & Francis e-Library.
Overholm, H. (2015). Collectively created opportunities in emerging ecosystems: The case of solar service ventures. Technovation, 39–40, 14–25.
Paasi, J., Valkokari, K., Rantala, T., Hytönen, H., Nystén-Haarala, S., & Huhtilainen, L. (2010). Innovation management challenges of a system integrator in innovation networks. International Journal of Innovation Management, 14(6), 1047–1064. doi:10.1142/S1363919610003008.
Perry, J. T., Chandler, G. N., & Markova, G. (2012). Entrepreneurial effectuation: A review and suggestions for future research. Entrepreneurship: Theory and Practice, 36(4), 837–861. doi:10.1111/j.1540-6520.2010.00435.x.
Provan, K. G., Kenis, P. (2006). Modes of network governance: structure, management and effectiveness. Working paper, Eller College of Management, University of Arizona, Tucson.
Provan, K. G., Fish, A., & Sydow, J. (2007). Interorganizational networks at the network level: A review of the empirical literature on whole networks. Journal of Management, 33(3), 479–516. doi:10.1177/0149206307302554.
Rampersad, G., Quester, P., & Troshani, I. (2010). Managing innovation networks: Exploratory evidence from ICT, biotechnology and nanotechnology networks. Industrial Marketing Management, 39, 793–805.
Read, S., Song, M., & Smit, W. (2009). A meta-analytic review of effectuation and venture performance. Journal of Business Venturing, 24, 573–587. doi:10.1016/j.jbusvent.2008.02.005.
Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency. Academy of Management Review, 26(2), 243–263 Retrieved from Finnish information retrieval interface.
Sarasvathy, S. D., & Dew, N. (2005). New market creation through transformation. Journal of Evolutionary Economics, 15, 533–565. doi:10.1007/s00191-005-0264-x.
Sarasvathy, S. D., Dew, N., Velamuri, S. R., & Venkataraman, S. (2003). Three views of entrepreneurial opportunity. In Z. J. Acs & D. B. Audretsch (Eds.), Handbook of entrepreneurship research (pp. 141–160). UK: Kluwer Law International. Printed in Great Britain.
Shane, S., & Venkataraman, S. (2000). The Promise of Entrepreneurship as a Field of Research. The Academy of Management Review, 25(1), 217–226 Retrieved from Finnish information retrieval interface.
Silverman, D. (2006). Interpreting Qualitative Data. London: Sage.
Svahn, S., & Westerlund, M. (2007). The modes of supply net management: A capability view. Supply Chain Management: An International Journal, 12(5), 369–376. doi:10.1108/13598540710776944.
Vandekerckhove, W., & Dentchev, N. A. (2005). A network perspective on stakeholder management: Facilitating entrepreneurs in the discovery of opportunities. Journal of Business Ethics, 60, 221–232. doi:10.1007/s10551-005-0130-7.
van de Ven, A. H. (1986). Central problems in the management of innovation. Management Science, 32(5), 590–607.
Venkataraman, S. (1997). The distinctive domain of entrepreneurship research. In J. Katz & R. Brockhaus (Eds.), Advances in entrepreneurship, firm emergence and growth (Vol. volume 3, pp. 119–138). Greenwich: JAI Press.
Watson, A., & Stanworth, J. (2006). Franchising and intellectual capital: A franchisee’s perspective. International Entrepreneurship and Management Journal, 2(3), 337–349.
Yin, R. K. (2009). Case study research – Design and methods, Applied social research methods series. Volume 5 (4th ed.). Thousand Oaks: Sage Publications Inc.
Acknowledgements
The authors wish to thank professors Colm O′Gorman and Ulla Hytti who have given their time and shared their ideas for this research. Our sincere gratitude also goes to the company representatives. The research has been funded by Tekes (the Finnish Funding Agency for Technology and Innovation), Turku School of Economics at the University of Turku and VTT Technical Research Centre of Finland. This article is based on a paper presented at the RENT (Research on Entrepreneurship and Small Business) Conference.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflict of interest.
Rights and permissions
About this article
Cite this article
Lepistö, T., Mäkitalo-Keinonen, T. & Valjakka, T. Opportunity recognition in a hub-governed network – insights from garage services. Int Entrep Manag J 15, 257–280 (2019). https://doi.org/10.1007/s11365-017-0439-6
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11365-017-0439-6