Strategic Entrepreneurship: Creating Values Essay

Hitt, MA, Ireland, RD, Sirmon, DG & Trahms, CA 2011, ‘Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society’, Academy of Management Perspectives, vol. 2, pp. 57-75.

Hitt, Ireland, Sirmon, and Trahms (2011) focused on the topic of strategic management and entrepreneurship and their contributions to strategic entrepreneurship (SE) in their journal article. The authors observed that the foci of SE are wide and productive because they are derived from various fields of specialization, including psychology, economics, and sociology, as well as other subdisciplines in management such as organizational behavior and organizational theory.

Hitt et al. (2011) used another past model of SE to provide a framework for their study. They then formulated an input-process-output model to enhance the comprehension of the SE framework. The authors analyzed “resource inputs into strategic entrepreneurship such as people knowledge and skills” (Hitt et al. 2011, p. 57). Furthermore, they evaluated resource processes, which are considered useful for SE. Finally, the authors looked at outcomes, which include creating values for customers, wealth for stockholders and enhancing user advantages, specifically for the larger society. Entrepreneurs have the benefits of obtaining financial wealth in addition to other outcomes, including “personal satisfaction and attainment of personal goals like self-actualization” (Hitt et al. 2011, p. 57). These elements are also considered as equally important for entrepreneurs. Overall, Hitt et al. (2011) have included several other outcomes that they believe could motivate entrepreneurs to create value and wealth.

In this article, Hitt et al. (2011) probe the fundamental academic question with critical practical relevance in the present and future economic prevailing situations. Specifically, the authors dwell on the issue of creating value and sustain competitive advantage as the last goal for strategic management and entrepreneurship in organizations. At the same time, firms must also strive to identify and exploit emerging opportunities. Hitt et al. (2011) argue that the issue of creating value, sustaining competitive advantage, identifying new opportunities and exploiting them is the fundamental question on which strategic entrepreneurship is based. Thus, strategic entrepreneurship is the link between strategic management and entrepreneurship.

Moreover, strategic entrepreneurship concentrates on seeking advantages and opportunities to create value for stakeholders, firms and/or society. This implies that strategic entrepreneurship focuses on all processes that ensure the exploitation of present advantages while simultaneously allowing firms to explore new opportunities and sustain competitive advantage for value creation over a significant period. In this regard, the need to comprehend how new firms can attain and sustain success by relying on competitive advantages and how well established firms can evolve more entrepreneurial drive the strategic entrepreneurship framework.

Hitt et al. (2011) have used past studies on strategic management and entrepreneurship to build their model on strategic entrepreneurship. The authors have observed that studies on strategic entrepreneurship started in the early 21^st century. By taking on the available literature, they noted that the first strategic entrepreneurship model developed had four major elements, including

1. “the entrepreneurial mindset, culture, and leadership,
2. the strategic management of organizational resources,
3. application of creativity, and
4. development of innovation” (Sirmon & Hitt, 2003, p. 58).

Further studies, however, have identified limitations of the initial strategic entrepreneurship model developed by Sirmon and Hitt. Other academics, for instance, have argued that the SE model did not have adequate vigor needed to demonstrate all the elements of the strategic entrepreneurship (Kyrgidou & Hughes, 2010). Recent research has indicated that strategic entrepreneurship is wider in scope, consists of several levels and is highly dynamic than was initially presented (Shepherd, 2011).

On this note, Hitt et al. (2011) extended the initial strategic entrepreneurship model to include other levels and wider domains. The new strategic entrepreneurship model accounted for environmental factors, management of resources during strategic entrepreneurship processes to create sustainable value, and it explains other various outcomes. Hence, it offers a more comprehensive view of strategic entrepreneurship. Specifically, the new strategic entrepreneurship model covers resource orchestration and related distinct outcomes. The results are valuable, and they have provoked further scholarly studies to broaden the understanding and provide its relevance and application in firms.

Hitt et al. (2011) present several ideas based on the strategic entrepreneurship model. First, the authors have noted that strategic management and entrepreneurship are two diverse disciplines, which provide unique chances for academics to conduct further inquiry and offer insights that could be used to inform managerial and entrepreneurial practices and, therefore, it was necessary to determine the link between the two disciplines.

From the literature review conducted by Hitt et al. (2011), they established that the core aim of strategic management is to create competitive advantages and returns or wealth for stakeholders. The corporate strategy encompasses organizational decisions, which are developed based on the goal of attaining specific objectives considered as fundamental to organizational stakeholders. Strategic management reflects various decisions, commitments, and actions needed in an organization to ensure that it achieves strategic competitiveness and performs above the industry average in terms of returns. Primarily, strategic management has strongly focused on profit maximization as its positive effect on a company. Hence, researchers must be able to demonstrate factors responsible for performance differential in an industry. Most importantly, firms can only create value and achieve competitive advantage through strategic management when they learn how to achieve, package, and leverage their distinctive resources.

Second, Hitt et al. (2011) also looked at entrepreneurship. The authors noted that entrepreneurship is an evolving field that lacks a precise definition. According to their literature review, Hitt et al. (2011) observed that entrepreneurship entails “sources of opportunities; the processes of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit opportunities” (p. 59). Specifically, Hitt et al. (2011) asserted that the definition of entrepreneurship focused on the creation of wealth as a major outcome. The process of wealth creation involves the utilization of distinct bundles of resources from various individuals that can be exploited in the industry. The process of wealth creation, however, requires an entrepreneur to create value first. Creating value requires entrepreneurs to be innovative and leverage their skills to exploit emerging opportunities and develop new products that appeal to a specific market. In addition, Hitt et al. (2011) viewed value creation as the act of achieving financial, social or personal outcomes that are more than all costs incurred during acquisition. Hence, the primary purpose of entrepreneurship is to create wealth.

Finally, Hitt et al. (2011) introduced the concept of strategic entrepreneurship and its various components, including the model. As previously mentioned, strategic management and entrepreneurship are concepts for value and wealth creation for stakeholders. The fundamental factor for entrepreneurs is the ability to identify opportunities for exploitation in a given industry. Strategic management must be able to create a competitive advantage and, thus, create wealth and value. These factors ensure that a company can compete in any industry.

Hence, entrepreneurship focuses on “identifying and exploiting opportunities while strategic management entails developing and sustaining competitive advantage to exploit the identified opportunities” (Hitt et al. 2011, p. 59). This implies that strategic management and entrepreneurship concentrate on organizational growth, value creation for customers and wealth creation for investors. One major aspect of strategic entrepreneurship is that it enlarges the scope of organizational wealth creation outcomes to reach several stakeholders, including a larger society.

Strategic entrepreneurship ensures that senior executives and managers can simultaneously concentrate both issues of advancing the available competitive advantage through strategic management while focusing on opportunities as components of entrepreneurship and, therefore, they can create future competitive strategies for value and wealth creation (Grant et al. 2014). Overall, the role of strategic entrepreneurship is to ensure that larger organizations are more entrepreneurial while it challenges small companies to become strategic in their operations (Charles, Ojera, & Oima, 2015).

Hitt et al. (2011) created the strategic entrepreneurship model based on input, process, and output. The authors used the initial strategic entrepreneurship model to develop their model. Specifically, they introduced other environmental, organizational and individual factors into the dynamic elements that occur simultaneously when firms seek new opportunities and take advantage of existing ones. It is expected that such behaviors that drive organizations should create value for all stakeholders.

The strategic entrepreneurship model presented by Hitt et al. (2011) focuses on three areas, including “resources/factor inputs, resource orchestration processes, and outputs” (p. 59). The initial dimension of resources identifies the model’s process inputs at various levels. It accounts for factors related to the environment, the firm and individuals. External environments have abilities to affect organizational performances, and firms must overcome such challenges through their strategies (Gupta & Guha, 2013). Organizational resources, including cultures and senior executives (effective leadership), are perhaps the most distinctive elements required for advancement while human capital and social factors should also drive strategic entrepreneurship (Hubbard, Rice, & Galvin, 2015).

The second part of the model looks at various actions or processes in an organization. These processes or actions involve orchestration of a firm’s resources and entrepreneurial actions, which are applied to identify and exploit available resources while at the same time exploring new opportunities that can create value for a company. All these actions notably take place within an organization. Acquiring resources, leveraging actions for organizational growth, bundling resources and value creation and appropriation are significant processes that lead to intended outcomes (De Wit & Meyer, 2010).

The last part of the model focuses on outcomes. Hitt et al. (2011) identified values created for organizations, society, and individuals. These values, however, differ significantly across levels. The expected outcomes here are primarily beneficial to society, knowledge, wealth and opportunity advancement. Outcomes should drive innovation and development of new technologies as organizational benefits (Yadav & Goyal, 2015). In all, any entrepreneurial activities should facilitate the creation of new economic, cultural, social and institutional conditions to ensure maximum benefits to all stakeholders.

Hitt et al. (2011) derived their key conclusion on the strategic entrepreneurship model. They noted that the model consists of an array of the knowledge base. Strategic entrepreneurship draws its knowledge constituents from various disciplines, specifically from strategic management and entrepreneurship. Innovation has a critical role in larger organizations. In addition, entrepreneurial actions, which aim for economic growth, are also important while strategic management creates vital value to ensure the strength and success of strategic entrepreneurship.

Hitt et al. (2011) showed that studies on strategic entrepreneurship and other relevant elements have continued to increase in the 21^st century, as evident in the current journal articles. The researchers have noted that further improvements are expected in the next decade. Hitt et al. (2011) claimed that their study and the strategic entrepreneurship model act as a base to support and propose a vigorous variety of opportunities to enhance further studies about the effective application of entrepreneurship and all advantages derived by all stakeholders.

Strengths and Weaknesses of the Article

An article by Hitt et al. (2011) has several strengths. First, the authors have clearly identified strategic entrepreneurship as the issue they intended to discuss in their article. A clear purpose of the article allows readers to understand the value of the study by following explanations, past studies used, interpretation, analysis, discussion, and conclusions. Consequently, readers can make a value judgment about the content of the article. Second, the authors build their article on past research. By acknowledging the initial model of strategic entrepreneurship, various definitions of strategic management and entrepreneurship provided by different authors and highlighting other past studies, Hitt et al. (2011) depicted a high-level of academic honesty in their research. Besides, the past studies used in this article cover various periods of strategic management and entrepreneurship. Third, one must also evaluate the language used in the article.

In this article, the use of vocabulary and construction of sentences are suitable because they have ensured that the article remains neutral based on diction and terms of the study. Thus, no emotions or personal bias has been identified in the article. Finally, Hitt et al. (2011) also presented their major conclusion on strategic entrepreneurship. Most importantly, the conclusion of the article has been supported by analyses and evidence from other relevant articles. In this regard, there are minimal chances of overlooking any relevant facts of the study. One can conclude that the authors have accomplished their objectives of building a new strategic entrepreneurship model. Moreover, Hitt et al. (2011) also noted that their study would provide a base and support for further studies in strategic entrepreneurship because it is an evolving field, which borrows significantly from other disciplines.

While the article has covered the most relevant issues, some inherent weaknesses have also been noted. First, this article is not an original work or a primary study. That is, the authors used available literature to develop it. Hence, it does not add any new knowledge other than compiling and consolidating other studies. Second, the numbers of sources used in this article are simply astounding. Too many to the extent that a more casual reader will be simply overwhelmed by the large number of works cited and other related details. Third, this article lacks the normal structure used in many scientific journals. For instance, there is no clearly identified method used in the study.

Therefore, readers must deduce the method applied in the article. Finally, it is imperative for an article to raise new issues and potential areas for future studies. However, Hitt et al. (2011) have raised so many unanswered questions in their article. Such questions should have answers to show readers how to use new knowledge implied. For instance, the authors raised questions about possible effects of poorly developed formal institutions on entrepreneurs’ decision to start a business; the effect of different societal norms, values, and beliefs on entrepreneurship and exploitation of resources; and influences of institutions on the exploitation of social networks. In addition, Hitt et al. (2011) raised questions about the various effects of forms of institutions on entrepreneurial activities and values associated with the strategic entrepreneurship for competing firms in informal or formal economies.

Any reviewers of this article can only wait and look forward if the authors will investigate these questions and demonstrate the applications of the discovered knowledge.

Practical Implications of the Authors’ Findings

Hitt et al. (2011) observed that organizations could use strategic management and entrepreneurship processes to exploit opportunities and identify new ones, eliminate or take advantage of ambiguity and uncertainties in markets and develop values and wealth. In essence, organizations must recognize the role of strategic management as creating and exploiting competitive advantages in their respective industries.

As firms seek to operate globally, they face the challenges of making ethical decisions and the relevance of recognizing customers to ensure successful operations. These factors influence strategies, which are implemented to create and exploit competitive advantages.

Hitt et al. (2011) encourage entrepreneurs to recognize available opportunities and effectively exploit them through the established organizational competitive advantages for value and wealth creation.

In addition, the authors challenge organizations to recognize that strategic entrepreneurship should allow them to use knowledge and abilities in their prevailing business environments as they seek new opportunities to exploit across time through new, enhance skills and capabilities.

Hitt et al. (2011) claimed that organizations should use strategic entrepreneurship to attain a balance between behaviors that focus on opportunities (entrepreneurship) and other activities that concentrate on taking advantage (strategic management).

In addition, the authors noted that even not-for-profit entrepreneurial organizations must create and sustain their competitive advantage strategies.

Overall, the authors noted that strategic entrepreneurship is important throughout an organizational lifetime. Hence, it should not only be linked with large, mature firms, but also small innovative ventures. Thus, strategic entrepreneurship mainly depicts a strong focus on value creation, which can only be achieved when firms adopt both opportunities focused activities and actions that take advantage of available opportunities simultaneously.

Reference List

Charles, NA, Ojera, PB & Oima, D 2015, ‘Factors influencing choice of strategic management modes of small enterprises’, Journal of Innovation and Entrepreneurship, vol. 4, p. 4. Web.

De Wit, B & Meyer, R 2010, Strategy: process, content, context, 4th edn, Thompson, London.

Grant, R, Butler, B, Orr, S & Murray, P 2014, Contemporary strategic management: An Australasian Perspective, Wiley, Milton, QLD.

Gupta, PD & Guha, S 2013, ‘Firm growth and its determinants’, Journal of Innovation and Entrepreneurship, vol. 2, p. 15. Web.

Hitt, MA, Ireland, RD, Sirmon, DG & Trahms, CA 2011, ‘Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society’, Academy of Management Perspectives, vol. 2, pp. 57-75.

Hubbard, G, Rice, J & Galvin, P 2015, ‘Strategic management: thinking, analysis, action, Pearson, Melbourne.

Kyrgidou, LP & Hughes, M 2010, ‘Strategic entrepreneurship: origins, core elements and research directions’, European Business Review, vol. 22, no. 1, pp. 43 – 63. Web.

Shepherd, DA 2011, ‘Multilevel Entrepreneurship Research: Opportunities for Studying Entrepreneurial Decision Making’, Journal of Management, vol. 37, pp. 412–420.

Sirmon, DG & Hitt, MA 2003, ‘Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms’, Entrepreneurship Theory and Practice, vol. 27, no. 4, pp. 339–358.

Yadav, V & Goyal, P 2015, ‘User innovation and entrepreneurship: case studies from rural India’, Journal of Innovation and Entrepreneurship, vol. 4, p. 5. Web.