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2022

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06

[Paper Express] Research on the Influence Mechanism of Entrepreneur's Effect Reasoning on Enterprise Opportunity Shaping in the Great Change


Abstract:China's economy is in a period of switching between old and new kinetic energy. As an important subject to promote the growth of new kinetic energy, the efficient opportunity shaping of high-tech start-ups is the key to realize the development of enterprises. The theory of effect reasoning provides a new idea for the study of high-tech new venture opportunities in high uncertainty situations. Based on the theory of high-level echelon, the influence mechanism of entrepreneur's effect reasoning on the opportunity shaping of high-tech new ventures is analyzed. Taking 141 Chinese high-tech start-ups as samples, the empirical research finds that: entrepreneur effect reasoning positively affects the construction of enterprise relationship network and enterprise opportunity shaping; enterprise relationship network construction plays a partial intermediary role between entrepreneur effect reasoning and enterprise opportunity shaping; entrepreneurial passion not only positively regulates the relationship between entrepreneur effect reasoning and enterprise relationship network construction, it is also positively moderating the mediating effect of firm network construction between entrepreneur effect reasoning and firm opportunity shaping. The conclusion shows that under the situation of high uncertainty, passionate effect reasoning entrepreneurs can better shape opportunities by promoting the construction of enterprise relationship networks.

Based on the high-level theory as the research framework, this paper focuses on the mechanism of the effect reasoning of entrepreneurs on the opportunity shaping of high-tech start-ups, and conducts empirical tests according to 141 questionnaires of entrepreneurs. The results show that:(1) entrepreneur effect reasoning promotes the opportunity shaping of high-tech new ventures. China is in a critical period of transformation of old and new kinetic energy, high-tech start-ups need to face high uncertainty from the market, system, customers, factors, etc., effect reasoning to help start-ups more effectively use the opportunity to shape the process of high uncertainty. (2) The construction of enterprise relationship network plays an intermediary role between the effect reasoning of entrepreneurs and the opportunity shaping of new ventures. Opportunity shaping requires high resource investment, high-tech start-ups are difficult to fully meet the resource needs of opportunity shaping due to the new disadvantage, effect reasoning promotes the construction of enterprise relationship network, helps enterprises broaden the access channels of knowledge and resources, improves the diversity of resources, and then helps to shape opportunities. (3) This study also confirmed the moderating effect of entrepreneurial passion. Entrepreneurial passion can strengthen the relationship between entrepreneur effect reasoning and enterprise relationship network, and also strengthen the relationship between entrepreneur effect reasoning and enterprise opportunity shaping. That is, when the entrepreneurial passion is high, the entrepreneur's effect reasoning better promotes the construction of the enterprise relationship network, and the intermediary role of the theoretical model is stronger. However, when the entrepreneurial passion is low, the moderating effect of entrepreneurial passion on the relationship between entrepreneur effect reasoning and enterprise relationship network construction is not significant. This suggests that effects reasoning has a greater impact on entrepreneurs with high entrepreneurial passion. A reasonable explanation is that low-passion entrepreneurs are usually risk-averse and status-quo-based, and they are unwilling to take risky actions and accept challenges, so they may choose causal reasoning rather than effect reasoning to deal with external changes. In contrast, entrepreneurs with high entrepreneurial passion are considered to have high tolerance of ambiguity and strong achievement demand characteristics, and they are more inclined to adopt risky actions to deal with change under the guidance of effect reasoning. Therefore, high entrepreneurial passion can make the role of effect reasoning better play, and then promote the construction of enterprise relationship network and opportunity shaping.

The theoretical enlightenment of this paper has the following points. First, it expands the study of the factors influencing the shaping of business opportunities. Opportunity shaping is an important factor in determining the success or failure of high-tech start-ups, but we know little about how high-tech start-ups carry out dynamic opportunity shaping in high-uncertainty situations. This study enriches the research on the influencing factors of entrepreneurial opportunity shaping from the perspective of entrepreneurs. Second, it expands the research on the construction of enterprise relationship network. Entrepreneurial effect reasoning is proved to be positively related to the construction of enterprise relationship network, which expands the research on the influence of entrepreneur's cognitive factors on the construction of enterprise network relationship. In addition, the construction of enterprise relationship network is considered to be a key sensor, and the relationship between the effect reasoning of some intermediary entrepreneurs and the shaping of enterprise opportunities enriches the research on the antecedents and consequences of the construction of enterprise relationship network, and also makes a useful supplement to the internal mechanism of effect reasoning affecting the shaping of new enterprise opportunities. Third, it expands the research on the interaction between cognition and emotion in the field of entrepreneurship. This paper discusses the mechanism of the interaction between entrepreneurial passion and effect reasoning on the construction of enterprise relationship network and the shaping of enterprise opportunities, and responds to the call of previous scholars to explore the regulatory effect of more different variables on the relationship between entrepreneur characteristics and organizational output.

This study also provides implications for the practice of high-tech start-ups. First, provide guidance for entrepreneurs of high-tech start-ups. Entrepreneurs should use effects reasoning to promote business opportunity shaping in highly uncertain environments. In particular, entrepreneurs in emerging economies should pay more attention to the cultivation of their own effect reasoning and entrepreneurial passion, such as formulating targeted training plans and actively participating in training courses related to effect reasoning. Entrepreneurs can also strengthen their entrepreneurial efforts, invest more time and energy in entrepreneurial activities, enhance their role identity, and then enhance their entrepreneurial passion. Second, provide advice to policy makers. The government can set up relevant courses or training programs for entrepreneurs in the business incubator to help them cultivate effect reasoning and entrepreneurial passion. At the same time, the government can actively organize more activities for entrepreneurs and provide more opportunities to help them build a network of relationships. Third, it provides decision-making guidance for investors and other stakeholders. For example, entrepreneurs' entrepreneurial passion or effect reasoning can be used as indicators to evaluate the development potential of high-tech start-ups, and provide reference for investment decisions.

This study also has limitations. First, this paper uses cross-sectional data to analyze the static relationship between variables, and examines the vertical relationship between variables. Therefore, a longitudinal case study approach is needed in the future to capture the dynamic relationship between the variables. Second, this study only considers the moderating effect of entrepreneurial passion in the relationship between effect reasoning and enterprise relationship network construction from the perspective of entrepreneur characteristics, and future research can examine the influence of other situational factors (such as cultural and economic factors in the external environment, etc.), and constantly enrich the boundary research of enterprise relationship network construction and opportunity shaping. Third, the measurement of effect reasoning remains to be refined. Future research can increase measurement items through case interviews and other methods, continuously refine and improve the effect reasoning scale, and improve the accuracy of measurement.

 

Key words:Effect Reasoning, Relationship Network Construction, Opportunity Shaping, Entrepreneurial Passion, High-tech New Venture

 

Abstract: High-tech startups are the most active part in promoting the growth of new drivers. The survival and growth process of high-tech startups is the process of opportunity shaping, which is characterized by high innovation and high complexity. In the contexts of China emerging economies, which are characterized by high uncertainty, the uncertainty of opportunity shaping by high-tech startups with limited resources and management capacity is further increased, and the traditional forecation-oriented decision-making logic is difficult to play an effective role. In recent years, a large number of entrepreneurship research have proved that in highly uncertain contexts, entrepreneurs follow the effectuation to make decision. The effectuation theory is action-oriented. It describes how to think, make decisions and practice under uncertainty, including a series of principles such as flexibility, affordable loss, previous commitment and experiment. At present,the effectuation theory has attracted the attention of scholars in the field of entrepreneurship. However, the researchers have not explained and answered the effect of entrepreneurs′ effectuation on the opportunity shaping of high-tech startups, as well as the internal mechanism. Therefore, based on the upper echelons theory, this study discussed the influence of entrepreneurs′ effectuation on organizational opportunity shaping from the perspective of entrepreneurs, as well as the mediating effect of organizational network construction and the regulating effect of entrepreneurs′ entrepreneurial passion.

On the basis of summarizing the existing research, research models are constructed and research hypotheses are proposed. This study collected data from Shanghai and Jilin in the form of questionnaires. According to the calculation of the China Entrepreneurship Activity Index (CPEA) in the Global Entrepreneurship Observation Report, Shanghai is one of the cities with the highest degree of entrepreneurial activity, while entrepreneurial activities in Jilin are not active. This shows that there is a big difference in the degree of entrepreneurial activity between the two cities. The questionnaire requires entrepreneurs or middle-level and senior managers who have a comprehensive understanding of the actual situation of the company to fill in. A total of 400 questionnaires were distributed and 141 valid questionnaires were collected.All the items were measured using five-point Likert scales ranging from 1 to 5. 1 represented a strong disagreement, and the 5 represented a complete agreement. In this paper, Harmon single factor analysis was adopted, and the common method variation problem can be ignored.

Before data analysis, the reliability of the variables was tested using cronbach′s coefficient, and confirmatory factor analysis in the structural equation model was used to test the scale′s structural validity. The test results show that the scale of all the variables have good reliability and discriminative validity. Correlation analysis also shows that there is a strong correlation among the variables in this study. Then SPSS was used to test the research hypothesis, and the conclusions showed that: (1) entrepreneurs′ effectuation has a positive impact on organizational network construction and organizational opportunity shaping. (2) Organizational network construction plays an mediating role in the relationship between entrepreneurs′ effectuation and organizational opportunity shaping. (3) The higher the entrepreneurs′ entrepreneurial passion, the stronger the relationship between entrepreneurs′ effectuation and organizational network construction; the stronger the relationship between entrepreneurs′ effectuation and organizational opportunity shaping.

The theoretical enlightenment of this article is as follows. First, it expands the research on the influencing factors of organizational opportunity shaping. Second, it expands the research on organizational network construction,and enriches the research on the effect of entrepreneurs′ cognitive factors on organizational network construction. In addition, it has enriches the research on the causes and consequences of organizational network construction, and has also made a useful supplement to the internal mechanism of entrpreneurs′ effectuation and organizational opportunity shaping. Third, it expands the research on the interaction between cognition and emotion in the entrepreneurial field, responding to the call of previous scholars to explore the moderating effects of more different variables on the relationship between entrepreneurial characteristics and organizational outputs.

This research provides some inspiration for the practice of high-tech startups. First, the conclusions provide guidances for entrepreneurs. In highly uncertain environments, entrepreneurs should use effectuation to promote opportunities shaping. Second, the conclusions provide advice to policy makers. The government can set up relevant courses or training programs for entrepreneurs in entrepreneurial incubators to help them improve the effectuation and entrepreneurial passion. At the same time, the government can actively organize more activities for entrepreneurs, so as to provide more opportunities to help them construct network. Third, the conclusions provide decision-making guidance for investors. Entrepreneurial passion or effectuation can be used as an indicator to evaluate the development potential of high-tech startups and provide a reference for investment decisions.

This study also has some limitations. First, this study uses cross-sectional data to analyze the static relationship among the variables, and insufficiently examines the longitudinal relationship among the variables. Therefore, a longitudinal case study method is needed to capture the dynamic relationship among various variables in the future. Second, this study only considers the moderating effect of entrepreneurial passion in the relationship between entrepreneurs′ effectuation and organizational network construction from the perspective of entrepreneurs′ characteristics. Future research can investigate the influence of other contextual factors to continuously enrich the research related to boundaries of organizational network construction and opportunity shaping. Third, the measurement of effectuation needs to be improved. Future research can add measurement items through case interviews and other methods, continuously refine and improve the effectuation scale, and improve measurement accuracy.

 

Key words: effectuation, network construction, opportunity shaping, entrepreneurs′ passion, high-tech startups

 

Author: Xia Lihui, Luo Biao

Author: School of Management, University of Science and Technology of China

School of Management, Hefei University of Technology

The full text has been published in Scientific Research Management, Issue 1, 2021.

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