Chapter II

Review Related Literature

This study entitled Preference of graduating college of Business Education in choosing

their profession? This study examined the relation between involvement in Entrepreneurship and

Corporate Job. Entrepreneurship is defined as the process of creating something new with value

by devoting the necessary time and effort; assuming financial, psychological, social risks

uncertainties, and receiving the resultant rewards of monetary, personal satisfaction and

independence.

The entrepreneur goes through the entrepreneurial process, which involves finding,

evaluating and developing opportunities for creating a new venture. Each stop is essential to the

eventual success of the new venture and is closely related to the other steps. There are both

formal and informal mechanisms for identifying business opportunities. Formal mechanisms are

generally found within a more established company, most entrepreneurs use informal sources for

their ideas, such as being sensitive to the complaints and chance comments of friends and

associates. Once the opportunity is identified, the evaluation process begins. Basic to the scoring

process is understanding the factors that create the opportunity: technology, market changes,

competition, or changes in government regulations. From this base, the market size and time

dimension associated with the idea can be estimated. It is important that the idea fit the personal

skills and goals of the entrepreneur, and that the entrepreneur have a strong desire to see the

opportunity brought to fruition. ( Hesrich, 2001)

Entrepreneur is the one who creates a new business in the face of risk and uncertainty for

the purpose of achieving profit and growth by identifying significant opportunities and
assembling the necessary resources to capitalize on them. Entrepreneurship is not the same thing

as throwing drafts and hoping for the best. It is about planning and taking calculated risks based

on upon knowledge of the market, the available resources or products, and a predetermined

measure of the potential for success. (,2013)

Entrepreneurship and small firms by David Deakins and Mark freel (2010). There

are three Approaches to entrepreneurship: (1) Economic writers and theorists The Economic

approach, (2) The psychological characteristics school or entrepreneurial Personality approach,

(3) Social-behavioral approach. Entrepreneur is noticeable only by its absence. Can be viewed as

someone who coordinates different factors of production, but the important distinction is that this

role is viewed as a non-important one.

Baron, Robert (1998). Cognitive Mechanisms in entrepreneurship: Why and When

Entrepreneurs Think Differently Than Other People. In this conceptual article, the author

presents information on the study that examined the possible differences in the thinking of the

entrepreneurs and other people. This paper offers a number of implications of a cognitive

perspective for entrepreneurship research.

McGrath, Rita (1999). Falling forward: real Options Reasoning and Entrepreneurial

failure. Although failure in entrepreneurship is pervasive, theory often reflects an equally

pervasive antifailure bias. Here, the author uses real options reasoning to develop a more balance

perspective of the role of entrepreneurial failure in wealth creation, which emphasizes managing

uncertainty by pursuing high-variance outcomes but investing only if conditions are favorable.

This can increase profit potential while containing costs. The author also offers positions that

suggest how gains from entrepreneurship may be maximized and losses mitigated McGrath,

Rita; and Ian MacMillan (2000). The entrepreneurial Mindset: Strategies for Continuously
Creating Opportunity in an Age of Uncertainty, Cambridge. In this book the authors provide tips

on how to achieve an entrepreneurial Mindset. For example, they discuss the need to focus

beyond incremental improvements to entrepreneurial actions, asses a business’s current

performance to establish the entrepreneurial framework, and formulate challenging goals by

using the components of the entrepreneurial frameworks.

McMullen, Jeffery S.; and Dean Sheperd (2006). Entrepreneurial Action and the Role

of Uncertainty in the Theory of the Entrepreneur. By considering the amount of uncertainty

perceived and the willingness to bear uncertainty concomitantly, the authors provide a

conceptual model of entrepreneurial action that allows for examination of entrepreneurial action

at the individual level of analysis while remaining consistent with a rich legacy of system-level

theories of the entrepreneur. This model not only exposes limitations of existing theories of

entrepreneurial action but also contributes to a deeper understanding of important conceptual

issues, such as the nature of opportunity and the potential for philosophical reconciliation among

entrepreneurship scholars.

Mitchell, Ron; Lowell Busenitz; Theresa Lant; Patricia McDougall; and Brock

Smith. (2002). Toward a Theory of Entrepreneurial Cognition: Rethinking the people Side of

Entrepreneurship Research. In this article the authors reexamine “the people side of

entrepreneurship” by summarizing the state of play within the entrepreneurial cognition research

stream, and by integrating the five articles accepted for publication in a special issue focusing on

this ongoing narrative. The authors propose that the constructs, variables, and proposed

relationships under development within the cognitive perspective offer research concepts and

techniques that are well suited to the analysis of problems that require better explanations of the

distinctly contributions to entrepreneurship.

 Sarasvathy, Saras (2001). Caution and Effectuation: Toward a Theoretical Shift from

economic Inevitability to Entrepreneurial Contingency. In this article the authors explore the

differences in the decision making process between entrepreneurs and managers in large

organizations. In particular, they focus on a number of biases, such as the overconfidence bias,

but also point out some benefits from the use of biases and heuritics.

Gaolio, Connie Marie; and Jerome Katz (2001). The Psychological Basis of

Opportunity Identification: Entrepreneurial Alertness. In this article the authors describe a model

of entrepreneurial alertness and propose a research agenda for understanding opportunity

identification. They investigate the origin of the entrepreneurial alertness concept and the notion

of the psychological schema of alertness.

Gifford, Sharon (1998). Limited Entrepreneurial Attention and Economic Development.

Economic development depends on the allocation of entrepreneurial resources to efforts to

discover new profit opportunities. Limited entrepreneurial attention is allocated between

maintaining current activities and starting new activities. The problem of allocating limited

entrepreneurial attention in a variety of contexts is addressed.

Hayton, James C; Gerard George; and Shaker A. Zahra. (summer 2002). National

Culture and Entrepreneurship: A review of Behavioral Research. The article reviews and

synthesizes the findings of 21 empirical studies that examine the association between national

cultural characteristics and aggregate measures of entrepreneurship, individual characteristics of

entrepreneurs, and aspects of corporate entrepreneurship.

 Hitt, Michael; Barbara Keats; and Samuel DeMarie. (1998). Navigating in the New

Competitive Landscape. Building Strategic Flexibility and Competitive Advantage in the 21st

Century. The articles cite the importance of building strategic flexibility and a competitive

advantage for organizations to survive in the face of emerging technical revolution and

increasing globalization. The nature of the forces in the new competitive landscape requires a

continuous rethinking of current strategic actions, organization structure, communication

systems, corporate culture, asset deployment, and investment strategies----in short, every aspect

of a firm’s operation and long-term health.

Ireland, r. Duane; and Michael Hitt, (1999). Achieving and Maintaining Strategic

Competitiveness in the 21st Century: The Role Strategic Leadership. IN this article the authors

acknowledge that effective strategic leadership practices can help firms enhance performance

while competing in turbulent and unpredictable environments. They then describe six

components are completed successfully, the firm’s strategic leadership practices can become a

source of competitive advantage. In turn, use of this advantage can contribute significantly to

achieving strategic competitiveness and earning above-average returns in the next century.