Searching for Opportunities and Opportunity Discovery: an Extension of Bhave’s (1994) work By Amine Chelly1

Opportunity Identification (OI) is a central question to understanding the entrepreneurial phenomenon. Several studies have emerged in recent years to enrich the debate on OI and especially on entrepreneurial opportunity identification processes. We try in this paper to extend Bhave’s (1994) work on OI processes by focusing on the factors that affect both searching for opportunities and opportunity discovery processes. Based on two in depth case studies of Tunisian entrepreneurs, we show the impact of prior knowledge, past experience, social networks and motivations on OI processes.

INTRODUCTION Opportunity Identification (OI) is an extremely important area of research in entrepreneurship. Pioneered by some researchers in the early 80s, OI was quickly recognized as an essential concept to understand entrepreneurship. During the past ten years, and as the debate within the research community has continued regarding what is in and what is outside the field of entrepreneurship, OI has consistently emerged as a central element in defining entrepreneurship. According to Shane and Venkataraman (2000), “the largest obstacle in creating a conceptual framework for the entrepreneurship field has undoubtedly been its definition. To date, most researchers have defined the field solely in terms of “who the entrepreneur is” and “what he (or she) does” (p. 218) In contrast to this approach, Venkataraman (1997: 120) defines entrepreneurship as “the field of research that looks at how, by whom and with what effects opportunities to create new products and services are discovered, evaluated and operated." Therefore, the field of entrepreneurship involves the study of sources of opportunities, the processes of discovery, evaluation and exploitation of opportunities; and the set of individuals who discover, evaluate and exploit them. (Shane and Venkataraman, 2000) Amine Chelly is Professor at the School of Managers and Business Creators (Ecole des Dirigeants et Créateurs d’entreprise) at Paris. He is both Co-Director of the Entrepreneurship Master Degree and Co-Director of EDC research center (OCRE). He teaches entrepreneurship and strategic management. His research focuses on opportunity identification processes. Address correspondence: Amine Chelly, 70, Galerie des Damiers, La Défense 1, 92415 Courbevoie Cedex France. E-mail : [email protected]

We also notice that many other authors mention OI clearly as an important concept while defining entrepreneurship. Indeed, OI has been considered by several authors as being in the heart of the debate on entrepreneurship (Kirzner, 1979; Timmons, Muzyka, Stevenson & Bygrave, 1987; Kaisha and Gilad, 1991). Thus, Bygrave and Hofer (1991: 14) believe that “an entrepreneur is one who perceives an opportunity and creates an organization to pursue it.” Churchill and Muzyka (1994) see that entrepreneurship involves an act undertaken by a motivated individual who is innovative in creating value through OI and transforming it into a viable product or service. Kirzner (1979) admits that the discovery of an opportunity is the central element of entrepreneurship. Kaish and Gilad (1991) think that the field of entrepreneurship is based on the discovery of opportunities and resources to exploit them. Shane and Venkataraman (2001: 220) support this idea, considering that “to have entrepreneurship, you must first have entrepreneurial opportunities.”

There is no doubt from the foregoing that the concept of OI seems to be at the heart of the definition of entrepreneurship. However, several gray areas persist on whether an opportunity is created or recognized?

Based on Bhave’s (1994) work dealing with the entrepreneurial process and the factors that influence the entrepreneurial opportunities identification process, we analyzed two processes of venture creation by two Tunisian entrepreneurs. We tried to highlight the role of each factor on the two processes of Bhave (1994). This paper has two objectives. First, it describes the process of a venture creation. Second, it tries to understand the nesting of variables throughout the process of identifying opportunities. To achieve our goals, we begin by defining what an entrepreneurial opportunity is. Then we go on by presenting a literature review of variables affecting OI process. Finally, we present Bhave’s model (1994) along with the analysis of our two case studies to better understand both processes of searching for opportunities and opportunity discovery.

1. Opportunity Identification in Entrepreneurship

Before proceeding with a literature review on OI, we should, first, clarify what we mean by the work “opportunity” in entrepreneurship.

1.1. Literature Review on the Definitions of “Opportunity” The term “opportunity” is very similar to “love”, everyone knows what it is, but it is difficult to define because it means different things to different people.

A comprehensive study on past research related to the concept of opportunity shows that the term get several definitions as a “situation” (Stevenson et al., 1989), “economic disequilibrium” (Kirzner, 1973), an “idea that leads a business concept” (Bhave, 1994) or even a new “production function” (Schumpeter, 1934). Timmons (1994a) argues that an opportunity “has the quality of being attractive, durable and timely and is anchored in a product or service that creates value for its buyer or end users” (p. 87).

It is very surprising that researchers in entrepreneurship have not systematically tried to define the concept of “opportunity” and thus attempted to reach a consensus on the meaning to give him, especially since it is crucial to the entrepreneurial process (Shane and Venkataraman, 2000). We note, however, that recent researches on the subject begin to focus on this problem by defining what researchers mean by “opportunity” (example: Shane, 2003; Sarasvathy, Venkataraman, Dew and Velamuri, 2005).

The Oxford dictionary defines an opportunity as either (1) a favorable combination of circumstances, or (2) A chance for progress (or growth). These definitions are clearly too broad, leaving many possibilities for interpretation.

To define their concept, Shane and Venkataraman (2000) adopted the definition of Casson (1982), considering an entrepreneurial opportunity as “situations in which new goods, services, materials and methods of organization can be introduced and sold at a price above their cost of production” (Casson, 1982). Now, if we adopt this definition of “opportunity”, as suggested by Shane and Venkataraman (2000), we limited our researches across the field of entrepreneurship only on successes, implying that we couldn’t do that retrospectively (Baumol, 1983; Singh, 2001). Almost all the proposed definitions of the term “opportunity” adopt the idea that an opportunity is known to be a favorable situation. This view leads us to ask how an individual could imagine that what he perceives is actually an “opportunity”. This question requires a

preliminary remark on the subjective perception of a favorable situation. Indeed, anyone can actually judge a situation as favorable and, therefore, conclude that this would be an opportunity. However, this ruling is, in our opinion, different from one individual to another, as our cognitive characteristics differ and this situation, considered favorable today, may no longer be tomorrow.

Most definitions of the concept of opportunity also mention the favorable situation of it. Indeed, Schumpeter (1974: 66) defines the entrepreneurial opportunities as “new combinations that arise through the introduction of a new product, a new method of production, exploitation a new market, the conquest of a new source of supply and, finally, a new form of industrial organization.” If an entrepreneur obtains a beneficial evolution of these factors of production, thanks to a new combination, he (or she) has, according to Schumpeter, identified a new opportunity.

For Kirzner (1973, 1979), “opportunity” equals “opportunity for profit.” He defines an opportunity for profit as the presence in the economy of a misallocation of resources, which causes a form of waste in society. The entrepreneur seizes the opportunity by developing a better combination that fixes the disequilibrium and allows him to make a profit; the latter possibility has not been previously recognized. The profit opportunity exists when there is an application for which people want to pay and, concurrently, the resources required are available.

Following their definition of entrepreneurship as “a process by which individuals - either on their own or inside organizations - pursue opportunities without regard to the resources they already control”, Stevenson and Jarillo (1990: 23) define an opportunity as “a future situation deemed desirable and feasible.” This definition is too broad, but Stevenson and Jarillo (1990) believe that an opportunity is “desirable” and “feasible” is very subjective.

Long and McMullan (1984: 573) draw, too, is a feasible opportunity “developed a vision of the new company that leads the careful preparation of the mechanism of translation from concept to reality, given the parameters of the industrial environment.”

Venkataraman (1997) defines opportunity as “a set of ideas, beliefs and actions that enable the creation of future products and services in the absence of a common market for them.” The proposed definition to the concept of “opportunity” by De Bono (1980) provides a simplification. Indeed, in his book, De Bono (1980) sees the opportunity as a policy option among others, but also the best solution to follow. However, this definition does not capture the full complexity of the concept. It does not include many dimensions described in the previous developments of this chapter such as novelty, orientation towards the future or vision. Therefore, this definition raises the problem of its operational validity. De Bono (1980) draws a parallel between “opportunity” and “problem” very useful in understanding the concept of opportunity. It also attempts to give an acceptable definition. Indeed, De Bono (1980: 23) considers that “an opportunity cannot be really popular at the moment it appears. It is indeed classifiable as an opportunity to post when business is actually seized, but a problem, as opposed to an opportunity is substantial a priori but is really difficult to solve. “ The term “opportunity” is fundamentally opposed to the uncertainty. It is recognized as an undeniable aspect of the environment and emerging activities and / or organization that the researcher in Entrepreneurship tries to study and understand. At that time, the actors do not know if what they perceive is an opportunity or not.

Davidsson (2003: 37) think it is little incentive for entrepreneurship as a field of research, a central concept as “an opportunity” to be used for: 1) a set of external conditions known retrospectively as favorable (for individuals) to the successful discovery and exploitation of new business activities; 2) a set of external conditions perceived (by some) and not revealed and whose existence is not yet proven and that will be conducive to the discovery and exploitation of new business activities; 3) specific new initiatives to create sustainable, known retrospectively; 4) specific new initiatives that are in operation whose viability is not yet proven.

The fourth use of the concept of “opportunity” by Davidsson (2003) is ambiguous as it represents one of the interests of researchers in entrepreneurship. Davidsson (2003) suggests to refer to that entity through the “idea of creation” to emphasize the fact that its viability is not yet proven or acquired. The creative ideas are generated and created in the minds of individuals. They are based on perceptions, more or less explicit, more or less “correct” environmental conditions. The creative ideas and evolve over time and become increasingly sophisticated. We are fully committed to about Davidsson (2003: 37) that: the entrepreneurial process begins with designing a creative idea. The latter, including the activities and structures that are around, is the central unit of entrepreneurship research. According to Ardichvili, Cardozo and Ray (2003: 106), “opportunities exist without prior form and grow over time. They begin as a simple concept and become more sophisticated thanks to the contribution of individual entrepreneurs.” From this perspective, the opportunity detection process is ultimately a process of formation and transformation where change is a fundamental part. In his definition of opportunity ("a virtual company doable, seeking profit that offers a new product or service to market, improving a product/service already existing, imitating or a product/service profitable in a market not yet saturated“ (Singh, 2000: 29)), Singh (2000) distinguishes the different sequences of the recognition process opportunities. It considers that, after identifying an opportunity, the business concept can be developed and acquired resources to take advantage of the opportunity. This linear design process separates the one hand, the idea of creating the opportunity and, secondly, whether the phase of the acquisition of necessary resources and the launch of the case. The opportunity is therefore conceptually discrete and separated from other phases of the entrepreneurial process. Such a conception of the entrepreneurial opportunity calls for three comments. First, the definition of Singh (2000) is “economy” oriented. Non-profit organizations are excluded from this definition. Indeed, the term “profit” in the latter refers to the potential benefit that should have an opportunity entrepreneurial economic benefit that is realized in the framework of regional malls. Second, the English terminology “venture” means either a new division within an existing firm, or a combination of two or three companies or a newly created firm. He does not understand the concept of business recovery, which is part of the field of entrepreneurship (Deschamps, 2000). Indeed, the resumption of business also represents an opportunity for a potential entrepreneur. Finally, the term “feasible” is used by Singh in a very broad sense. Be feasible means that the creation of the business potential is possible and permitted by law.

Define a business opportunity without regard to the entrepreneur himself is a restrictive vision and incomplete. In effect, if any person fails to identify the business opportunity and not whether it exists or not, then this debate becomes uninteresting. It is impossible to know if the opportunities are not identified as such will know someday. On the other hand, the set of circumstances may, for some individuals, cause a business opportunity while for others it will never happen. That’s why we cannot define a business opportunity without regard to the entrepreneur with prior knowledge, experiences, social context and expectations of the future. The environmental variables also play a role in generating business opportunity. It is therefore essential to consider these elements (social, economy, economic conditions of the market, the global environment in general) in the definition of business opportunity. All these elements are present in the definition of Singh (1998) of the business opportunity. Indeed, it defines entrepreneurial opportunity as a function of personal knowledge, abilities and past entrepreneur (P), a new idea (I) and environmental variables (E). Hence the equation Y=f (P, I, E) where O represents opportunity. Figure 1 summarizes the vision of Singh (2000).

Entrepreneur - Past - Experience - Education

*** Idea creation ***

Entrepreneurial Opportunity

Environment -

Industry Economic conditions Social Context Legal problems

Figure 1 – Entrepreneurial Opportunity (Singh, 2000)

From this definition, an entrepreneurial opportunity would offer a product/service innovation that creates its own market (creation of a new supply curve and demand radical innovation in

the sense of Schumpeter), or it would propose an improvement of a product/service already exists (moving the demand curve, incremental innovation), or lead to a solution similar to a product/service already existing in a changing market (moving the supply curve).

By following a more revolutionary approach and tighter, Shane (2003) defines an entrepreneurial opportunity as “a situation in which a person can create new “means-ends” structures with a new combination of resources that will lead, according to convictions of the entrepreneur, to a profit“(p. 18). Shane (2003) emphasizes in his book on the fact that opportunities are not necessarily profitable, in contrast to most definitions of the opportunity presented above. They may differ significantly from the expected value. Indeed, as we noted above, it is difficult or impossible to guess the value of opportunities identified ex-ante and eventual development. The major difference between Singh’s definition (2000) and Shane’s (2003) one lies in the fact that the former has adopted an “all-encompassing” approach to define what constitutes an entrepreneurial opportunity while the latter focuses only on a complete redesign of a means-ends framework. This suggests that entrepreneurial opportunities require the discovery of new “means-ends” framework that differ from other types of opportunities that involve optimization with existing “means-ends” links (Kirzner, 1997). In addition, Sarasvathy and al. (2005) define an entrepreneurial opportunity as the set of ideas, beliefs and actions that enable the creation of new goods and services in the absence of a common market for them (Venkataraman, 1997). Indeed, for Sarasvathy et al. (2005), an opportunity consists of: (A) new ideas or inventions that may or may not lead to the achievement of one or several economic ends that become possible through them; (B) beliefs in things conducive to the accomplishment of purposes beneficial, (C) actions that create and implement these specific purposes by the (imagined) new economic artifacts (artifacts may be goods as products or services, and / or entities such as firms and markets, and/or institutions such as standards and norms). Table 1 summarizes the definitions of the term “opportunity”. This synthesis demonstrates, once again, that opportunity is a vague concept with variable geometry.

Authors SCHUMPETER (1934) KIRZNER (1973) STEVENSON and MOSSI (1989) BHAVE (1994) TIMMONS (1994)

Definitions

JARILLO-

VENKATARAMAN (1997)

Shane (2003)

Opportunity = Production function Opportunity = Economic Disequilibrium Opportunity = A future situation judged feasible and desirable Opportunity = An idea leading to a business concept Opportunity = has the quality of being attractive, durable and timely and is anchored in a product or service that creates value for the person who buys or uses. Entrepreneurial Opportunity = it consists of a set of ideas, beliefs and actions that allow the creation of future products and services in the absence of a common market for them. Opportunity = A situation in which a person can exploit a new business idea that has the potential to generate a profit

1.2. Our definition of “Opportunity” From all the elements proposed and discussed above, we can say that opportunity is a construct that results from several factors: • First, under the control of the entrepreneur (eg experience in all its forms, past, knowledge), it is considered as endogenous; • Secondly, outside its control (contextual and environmental factors). It can be realized in the market as an incremental innovation (Kirzner) or a radical innovation (Schumpeterian), it is considered exogenous.

We share the views of Singh (2000), that entrepreneurial opportunity depends on both entrepreneur and the environment in the sense that these are environmental conditions that lead an entrepreneur (or team entrepreneurial) introducing a new product (or service) market, or within an existing firm or creating a new organization.

As we used above, the idea was a springboard, a step towards creating an opportunity and that following this discussion, we highlighted the role of environmental variables and their influence on the work of the entrepreneur, we propose a definition of business opportunity as “the result of a process of developing an idea which arises in the mind of an individual affected by its environment in which its action is embedded”.

We find that, after review of the literature, studies concur that the OI is an important and critical process of business creation. Therefore, researchers in entrepreneurship will give more

attention

to

better

understand

the

entrepreneurial

phenomenon.

Moreover,

the

conceptualization of OI can only be beneficial for one hand, institutions and aid agencies in the creation and, secondly, to teach entrepreneurship. Furthermore, understanding the process of OI requires an understanding of the role of each variable in the process

2. Factors impacting OI processes: 2.1. Entrepreneurial Alertness: Kirzner (1973) was the first to use the term “alertness” to explain opportunity identification. He defines as “the ability to identify, without research opportunities that have been neglected so far.” Ray and Cardozo (1996) argue that the recognition of opportunities for entrepreneurs looking is preceded by a state of maximum alertness to information. They call this state "entrepreneurial consciousness" (or entrepreneurial Awareness EA), which they define as "the propensity to take note and be sensitive to information about products, and patterns of behavior in the environment, with particular sensitivity to the problems of manufacturers and users, needs and interests of the unmet market, and the new combination of resources. "Moreover, in agreement with several authors, they argue that personal characteristics and environment interact to create conditions that will stimulate entrepreneurial consciousness (Sathe, 1989; Gaglio and Taub, 1992). Included in this line of thinking, alertness increases the probability of recognizing an opportunity. However, some research reports show otherwise. For example, Busenitz (1996) empirically tested the proposed Kaish and Gilad (1991) that entrepreneurs are more alert to new opportunities and use the information differently than managers. Busentiz concluded that there was little empirical support to the theoretical framework of Kaish and Gilad (1991), but said that the measure of entrepreneurial alertness required of future developments.

2.2. Prior Knowledge and Information Asymmetry:

Individuals tend to take information that is related to information they already know (Von Hippel, 1994). Consequently, Shane (2000) believes that entrepreneurs discover opportunities because prior knowledge triggers identification of the value of the new information. Based on the vision of Austrian economics that entrepreneurship exists because of information asymmetry that exists between the different actors (Hayek, 1945), Shane says that any entrepreneur will discover only the opportunities related to prior knowledge. In his study of

opportunity identification process into three stages, Shane (2000) has evaluated and confirmed a number of assumptions which may be summarized as follows: • No entrepreneurial opportunity is evident to any aspiring entrepreneur (the reasoning is that all persons do not hold the same information at the same time, Kirzner, 1997) • The idiosyncratic prior knowledge of each individual created a “knowledge corridor” that allows him to recognize certain opportunities and not others (Hayek, 1945; Ronstadt, 1988). Three major dimensions of prior knowledge are important to the process of entrepreneurial discovery: prior knowledge of markets, prior knowledge of the different ways to serve markets and prior knowledge of customer problems.

2.3. Past Experiences: Entrepreneurship literature has often highlighted the impact of past experiences on the identification of business opportunities. We believe that past experiences include work experience, entrepreneurial experience and past experiences associative. Experiences are an important process for generating opportunities. Indeed, past experiences allow the entrepreneur to obtain information on the market in which it operates. According to Venkataraman (1997), this information is idiosyncratic and allows certain entrepreneurs, and not to others, to identify some opportunities in relation to information acquired as a result of their past experiences. Other types of experience that have an impact on OI are past entrepreneurial experiences. These can have a positive or negative impact on the entrepreneur and his view of entrepreneurial opportunity. In their study on a sample of entrepreneurs who have had previous entrepreneurial experience, Ucbasaran et al. (2003) have demonstrated that they identify business opportunities more innovative than novices. They also showed that habitual entrepreneurs believe that opportunities often emerge with the problems and opportunities that often lead to another. According to Gaglio (1997), knowledge accumulated by entrepreneurs after their past entrepreneurial experiences direct their attention, their expectations and understandings of market stimuli. Past entrepreneurial experience allows entrepreneurs to acquire routines and methods that focus on the research of relevant and useful information in a specific field (Ucbasaran et al.,

2003). In addition, Ronstadt (1988) argues that the best opportunities would be only when an individual is involved in a business where a large circulating contact information interesting, viable markets, products available and strategic resources. This information is acquired when the individual is at the heart of a company and when it is itself engaged in the process of starting a business. Another type of experience may also have a role in OI. Indeed, Chelly (2007) has identified that previous experiences of association of an individual are, in some situations, causing a business idea and influence, therefore, the process of identifying entrepreneurial opportunities since these experiments involved in demystifying the entrepreneurial act and sensitize individuals to business creation. As part of participation in an association, the entrepreneur may therefore need to assume responsibility within the said association, to take initiatives, to discuss decisions regarding the strategy of the association and to participate in the search for new ideas. In short, participate in the life of the organization.

2.4. Social Networks:

Hills et al. (1997) argue that networks of entrepreneurs are important for the identification of opportunities. They thus rely on the classic article of Granovetter (1973) on the strength of weak ties in which the author says that weak ties (casual acquaintances included) are “gateways” to information sources that are not necessarily ownership of the network of strong ties of the individual (including friends and family). Granovetter (1973) says it is more likely that casual acquaintance provides unique information that close friends because most people have more weak ties than strong ties. The test of this hypothesis has to Hills et al. (1997) to argue that “entrepreneurs who have an extensive network identify significantly more opportunities than sole entrepreneurs themselves”. Hills et al. also assumed that the quality of contacts in the network can affect other characteristics such as alertness and creativity.

2.5. Motivations Motivations, positive or negative, that are responsible for the entry of an entrepreneur in the entrepreneurial process are very important factors for understanding the process of generating entrepreneurial opportunities. Entrepreneurship literature has studied these motivations and developed the “push and pull” theory.

The “Push and Pull” theory (Shapero, 1975; Vesper, 1980), proposes to explain the reasons why an individual to create his own company and distinguishes among these two classes of motivations: “push motivations” and “pull motivations.” Thus, some entrepreneurs would create frustration, being pushed by negative events (push motivations) such as being fired, restructuring, lack of challenging opportunities, etc. These entrepreneurs feel a threat and the commitment into a creative process is for them, a reaction to the danger predictable. On the contrary, others will engage in a creative process, attracted by “positive motivations” (pull motivations) such as the search for independence, the willingness of accomplishment and self-realization, the attraction of better material conditions, the vision of favorable environmental variables. These entrepreneurs perceive one or several opportunities to exploit.

2.6. Personality traits: Several cognitive studies have focused on personality traits of entrepreneurs and their contribution to the success of entrepreneurial firms. However, Shaver and Scott (1991), in their summary of the major attempts, specify that psychometric tests seeking “entrepreneurial” traits found no distinctive differences in personality traits between entrepreneurs and other groups (i.e. managers). Two personality traits were however identified as being associated with successful identification of opportunity. First, some researchers have observed the connection between optimism and higher identification of opportunities. Studies by Krueger and Dickson (1994) and Krueger and Brazeal (1994) show that entrepreneurial optimism is related to belief in self-efficacy. It is important to note that the optimism about its ability to achieve challenging goals and different (self-efficacy) is not related to optimism in the direction of taking greater risk. Guth et al. (1991) found that entrepreneurs’ optimism was an “inside view” of the potential success of the company, largely based on entrepreneur evaluations of their skills and knowledge. Once forced to adopt a position, entrepreneurs were much more realistic in judging the likely outcomes. The second personality trait is creativity. Schumpeter (1934) was the first to put forward the idea that successful entrepreneurs discover opportunities that others miss. Hills et al. (1997) found that 90% of their sample believes that creativity is very important for OI. However, entrepreneurs think that it is substantially more important than the entrepreneurs connected to a network. Hills et al. (1997) conclude that the entrepreneurs who are networked with sources of opportunity need not be as creative as those who do not.

To better understand the process of identifying entrepreneurial opportunities, we believe that Bhave’s (1994) model provides an excellent base. Having presented the specifics, we will build using two case studies from two Tunisian entrepreneurs their respective entrepreneurial process to better understand the identification phase of the entrepreneurial opportunity. Our methodology was totally with qualitative semi-structured interviews conducted with the two entrepreneurs. Interviews (4 meetings with each entrepreneur) were each time lasting an average of 2 hours. The topics discussed concerned the process of creating the company and especially the early stages of identifying the business opportunity and the role of each variable (social network, prior knowledge, entrepreneurial alertness, motivation,

3. Bhave’s (1994) Model of Opportunity Recognition (OR)

As part of his work on modeling the process of starting a business, Bhave (1994) proposed a model of the recognition sequences of entrepreneurial opportunities. To do this, he relied on a qualitative study with a group of entrepreneurs in the region of New York. The answers to the question “Can you tell me how your business started?” were treated and two separate processes were identified by Bhave (1994) (Figure 2). • The externally stimulated opportunity recognition process; • The internally stimulated opportunity recognition process; In the externally stimulated opportunity recognition process, the decision to start a business precedes OR. This decision is usually influenced by environmental and personal circumstances of the entrepreneur at the moment when he decided to start a business. Bhave (1994: 228) gives several examples of circumstances (relocation of the company, job dissatisfaction) that led entrepreneurs in his sample to consider entrepreneurship. The common reason given by entrepreneurs in Bhave’s study about their decision to create a business lies in the fact that this decision preceded the choice of which opportunity to pursue. According to Bhave (1994: 228), “most entrepreneurs who have decided to start a business by following this type of process (the decision to create a business precedes OI) recognize more opportunities than they really pursue”.

A – Externally Stimulated Opportunity Recognition Opportunity Filtration

Decision to create

Opportunities recognized

Opportunity chosen

Opportunity Refinement

Business concept identified

B – Internally Stimulated Opportunity Recognition

Engagement in effective creation

Opportunity Refinement

Meta-opportunity Stage

Need recognized

Need satisfied

Opportunity recognized

Figure 2 – Bhave’s (1994: 229) Model of Opportunity Identification Processes

In Bhave’s (1994) model, the decision to create a business is followed by research that aims to bring knowledge, experience, skills and other resources which the potential entrepreneur needs. In seeking this balance, the entrepreneur will remove the potential opportunities that are not appropriate. This phase ends with the selection of one or a few opportunities on which the entrepreneur will study in depth. This is the stage filtration opportunities (Long and McMullan, 1984). Once the commitment to pursue specific opportunities taken, the entrepreneur refines these opportunities to identify business idea. The entrepreneur began the process of effective launch of the business. The externally stimulated opportunity identification process of Bhave (1994) is therefore assimilated to a process of seeking opportunity. This is where the entrepreneur NB is. 3.1. Searching for an opportunity: NB’s case study 3.1.1. Case presentation Mr NB began his professional career at STB, one of the largest Tunisian banks, in the medium-term credit for businesses department within the agency’s main city of Sousse. He spent 6 years. Then he made a transition from 6 years as second in charge of the company’s AMS, a subsidiary of STB. After completing 12 years as an operator to the STB, the CEO of the bank told him that he would join the bank’s headquarters in Tunis. Being a native of Sousse and having no “sympathy” for the city of Tunis, NB did not wish to join the bank’s headquarters. After trying to convince the CEO of the bank of the usefulness of his presence at the AMS Company, he began thinking about starting a business in the region of Sousse. The entrepreneur NB has started looking for a creative idea. He went to see the API for market studies. He informed the bank to the state treasury companies and identified those that were in full development. He visited national and international fairs. Ultimately, it arrested 4 business ideas in different sectors: paper and everything that is attached to the cardboard, the sale of bicycles, copper and plastic. Market analysis conducted by the entrepreneur NB enabled him to determine that the plastics sector was the most attractive and the technology it was easier to master for the uninitiated. So he created a company that manufactures plastic packaging films.

3.1.2. Analysis and Discussion NB’s process is typically a search for opportunity process. Indeed, as the entrepreneur for SA, the intention of starting a business was present prior to the business idea. The entrepreneur NB who was not happy in his work (lack of independence coupled with the fear of a mutation in another city, conflicts, etc.) thought about entrepreneurship as the solution. Push motivations played a role in the formation of the intention to start a business. A search process was deliberate and conscious. Indeed, having no business idea in mind, the entrepreneur NB began searching for information (reports of business activities, market studies provided by agencies, information from its social network) that could put him on the trail of a business opportunity. This case is typically synonymous with looking for an opportunity that exists in the environment. This opportunity is exogenous and objective reality for NB. The assumption of NB was based on Kirzner’s idea that in the environment there is a stock of opportunities just waiting to be identified if we emit the search protocol. Figure 3 summarizes the process of seeking opportunities of NB. Prior knowledge (from work experience within the bank), social network (strong and weak ties) and aid agencies (Agency for the Promotion of Industry) have played a more or smaller in the research phase of business ideas. With the information he could provide the entrepreneur, the social network also had an impact on the identification of business opportunities. Prior knowledge had an important role, especially in providing funds for NB’s project. Push motivation

Help from institutions

Intention to create

Faisability evaluation of the project

Environment Deliberate search

Network strong ties

Decision to act

Opportunites identified

Opportunity chosen

Prior Knowledge

Figure 3 – The entrepreneur NB’s Process of Searching for opportunities

The second direction for OR identified by Bhave (1994) is entitled “Internally stimulated opportunity recognition.” The process is “internally driven” because, for Bhave (1994), in this process, OR precedes the decision to create. Potential entrepreneurs are aware, personally or through their social network, by the fact that in the environment some needs are not yet satisfied. They try to find personal solutions to fulfill them. At this level, the potential entrepreneur is not yet aware that the need he seeks to satisfy is broad and can lead to a venture creation. Bhave (1994) call this stage “Meta-opportunity.” Once the solutions to meet the need, identified the potential entrepreneur is aware of the existence of business opportunity in that it has a solution to a problem. These possibilities of doing business become, over time, more and more attractive. The potential entrepreneur decides to create an airline for its solution and satisfy the market need. This phase is followed by a refinement of the opportunity to identify the final business concept. The creation of effective decision is taken by the entrepreneur. 3.2. Opportunity discovery: ZS’s case study 3.2.1. Case presentation

The Entrepreneur ZS is a computer enthusiast. In 1998, when the Internet made its appearance in Tunisia, ZS was studying chemistry and he was passionate, with a handful of friends to the network of networks and all he stood at the time. Featuring a low-speed Internet connection (ADSL was not at all on the agenda at the time), the Entrepreneur ZS spent hours and hours surfing the net and learn how create websites. This enthusiasm for this medium and the creation of websites are now, for the entrepreneur ZS, a passion which unfortunately was very costly to his parents. At the end of his studies, the entrepreneur discovered that ZS was an opportunity to Tunisia to make money than to offer companies concerned about their image and want to make communication, to create their websites. In 2000, the number of subscribers has in fact increased and Tunisian companies have begun to address the Internet and its benefits. The passion of the entrepreneur ZS was then transformed into a company using new technologies by developing websites and software.

3.2.2. Analysis and Discussion The example of the entrepreneur ZS is representative of a situation where the entrepreneur had no intention of starting a business. Indeed, as shown by the case at the beginning, the sole objective of the entrepreneur was to indulge his passion for creating websites. So there was no deliberate search for a business opportunity. We also note that there was no particular motivation for entrepreneurship. Web sites existed at the time, since the entrepreneur would use them to surf for hours and hours on the web. The opportunity therefore existed independently of the entrepreneur ZS. The technology was available and it was enough to know a few technical elements to it can in turn create websites. The evolution of the Tunisian environment and increasing the number of subscribers (individuals and professionals) the Internet, offered the opportunity to the entrepreneur ZS discover that his passion could lead to a commercial entity and that It could, therefore, create a company that specializes in designing websites. Figure 4 shows the process of entrepreneur ZS. Prior knowledge (Master in web sites design) are a prerequisite for the OR which exists in the environment. The absence of intention and deliberate search is shown in dotted lines.

A passion

Decision to act

No deliberate search Environment Prior knowledge

Eureka!

Opportunity discovered

No intention

Figure 4 – Opportunity discovery process of the entrepreneur ZS

Conclusion In his model, Bhave (1994) distinguishes two processes of OI depending on the decision to start a business. We believe that the concept of intention is more appropriate to distinguish those who are willing to create as opposed to those who do not. We therefore intend to start a business (presence or absence) as the first element of differentiation between the two processes of IO. These results allow us to revisit the model of Bhave (1994) and propose a model of both processes of search and discovery of entrepreneurial opportunities by highlighting the role of each factor (Figure 5). The contribution of our paper lies in the fact that we identified on which factor we can play to boost the entrepreneurial process. This result can be a great contribution in coaching and/or in teaching entrepreneurship as we can stimulate the variables to get students or entrepreneurs think in the direction of searching for opportunities or opportunity discovery. However, it is necessary to put these results in their context because we worked on two cases only. A more quantitative work is indeed underway to confirm or refute these results.

Prior Knowledge

Searching for opportunity

Push motivation

Intention to create

Deliberate search

Opportunities identified

Opportunity chosen

Strong ties Network

One passion

No intention

Commitment to effective launch Environment Eurêka

Need identified

Prior Knowledge

Opportunity Discovery

Figure 5 – Entrepreneurial Opportunity Generation Processes Model

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