When Should Entrepreneurs Expedite or Delay Opportunity Exploitation?

Publication Type

Journal Article

Publication Date

5-2008

Abstract

We theorize on the performance implications of the timing at which entrepreneurs stop exploring their business opportunities and start exploiting them. Using an optimal-stopping approach, we characterize the time when exploitation should begin based primarily on when an entrepreneur's ignorance has been sufficiently reduced through knowledge accumulation. This “ignorance threshold” captures a tradeoff between the time needed to increase legitimacy and the necessity to act now to minimize competition. Changes in legitimacy and competition are based on how entrepreneurs manage their knowledge (tacit versus explicit) under differing degrees of novelty for the business opportunity. These changes, in turn, impact the performance and timing of opportunity exploitation.

Keywords

Opportunity exploitation, Ignorance reduction, Knowledge management, Timing of exploitation, Optimal stopping

Discipline

Entrepreneurial and Small Business Operations

Research Areas

Organisational Behaviour and Human Resources

Publication

Journal of Business Venturing

Volume

23

Issue

3

First Page

333

Last Page

355

ISSN

0883-9026

Identifier

10.1016/j.jbusvent.2006.11.001

Publisher

Elsevier

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