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Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=rsbe20 Journal of Small Business & Entrepreneurship ISSN: 0827-6331 (Print) 2169-2610 (Online) Journal homepage: https://www.tandfonline.com/loi/rsbe20 A Conceptual Framework for Describing Online Entrepreneurship Prakash L Dheeriya To cite this article: Prakash L Dheeriya (2009) A Conceptual Framework for Describing Online Entrepreneurship, Journal of Small Business & Entrepreneurship, 22:3, 275-283, DOI: 10.1080/08276331.2009.10593456 To link to this article: https://doi.org/10.1080/08276331.2009.10593456 Published online: 19 Dec 2012. Submit your article to this journal Article views: 273 View related articles Citing articles: 5 View citing articles Journal of Small Business and Entrepreneurship 22, no. 3 (2009): pp. 275–284 275 A Conceptual Framework for Describing Online Entrepreneurship Prakash L Dheeriya, Department of Finance, California State University-Dominguez Hills, Carson ABSTRACT. Most of the literature on entrepreneurship relates to the traditional “brick-and-mortar” type. A review of contemporary research in entrepreneurship literature suggests that online entrepreneurs are different from regular, or “brick-and-mortar” entrepreneurs. This paper attempts to collate all variables used in prior research to describe entrepreneurs and their ventures into a comprehensive framework. This framework consid- ers four major aspects of entrepreneurship: characteristics of individuals starting the venture; technology used in the venture; the environment in which the venture operates and the process by which the venture is created. Such a framework can provide useful insights into the process of online entrepreneurship by showing it to be a com- plex, multi-factor phenomenon. RÉSUMÉ. La majeure partie de la littérature au sujet de l’entrepreneuriat se rapporte aux entreprises tradition- nelles. Une revue de la recherche contemporaine sur l’entrepreneuriat semble indiquer que les entrepreneurs ayant une entreprise en ligne diffèrent de ceux ayant des entreprises traditionnelles. Cette étude tente de réunir toutes les variables qui ont été utilisées dans les recherches antérieures pour décrire les entrepreneurs et leur entreprise au sein d’un cadre complet. Ce cadre tient compte de quatre aspects majeurs de l’entrepreneuriat : les caractéristiques des individus qui démarrent l’entreprise ; la technologie utilisée au sein de l’entreprise ; et l’environnement dans lequel l’entreprise fait affaires et le processus par lequel elle est établie. Ce genre de cadre peut fournir des indications utiles au sujet du processus de l’entrepreneuriat en ligne en le démontrant comme étant un phénomène complexe à multiples facettes. Introduction Current research in entrepreneurship tends to focus on or prove the notion that entrepre- neurs are different from non-entrepreneurs1 or that entrepreneurial firms are different from non-entrepreneurial firms.2 In these studies, the basic assumption is that all entrepreneurs and their new ventures are homogenous. The focus of this paper is on differences between brick-and-mortar entrepreneurs and entrepreneurs who conduct ventures completely online. Differences between these two may be greater than the differences between entre- preneurs and non-entrepreneurs and those between entrepreneurial firms and non-entre- preneurial firms, as discovered in the studies mentioned earlier. Once we identify and rec- ognize that online entrepreneurs are different from regular entrepreneurs, it becomes nec- essary to find a way to classify those online ventures. The meaning of entrepreneurship and its measurement has been discussed in several studies.3 Determinants of entrepreneurship have been the focus of several studies cover- ing a wide range of theories and explanations (Brock and Evans, 1989; Gavron, Cowling, Holtham and Westall, 1998; OECD, 1998; Blanchflower, 2000, 2004; Verheul, Wennekers _________________________ 1. See Brockhaus, 1980; Carland et al., 1984; Collins and Moore, 1964; DeCarlo and Lyons, 1979; Hornaday and Aboud, 1971; Howell, 1972; Komives, 1972; Litzinger, 1965; McClelland, 1961; McClelland and Winter, 1969; Palmer, 1971; Schrier, 1975; Shapiro, 1975. 2. See Collins and Moore, 1970; Cooper, 1979; Smith, 1967; Thorne and Ball, 1981. 3. See Hébert and Link, 1982; Bull and Willard, 1993; Lumpkin and Dess, 1996; OECD, 1998; Praag, 1999. and Thurik, 2002; Arenius and Minniti, 2005). Entrepreneurship has been found to be a significant factor in economic development of countries ((Baumol, 1990; Wennekers and Thurik, 1999; Carree and Thurik, 2003, 2006; Acs et al., 2005). The extent of entrepre- neurship has been found to vary systematically across countries and across time (Rees and Shah, 1986; Wit and Van Winden, 1989; Blanchflower and Meyer, 1994; Blanchflower, 2000, 2004). However, similar research on “online entrepreneurship” is sparse, even though the coverage of “online” entrepreneurship is truly global. Interest in international entrepreneurship has increased rapidly over the past decade (Brush, 1993, 1995; Hitt and Bartkus, 1997; Hisrich et al., 1995). Scholars have observed the close theoretical link between entrepreneurship and international business (IB) research (Hisrich et al., 1994; McDougall and Oviatt, 2000). However, a conceptual framework for analyzing “online entrepreneurship” has yet to be developed formally in the field of online entrepreneurship. It is this gap that this paper purports to fill. The conceptual framework that is developed in this paper will provide a way of ana- lyzing past research studies. Each study can be broken down into types of individuals, organizations, environment of internet and processes that were studied. This paper will not seek to answer questions such as how online ventures are started or provide theoretical models of online entrepreneurship. Instead, it will provide a different perspective on the online entrepreneur; a shift that will emphasize the complexities and variations involved in online entrepreneurship. The goal of coming up with a framework is not to smooth differences between entre- preneurship and online entrepreneurship and come up with typical properties of a typical entrepreneur. The goal is to identify specific variables that describe how online entre- preneurship is created, in order that meaningful contrasts and comparisons among new ventures can be made. Growth of Online Entrepreneurship The internet-based commerce has been stealing billions of dollars away from traditional retail outlets, and is becoming a significant component of global sales of a growing enter- prise. Once we acknowledge that online entrepreneurship is becoming more and more sig- nificant in today’s business world, it then becomes necessary to find a framework for sys- tematically discovering and evaluating the similarities and differences among new online ventures. The population of entrepreneurs may be homogenous but the subset of “online” entrepreneurs within the entrepreneurial universe must be further analyzed so that entre- preneurial research can produce meaningful results. A primary value of such a framework for describing online entrepreneurship presented here is that it provides a systematic means of comparing and contrasting brick-and-mortar ventures with online ventures. In addition, it provides a way to conceptualize variation and complexity in entrepreneurship (Gartner, 1985). Existing frameworks of entrepreneurship consider variables such as country effects, role of government intervention, supply of resources and willingness of entrepreneurs. One such framework was developed by Verheul et al. (2002) (see Figure 1) in which they compared levels of motivation of entrepreneurs between the U.S. and European countries. They empirically tested this framework and discovered that factors such as lack of finan- cial support and perceived administrative bureaucracies at government levels did not influence levels of motivation. Another conceptual framework of entrepreneurship went deeper by distinguishing itself from domestic entrepreneurship (e.g. see Zahra and George (2002)). In this framework, 276 DHEERIYA A CONCEPTUAL FRAMEWORK FOR DESCRIBING ONLINE ENTREPRENEURSHIP 277 Risk-reward profile G G G G G E E E- entry / exit Opportunities Resources Abilities / traits Preferences DEMAND SUPPLY G gender, age, administrative burden, financial support, risk country Figure 1. Source: Verheul et al. (2002). An Integrated Model of International Entrepreneurship Environmental Factors Organizational Factors Intl. Entrep. Competitive Advantage Strategic Factors ‘’‡–‹–‹˜‡ ‘” ‡• ”‘™–Š ’’‘”–—‹–‹‡• ƒ–‹‘ƒŽ—Ž–—”‡ †—•–”›”‘ˆ‹–ƒ„‹Ž‹–› •–‹–—–‹‘ƒŽ ˜‹”‘‡–  ‘‘‹‡•‘ˆ ƒŽ‡ Top Management Team Characteristics Firm Resources Firm Variables Age, Size, Financial Strength, Location, Origin etc. Extent Speed Scope Competencies Differentials/Proximity Generic Strategies Functional Strategies Entry Strategy Financial Outcomes Non-financial Outcomes Figure 2. Source: Zahra and George (2002). international entrepreneurship is explained by environmental, organizational and strategic factors (Figure 2). The organizational factors include the top management team and other assets available to the organization. In this framework, strategic and environmental factors are considered as moderators of the relationship between organizational factors and international entrepre- neurship dimensions. The benefits of going international by an entrepreneur are described under competitive advantages in the form of financial and non-financial outcomes. The two frameworks of entrepreneurship described above consider entrepreneurship as a culmination of several forces. They distinguish between domestic and international entrepreneurship. These frameworks are woefully inadequate in explaining factors that lead entrepreneurs to go online, as opposed to going international. To illustrate how these two frameworks are inadequate, consider the case of an online business such as eharmony.com. Dr. Neil Clark Warren, a renowned relationship expert and author of several books, started this firm in 1999. Within two years of its formation, this firm was profitable and, in 2003, the chairman received the Entrepreneur of the Year Award from Ernst and Young. Existing frameworks on entrepreneurship would focus on factors such as government influences, management characteristics and strategic factors, but would minimize or ignore the use of technology in the success of the entrepreneurship venture. In the case of eharmony.com, it was the convenience, anonymity and provision of a unique matchmaking service that led to its uploads/Finance/ a-conceptual-framework-for-describing-online-entrepreneurship.pdf

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