Entrepreneurial Failure: A Learning Approach

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Trudeau, Jack (2010) Entrepreneurial Failure: A Learning Approach. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

It is widely acknowledged that entrepreneurs play a vital role in the process of economic growth (Schumpeter, 1950). While the majority of research has tried to explain entrepreneurial success, very little work has been carried out on failure. Due to the high levels of uncertainty and novelty associated with entrepreneurial ventures, many new ventures fail in the start up period, with reports estimating that failure rates are as high as 90% in the first five years of business (Shane, 2008). Failure – a loosely defined term – can range from complete venture liquidation to the inability to meet sales objectives. Consequently, for the purpose of this research we will be using McGrath’s (1999:14) definition: ‘failure is the termination of an initiative that has fallen short of its goals’, with ‘falling short of its goals’ not referring to a definitive termination of an activity, but rather that they failed to be achieved.

As a result, this study attempts to redress this balance by providing an exploratory investigation into the effects of emotions on the entrepreneurial learning experience following a venture failure, and the subsequent impact this has on their behaviour. It aims to investigate the variation in reaction between different types of habitual entrepreneur as a result of their attachment to their business, whilst also attempting to understand the reasoning behind their perceived cause of the failure. The objective of the research is to try to understand how venture failure influences entrepreneurs in terms of their grief, and consequently how this grief affects their ability to learn from the experience. In this way, while there have been various researchers who have attempted to understand why entrepreneurs act like they do (Wright et al. 1997a; Ucbasaran et al. 2001), there has been relatively little mentioned about how they have overcome their failures, and the processes involved with this.

Results from this study found confirmatory aspects with previous literature, but also brought forth supplementary, novel findings. Such findings could either be used to guide future entrepreneurs, educating them about the cognitive aspects of failure, or they could stimulate further academic investigation, due to their exploratory nature.

Item Type: Dissertation (University of Nottingham only)
Depositing User: EP, Services
Date Deposited: 18 Jan 2011 15:38
Last Modified: 05 Jan 2018 15:54
URI: https://eprints.nottingham.ac.uk/id/eprint/23910

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