Macro and Micro Analysis

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APPROACHES TO ENTREPRENEURSHIP

To understand the nature of entrepreneurship, it is important to consider some of the theory development so as to better recognize the emerging importance of entrepreneurship. The research on entrepreneurship has grown dramatically over the years. As the field has developed, research methodology has progressed from empirical surveys of entrepreneurs to more contextual and process-oriented research. As yet, no comprehensive theory base has emerged, however.

A theory of entrepreneurship is defined as a verifiable and logically coherent formulation of relationships, or underlying principles that either explain entrepreneurship, predict entrepreneurial activity (for example, by characterizing conditions that are likely to lead to new profit opportunities to the formation of new enterprises), or provide normative guidance (that is, prescribe the right action in particular circumstances).13 As we are now in the new millennium, it has become increasingly apparent that we need to have some cohesive theories or classifications to better understand this emerging field.

In the study of contemporary entrepreneurship, one concept recurs: Entrepreneurship is interdisciplinary. As such it contains various approaches that can increase one's understanding of the field. Thus we need to recognize the diversity of theories as an emergence of entrepreneurial understanding. One way to examine these theories is with a "schools of thought" approach that divides entrepreneurship into specific activities. These activities may be within a "macro" view or a "micro" view, yet all address the conceptual nature of entrepreneur ship.

The Schools of Entrepreneurial Thought

In this section we will highlight the ideas emanating from the macro and micro views of entrepreneurial thought, and we will further break down these two...