COMPETENCE DEVELOPMENT IN ENTREPRENEURSHIP - Springer

Chapter 19 COMPETENCE DEVELOPMENT IN ENTREPRENEURSHIP The Role of University Education Greet Fastré and Anita Van Gils University of Maastricht, Faculty of Economics and Business Administration, Maastricht, the Netherlands

1.

INTRODUCTION

At present, entrepreneurship is of fundamental importance for our society (Thornton, 1999; Bruyat & Julien, 2000). Entrepreneurial companies contribute to economic welfare as they increase the innovative capacity of the economy. These enterprises also lead to more flexible markets and intensified competition. Moreover, through entrepreneurship, new businesses and jobs are created (De Clerck & De Sutter, 2003), an issue of utmost importance in today’s global business environment. To contribute to societal welfare, an entrepreneur is supposed to be successful. Scientific research relates successful entrepreneurship to three factors: (1) the organization (organizational theory) and its resources (resource-based theory), (2) the environment (strategic management theory), and (3) the individual (psychology, organizational behavior, entrepreneurship theory) (Baum, Locke, & Smith, 2001; Dollinger, 2003). This chapter focuses on the last factor, the entrepreneur. A bulk of studies has tried to identify traits and motives of successful entrepreneurs; however, the concepts identified (internal locus of control, need for achievement, etc.) have produced weak support (Baum et al., 2001). Recently, authors have shifted their research focus from studying entrepreneurial traits to the study of competencies (Man, Lau, & Chan, 2002). More specifically, they try to distinguish those competencies that entrepreneurs need in order to become successful (Mullins, 1996; Baum et al., 2001; Man et al., 2002). The first 385 M.K. McCuddy et al. (eds.), The Challenges of Educating People to Lead in a Challenging World, 385–398. © 2007 Springer.

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Greet Fastré and Anita Van Gils

aim of this chapter is to present an overview of the competencies identified in the literature as being critical for the success of an entrepreneur. As several of the competencies identified in the first part of this chapter can be taught, potential entrepreneurs should be educated in a way that these competencies are enhanced. This has to be done on all levels, from primary school to university education. Some studies have focused on the role of education in stimulating entrepreneurial behavior, but almost no attention has been given to the competency approach for developing university curricula. Therefore, the second aim of this chapter is to examine the role of universities in the process of teaching entrepreneurial competencies. The remaining part of this chapter is structured as follows. First, the results of a literature review related to entrepreneurial competencies are presented. Secondly, the role of university education in teaching potential entrepreneurs is discussed. Finally, this study examines the curricula of two universities having a different perspective on entrepreneurship education. By comparing these two universities, conclusions can be drawn on the competency development pattern in both cases. Based on this information, useful advice will be formulated with regard to the development of university curricula that would add value to the study of future entrepreneurs.

2.

ENTREPRENEURIAL COMPETENCIES

Given the mixed support for the relationship between founder’s characteristics and venture performance, Chandler and Jansen (1992) shifted their research focus to entrepreneurial competence research. Based on a questionnaire that allowed founders to provide self-evaluations of their competencies, they concluded that successful entrepreneurs rated themselves as being proficient in the entrepreneurial function (opportunity recognition), as well as in the managerial and technical-functional roles. A follow-up study (Chandler & Hanks, 1994) confirmed the earlier research findings: founder competencies moderated the relationship between the quality of the opportunity and firm performance and the relationship between access to resource-based capabilities and firm-performance. Since the introduction of the competency concept in entrepreneurship research (Chandler & Jansen, 1992; Chandler & Hanks, 1994), several scientists have selected this approach to study the impact of the individual on firm success criteria. Mullins (1996) attested that competency facilitates responsive behavior to changing market conditions when the firm’s performance was not favorable in prior years. He stressed the importance of the entrepreneurs’ ability to build relationships with current and prospective

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customers. Baron and Markman (2000) confirmed the importance of the entrepreneurs’ social skills, as it is a specific competence that helps the entrepreneur to interact effectively with others. Building on job performance theory, Baum et al. (2001) introduced the concepts ‘general’ and ‘specific’ competencies in the entrepreneurship literature. Competencies are defined as individual characteristics such as the knowledge, skills, and/or abilities required to perform a specific job (Baum et al., 2001, p. 293). Specific competencies are those related to the industry the firm is operating in and to the technological knowledge required within it. General competencies refer to management skills that are independent of the firm context, as oral presentation skills, the use of power, and decisionmaking ability. They concluded that the entrepreneurs’ specific competencies are direct predictors of venture growth, while general competencies have significant indirect effects. For this research project, the competency perspective as presented by Man et al. (2002) has been adapted, as these authors emphasized the process or behavioral approach. According to Man et al. (2002, p. 124), entrepreneurial competencies are “higher-level characteristics encompassing personality traits, skills and knowledge, and therefore can be seen as the total ability of the entrepreneur to perform a job successfully.” Six major entrepreneurial competencies are distinguished: (1) opportunity, (2) relationship, (3) conceptual, (4) organizing, (5) strategic, and (6) commitment competencies. Table 1 presents the six competency groups, together with their behavioral focus (column 2). In column three, detailed examples of these competencies are presented, as they were identified in this literature review. The last column specifies the references used. In this research project, we will focus on the six competency areas indicated in Table 1, as these competencies are changeable and learnable (Man et al., 2002). We do not take into account personality traits, as they are mainly fixed at the moment a student enters into university education.

3.

UNIVERSITY EDUCATION IN ENTREPRENEURSHIP: A COMPETENCIES BASED-APPROACH?

Although the first entrepreneurship course was introduced in the 1940s at the Harvard Business School (Katz, 2003), it took until the 1970s before the number of universities offering these types of course increased dramatically (Vesper & Gartner, 1997). Institutional, industry specific, and societal changes were at the basis of this major shift in emphasis (Vesper & Gartner,


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Table 1: Classification of Entrepreneurial Competencies (Table was adapted from Man, Lau, & Chan, 2002)

Competency Area

Behavioral Focus

Competencies

References

Opportunity competencies

Recognizing and developing market opportunities through various means

Adventurous, driven by ideas, being open for opportunities, opportunity recognition

Relationship competencies

Person-to-person or individual-togroup-based interactions

Conceptual competencies

Different conceptual abilities, which are reflected in the behaviors of the entrepreneur

Management skills, negotiating, convincing skills, social skills, communication skills, conflict management, building trust, stress management Generalist instead of specialist, decision skills, creative problem solving, risk taking, innovative, ambitious, pro-activeness

Organizing competencies

Competencies related to the organization of different internal and external human, physical, financial, and technological resources Competencies related to setting, evaluating, and implementing the strategies of the firm Competencies that drive the entrepreneur to move ahead with the business

Casson (1982); McClelland (1987); Mitton (1989); Chandler and Jansen (1992); Chandler and Hanks (1994); Snell and Lau (1994); Gasse (1997); Bartlett and Ghoshall (1997); Baum et al. (2001); Beaver (2002) McClelland (1987); Ibrahim (1987); Mitton (1989); Chandler and Jansen (1992); Durkan et al. (1993); Bird (1995); Mullins (1996); Bartlett and Ghoshall (1997); Gasse (1997); Baron and Markman (2000); Gibb (2002); Baron and Shane (2005) Casson (1982); McClelland (1987); Mitton (1989); Chandler and Jansen (1992); Durkan et al. (1993); Snell and Lau (1994); Bird (1995); Bartlett and Ghoshall (1997); Gasse (1997); Baum et al. (2001); Gibb (2002); Beaver (2002); Morrison et al. (2003); Sternberg (2004) Casson (1982); McClelland (1987); Mitton (1989); Chandler and Jansen (1992); Durkan et al. (1993); Snell and Lau (1994); Bartlett and Ghoshall (1997); Gasse (1997); Baum et al. (2001); Beaver (2002)

Strategic competencies

Commitment competencies

Analytical skills, teambuilding, calculating skills, delegation and organization skills, leading employees, training and controlling

Strategic thinking, time management, project management

McClelland (1987); Mitton (1989); Durkan et al. (1993); Snell and Lau (1994); Bird (1995); Bartlett and Ghoshall (1997); Gasse (1997); Gibb (2002)

Willing to work hard

Ibrahim (1987); McClelland (1987); Mitton (1989); Chandler and Jansen (1992); Durkan et al. (1993); Bartlett and Ghoshall (1997); Gibb (2002)


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1997; Katz, 2003). Nevertheless, even in today’s society, sources of friction remain between academia and entrepreneurship education (Klofsten, 2000; Laukkanen, 2000), and several members of the academic community claim that this specific type of education is not required at a university level. Prominent entrepreneurship researchers (Chia, 1996; Gibb, 2002) claim the opposite at universities the importance of entrepreneurship courses will grow even more in the future. Moreover, entrepreneurship education is becoming an evaluation item for famous accreditation systems such as the Association to Advance Collegiate Schools of Business (AACSB) (Fiet, 2000b). The academic literature on entrepreneurship education focuses on four subjects: (1) its history and evolution, (2) the content of the programs, (3) the process and pedagogical issues of entrepreneurship education, and (4) the results of these courses or programs. Several researchers have focused on stipulating the history or evolution of entrepreneurship education (for an overview, see Katz, 2003), but most of the results published refer to the American situation. Much less emphasis has been given to monitoring the achievements of these entrepreneurship programs (Gibb, 2002). However, two Scandinavian studies do report positive results. Kolvereid and Moen (1997), using Norwegian data, indicate that graduates with an entrepreneurship major are more likely to start new businesses and have stronger entrepreneurial intentions than other graduates. Based on a Swedish case, Klofsten (2000) concludes that entrepreneurial behavior can be stimulated and that, as a result, the quality of new projects and firms will be improved. Further research on this topic is mandated. However, as our research project focuses on stimulating entrepreneurial competencies, the next sections of this paper will describe content and process issues in entrepreneurship education. Within universities, the topics and the types of the entrepreneurship courses offered differ a lot (Vesper & Gartner, 1997; Fiet, 2000a; Gibb 2002). A major issue at the basis of these divergent views is the definition of entrepreneurship (Gartner, 1990; Gibb, 2002). Katz (2003) uses the ‘prairie populist’ model to describe entrepreneurship, in which he refers to academic disciplines and specialties including entrepreneurship, new venture creation, entrepreneurial finance, small business, family business, free enterprise, private enterprise, high-technology business, new product development, micro-enterprise development, applied economic development, professional practice studies, women’s entrepreneurship, minority entrepreneurship, and ethnic entrepreneurship. Given that both the general public and academics perceive the entrepreneurship concept in this way, different views also exist on what constitutes an entrepreneurship program. Fiet (2000a), in comparing 18 syllabi of entrepreneurship academics, concluded that those syllabi

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encompassed 116 different topics, of which only one third of the topics overlapped. Leading topical coverage areas were strategy/competitive analysis, managing growth, discovery/idea generation, risk and rationality, financing, and creativity. He argues that academics have the responsibility to put more emphasis on teaching aspiring entrepreneurs theory, instead of excessively describing the entrepreneurial phenomenon. Different researchers have also examined the types of courses included in entrepreneurship programs (Vesper & Gartner, 1997; Gibb, 2002). Courses most frequently offered include entrepreneurship or new venture creation, business plans, small business management, financing entrepreneurial businesses, networks, and family business. Given the current global society, with its many sources of uncertainty and complexity, Gibb (2002) argues to extend the notion of entrepreneurship to one of enterprising behaviors and enterprising organizations. In this way, one could focus on encouraging effective enterprising behavior in all kinds of organizational, social, and economic circumstances. This involves abandoning the functional approach in education, and putting the emphasis on learning ‘entrepreneurial capacities.’ The capacities described by Gibb (2002) are complementary to the competencies as described by Man et al. (2002), and are therefore included in Table 1. According to Gibb, embracing a wider enterprise and entrepreneurship paradigm is a task a university can fulfill more easily than a business school. With respect to the process of entrepreneurial teaching, most authors plead for a major paradigm shift (Chia, 1996; Fiet, 2000a; Laukkanen, 2000; Nunn & Ehlen, 2001; Gibb, 2002). All agree that the current university’s focus on the individual’s analytical rigor should be abandoned. However, they all offer different though not contradicting pedagogical directions. Chia (1996) indicates that the cultivation of the ‘entrepreneurial imagination’ is an important task for universities in order to prepare future managers for the complexities of a global environment characterized by heterogeneity, nervousness, and vastly different socio-political and economic network configurations. He further argues: “Paradoxically, for modern management educators, the very attempt to reduce the complex phenomena of successful managers and entrepreneurs in order to facilitate pedagogical priorities violates against the essence of entrepreneurial thinking since,}, it is the very act of breaking away from the dominant frames of thought and established conventions that sets the entrepreneur apart from the others” (Chia, 1996, p. 415).


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In this respect, Chia (1996) emphasizes that entrepreneurship education should be directed at the opening of visions. Fiet (2000a) discusses the development of student approved learning contents in order to stimulate the acquisition of theory-based competencies. Therefore, teachers should delegate responsibility for classroom meetings to students; they themselves should monitor the competency-development process. Laukkanen (2000) indicates that entrepreneurship education should be less focused on the individual mindset; instead universities should become business-generating models. Shifting the educational paradigm also involves a shift in the knowledge base, attitudes, and behaviors among academic teaching staff. Nunn and Ehlen (2001) propose team-teaching as an approach to overcome lack of competence among teaching staff. Gibb (2002) suggests that universities should integrate in communities of practice, in order to learn from them. The literature review as presented in the previous sections clearly shows that only a few researchers (Fiet, 2000a; Gibb, 2002) have touched upon the competency-based approach in entrepreneurship education. However, within education sciences and human resource management, the advantages of using a competency approach for learning has been demonstrated in several contexts (see for some overview articles: Canning, 1990; Stewart & Page, 1992; Lawson & Limbrick, 1996; Ellström, 1997; Burchell & Westmoreland, 1999; Nedermeijer & Pilot, 2000; Van der Klink & Boon, 2002). Van der Klink and Boon (2002) applied the competency-based approach to the development of a university curriculum in economics. In their opinion, this approach helps to develop rich competency profiles for specific jobs, thereby including the specific contexts of different job situations. These balanced insights provide a basis for curriculum renewal. Besides, they can be used as an instrument to convince teachers and trainers of the necessity and feasibility of this renewal. The aim of this paper is to extend competency-based research in the area of entrepreneurship education and university curricula development. More specifically, by analyzing the perception of university staff, students, and alumni on the importance of entrepreneurial competencies and an inspection of their respective university curricula, conclusions can be drawn on the competency development pattern in both cases. Moreover, based on this information, useful advice will be formulated with regard to the development of university curricula that adds value to the study of future entrepreneurs.


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4.

RESEARCH DESIGN

4.1

Method

As little empirical data are available regarding competency-based curriculum development at universities, we opted for the case design. Yin (1989) claimed that case studies are the preferred strategy when ‘how’ or ‘why’ questions are posed, as is the case in this research project. Furthermore, Eisenhardt (1989, 1991) indicated that this research approach is especially appropriate in new topic areas. Different cases often emphasize complementary aspects of a phenomenon, and by putting those aspects together researchers can draw a more complete theoretical picture (Eisenhardt, 1991).

4.2

Research Setting

We selected two universities: the LUC (Limburg University Centre) in Belgium and the UM (Maastricht University) in the Netherlands. These universities were chosen because of the different curricula they offered. At the LUC, a special ‘Entrepreneurship’ curriculum was developed for graduate students, which consisted of one full academic year dedicated to entrepreneurship courses. The most important courses offered are financial management in the start and growth phases, HRM, strategic innovation management, and business planning. At Maastricht University, developing students’ general scientific knowledge is more important than the education of job-related competencies. As a consequence, no specific entrepreneurship curriculum is offered and the number of entrepreneurship or small business courses is very limited. However, through skills courses, some attention is given to the development of general managerial competencies. Not only is the course content different at both universities, but the pedagogical approach also differs. At Maastricht University, students work in small groups of a maximum 14 students, and the Problem-Based Learning approach is the dominant paradigm. At the Limburg University Centre, the group consists of 15 to 30 students and besides group tasks, lecturing is the traditional teaching approach.

4.3

Sample

In order to get a perspective on the importance of the different entrepreneurial competencies as presented in Table 1 and to evaluate the university curricula, three different groups of respondents were asked for


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their opinions: alumni entrepreneurs, academic staff, and entrepreneurship students. The advantage is a triangulation of data sources within the different universities. First, we had four interviews with alumni of these universities in order to ascertain their perception on the importance of the different entrepreneurial competencies, and to investigate ex post how their universities had been preparing them for their entrepreneurial tasks. A second group of respondents was the academic staff of both universities. As not all staff members are involved in entrepreneurship courses, only those academics that stipulated a relationship to entrepreneurship in their course descriptions were interviewed. Besides four staff members of the LUC and five of the UM, the deans of both faculties were asked to express their opinion on the role of a university in entrepreneurship education. Finally, twenty-nine students of the entrepreneurship program at the LUC, and twenty-two students that participated in the Advanced Business Innovation course (one of the few UM courses having a strong emphasis on entrepreneurship) received a survey in relation to the topics under study.

5.

INTERVIEW AND SURVEY RESULTS

All respondents agree that the entrepreneurship competencies as identified by Man et al. (2002) are important for becoming successful as an entrepreneur. However, respondents of the two universities do not agree on the importance ranking of those competencies. Especially the opinion of the entrepreneurs differs a lot. Whereas the Belgian entrepreneurs both emphasize the need for strategic and conceptual competencies, the Dutch entrepreneurs relate their success to their relational and commitment competencies. According to them, for conceptual and strategic competencies, other people can be recruited within the enterprise. Surprisingly, also the academic staff members of the Limburg University Centre and their students do put more emphasis on strategic competencies than do their Dutch counterparts. Furthermore, almost all respondent groups stress the importance of opportunity competencies. They all perceive this competency as a necessary condition to be able to start and become successful as an entrepreneur. As stipulated before, the university programs the entrepreneurs received differed in content and process. According to the Belgian entrepreneurs, the functional course approach has helped them to enhance their entrepreneurial competencies. However, if they would be able to change the curriculum, they would include courses taught by entrepreneurs and focus more on general problem-solving skills. The Dutch entrepreneurs valued the general

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course approach within their university program. Furthermore, their entrepreneurial competencies were enhanced by the responsibility they had as students for their learning outcomes (as a result of the PBL method). The emphasis on presentation skills was also perceived as very valuable. If the UM entrepreneurs had to change the curriculum, they would also stimulate the interaction between entrepreneurs and students. Moreover, the development of leadership skills should get a more central role within the curriculum. According to them, this is an important issue not only for potential entrepreneurs, but also for future managers. The deans of both universities acknowledge the importance of entrepreneurship. They differ however with respect to the impact of it on the curricula of their universities. According to the dean of the LUC, an important task of the university is to professionalize the local economy, and therefore educating potential entrepreneurs has a high priority. According the interim dean of the UM, it is the combination of a general academic education and a focus on certain skills that adds value to the profile of potential entrepreneurs. Within the UM, creativity is important in several courses, and students can also enhance their entrepreneurial competencies by going abroad during a certain time period of their study. However, he doubts if graduated university students will possess enough technological knowledge to enter markets with new products or services. For the future, he would like to increase the entrepreneurial focus within the Masters curricula. The members of the academic staff within both universities enlarge the perspectives offered by the deans. The LUC professors describe the course content as being very relevant for future entrepreneurs. They also try to avoid too much lecturing, by including case studies and guest lectures in their courses. Most UM academics indicate the lack of focus on entrepreneurial issues in UM courses. However, all agree that the PBLeducation system and the different skills trainings enhance the entrepreneurial competencies described in Table 1. Within the survey, students were first asked to indicate their entrepreneurial intentions. Whereas only about 45% of the LUC students both think about and express a preference for starting his or her enterprise in the future, among the UM students this figure increases to 80%. Both student groups share the perception that their university prepares them most for the organizational competencies an entrepreneur needs, and least for the opportunity competencies. Besides, UM students are dissatisfied with the preparation of the commitment competencies. This result can be interpreted in two ways. First, it can indicate that these students are not prepared for a job situation in which they have to work hard. Another explanation can be that they do not feel committed enough to entrepreneurship, as their study does not confront them with entrepreneurial courses and practice. This last


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reason seems to be the more realistic. If these students could change the curriculum, they would offer more entrepreneurship and leadership courses. Besides, like their Belgian colleagues, they would stimulate the interaction with entrepreneurs, through guest lectures and internships. The Belgian students would especially change the pedagogical approach to teaching; they prefer an improved focus on creativity, student responsibility, and communication.

6.

CONCLUSION

Entrepreneurship and entrepreneurial behavior are of utmost importance in the current global economy. Therefore, education institutions should stimulate this kind of behavior among the individuals within society. Researchers emphasize the central role universities have to fulfill, as they better than business schools can offer the conceptual frames needed. Within the entrepreneurship literature, much debate exists in relation to the content and process approach of university programs in entrepreneurship. The competency approach, as developed within HRM and education sciences, has only recently been introduced. However, competence statements related to specific jobs and contexts that are used in learning situations are a basis of the debate concerning the goals to which learners are aspiring (Burchell & Westmoreland, 1999). Therefore, the competence statements represent an ideal starting point for discussing content and process issues in the development or reformulation of university curricula. The results of our empirical research project confirm the importance of the six entrepreneurial competencies as identified by Man et al. (2002) and presented in Table 1. The case studies also confirm the context specificity of competencies. The Belgian respondents perceive the strategic competencies as far more important than their Dutch counterparts. Dutch entrepreneurs perceive their relational competencies as a basis for their success. These results have important implications for university curricula development. Since the required competencies vary within different contexts (countries, jobs), academics should be very careful in copying international management or entrepreneurship programs. Ideally, competency profiles of groups of alumni having the same job specification should be developed first. Then based on the ambitions of the current students and the competency profiles developed, university programs should be evaluated, discussed, and refocused. Our study also confirms the necessity to include entrepreneurship courses within university curricula. The UM students, studying at a university that emphasizes general academic development, clearly indicate their lack of

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opportunity and commitment competencies. Moreover, in order to enhance their entrepreneurial competencies, they would like to integrate entrepreneurship and leadership courses into the curriculum. Both the university dean and UM staff members recognize this problem, and the first steps are being taken to start an introductory entrepreneurship course in the bachelor program. However, according to the authors, more in-depth research should be executed within the faculty in order to study the future job profiles of the students. Given the ambition of many students to start their own enterprises, the education of entrepreneurial competencies should be integrated in all parts of the university curriculum. Moreover, as entrepreneurial behavior adds value, both in small and large organizations, students as well as Dutch firms would benefit from a new educational approach. Although Limburg University already focuses on entrepreneurship education, our results suggest that entrepreneurship programs should be evaluated continuously. Today’s entrepreneurs are operating in a fastchanging knowledge-based environment, and the competencies required to become successful can be dynamic too. LUC students could benefit from creativity and technical-oriented courses in order to improve their opportunity competencies. In relation to the process of entrepreneurship education, the classical lecturing approach does not seem to satisfy students in these programs. They would like to become more involved in approving the learning content and to get increased levels of responsibility in order to improve their leadership skills, communication skills, and independence. Both students and entrepreneurs would also value increased interaction between themselves. Although guest lectures could be a means to solve this problem, Hayward (2000) claims that involvement of entrepreneurs in university programs often leads to high risks of knowledge being offered as ‘anecdotes’ or ‘war stories.’ Offering internship possibilities within entrepreneurial firms or contexts could be a better solution.

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