Factors Influencing Opportunity Recognition Process
Question:
Discuss whether individual characteristics are significant in the opportunity recognition process. Drawing on the literature, explain the other factors that can influence the process of opportunity recognition and development.
Introduction
An opportunity is a favorable set of circumstances that creates a need for a new product, service or business (Baron.,2006. p104). An opportunity cannot be separated from an individual. At the individual level, thinking about opportunities depicts an understanding of the empirical reality of aspiring and acting entrepreneurs. At the individual level, a notion of possibilities recognition requires judgement about whether or not specific instances represent opportunities, and this creates a tension between ex-post insight and ex-ante foresight of entrepreneurs(Baron.,2006. p104). Opportunity recognition, therefore, is ways in which entrepreneurs identify potential ways towards defining business based on the possibilities that they identify and is characterised of many factors such as the influence of business and general environment. The purpose of this essay is to explain the significance of individual characteristics and other factors that influence opportunity recognition and development.
Individual Characteristics
Entrepreneurial opportunity recognition puts an emphasis on a person’s recognition and exploitation of potential business ideas and opportunities, which can be viewed as an individual’s entrepreneurial strategy in discovering resources to generate innovative outputs (Amage et.al., 2014. p221). Employees who can see and exploit potential opportunities in the business environment that competitors do not pay close attention to can serve as a unique competitive edge. Therefore, individual entrepreneurial opportunity recognition characteristics lead to a better understanding of new knowledge and technology useful to increase ideas(Amage et.al., 2014. p221). Two personal traits link to favorable opportunity recognition, which includes:
Self-Efficacy
This character trait leads to optimism and a higher propensity to see opportunities rather than threats. Self- efficacy involves belief’s about one’s ability to accomplish specific tasks and influences entrepreneurs when choosing to learn and the goals they set for themselves (Comer and Ho., 2010. p653). It also affects the individuals effort and persistence when learning difficult tasks. Self-efficacy has three dimensions: magnitude, the level of task difficulty an individual believes they can attain; strength, the conviction regarding significance as strong or weak; and generality, the degree to which the expectation is generalized across all situations(Comer and Ho., 2010. p653). An entrepreneurs sense of capability influences his perception, motivation, and performance. Therefore, this feature becomes significant in the opportunity recognition by an entrepreneur.
