**6.3 Established frameworks in innovation and entrepreneurship studies**

Our discussion of established frameworks in innovation and entrepreneurship studies is incomplete if we do not include Schumpeter's 1940 theory of business cycles and development in which he points out innovation and entrepreneurship [70, 73] to


#### **Table 2.**

*Barriers to innovation in different European countries [72].*

**Figure 3.** *Brazeal and Herbert's [75] model of the entrepreneurial process.*

be the 'central feature of economic development' *p*96 and, as Sledzik [74] points out, the 'gales of creative destruction'. Further, an entrepreneur should reform and revolutionise production by exploiting inventions and untried technology. His framework is synonymous with the theories on disruptive innovation. **Figure 3** presents Brazeal and Herbert's [75] model of the entrepreneurial process, which links innovation and entrepreneurship. The emphasis is that innovation and entrepreneurship should complement each other because 'innovation is the source of entrepreneurship and entrepreneurship allows innovation to flourish' *p*13 [76].

There are also other established frameworks on innovation and entrepreneurship. For instance, Audretsch and Feldman [67] have argued that small and medium enterprises drive innovation in some industries. Further, Mahemba and De Bruijn [20] provide two useful frameworks—that is, *innovation and its adoption process* as well as *model of innovation activities of Small and Medium Entrepreneurs (SMEs)*. The former examines the key innovation process and activities, the summative products of innovation and the newness of innovation. Other important attributes of this framework include how the external environment influences generation and adoption of innovation. The latter – *model of innovation activities of SMEs –* examines how existing entrepreneurial characteristics and capabilities influence innovativeness. The other key attributes and variables include size of the market, knowledge and technological information.

**Figure 4** is a model linking innovation to entrepreneurship. In this model, McFadzean and others [77] demonstrate how an organisation's performance is determined by its innovativeness and entrepreneurial capabilities via a combination of external and internal variables as well as the entrepreneur's attitudes and actions. The innovation process comprises idea generation, problem solving as well as implementation and diffusion. Whilst the entrepreneur component comprises strategic variables, external and internal variables, linking up innovation and entrepreneurship requires positive attitude, strategic vision and effective actions. Key to this framework is that innovation should be the output leading to entrepreneurship (the outcome), and yet in South Africa, there seems to be an emphasis on entrepreneurship.

Crossan and Apaydin's [1] determinants of innovation include four frameworks – that is, the upper echelon theory, resource-based view, dynamic capabilities and process theory – that one can use to interpret empirical results emanating from an innovation and entrepreneurial study. Hambrick and Mason [78] pioneered the upper echelon

*A Conceptual Framework for Researching Disruptive Innovation and Innovative Business Models DOI: http://dx.doi.org/10.5772/intechopen.111808*

#### **Figure 4.**

*McFadzean and colleagues [77] depiction of the relationship between innovation and entrepreneurship.*

theory, which postulates that one can use managerial characteristics, especially those of top management, to predict or estimate an organisation's performance. These characteristics, which include age, tenure and prior experience, influence how these individuals formulate and implement business strategies to influence the financial position of the organisation [79, 80]. However, Carpenter, Geletkanycz and Sanders [81] have argued that this framework is limited because it is centred on the demographic parameters of management. It inherently ignores other important aspects such as power, executive celebrity status and networks that also affect an organisation's financial performance. Further, some managers make decisions that reflect aspirations rather than past experience.

The resource-based view (RBV) probably dates back as far as 1930s. However, available documentation shows that it was originally coined by Edith Penrose in 1959 [82]. Later on, other scholars including Hamel and Prahalad [83] as well as Barney [84] strengthened its argument and incorporated it into strategic management. As the name suggests, the fundamental argument of this framework is that organisations use their internal strategic resources to improve their competitive advantage. These resources can be tangible or non-tangible and should be mobile and heterogeneous. Kraaijenbrink and colleagues [85] point out that the resources should be valuable, rare, costly to imitate and organised to capture value. The RBV provides for an immediate-face-validity, and it's simple to understand and implement. However, it does not emphasise the role of managers and focuses on internal resources and capabilities, therefore neglecting the contribution of the manager's ability to mobilise

external resources [86]. Further, it is difficult to generalise this framework across different organisations, and it is mainly applicable to large organisations with a large market share and financial power [85].

The strategic management literature shows that Pisano, Teece and Shuen [87] coined the dynamic capabilities framework. It follows on the resource-based view to articulate that an organisation has the ability to integrate internal and external resources in response to changing business conditions. It provides for managers to'… extend, modify, and reconfigure existing operational capabilities into new ones that better match the environment' *p*239 [88]. When implemented in a stable conducive business environment, the framework enhances performance [89]. However, the framework provides for improving on competitiveness only, and even then, this is not guaranteed because there are other factors to consider, and results only show in the long run [90].

Harre and Madden [91] coined the process theory, which stipulates that (i.) similar inputs transformed by similar activities produce similar outputs and probably outcomes provided that (ii.) key, constant necessary conditions are present. Its use of probabilistic information on inputs and activities to predict certain outcomes under necessary supportive conditions [92] constitutes its strength. Therefore, as Van de Ven and Poole [93] have argued, a process identifies and describes generative mechanisms that lead to actual outputs and outcomes as well as anticipate diversions and accompanying contingencies. Unfortunately, the framework assumes unattainable perfect conditions and a conducive environment where inputs and activities are aligned. Another drawback is that the theory requires one to have an understanding of events and patterns in order to fully apply it.
