The opportunity recognition framework of Hong Kong SMEs

Abstract

"The heart of entrepreneurship is the creation and/or recognition of opportunities," (Timmons et al, 1987, p.409). Although there is no universal definition of entrepreneurship, opportunity recognition has been viewed as the central definition of the phenomenon (Hills et al., 1997). This study presents an opportunity recognition framework in the Hong Kong SMEs context. Guanxi and four trait variables, namely, self-monitoring, extroversion, entrepreneurial self-efficacy and creativity are the independent variables in the framework while the number of opportunities recognized is the dependent variable. The primary goal of this study is to examine the relationship between entrepreneurs' personal traits (self-monitoring, extroversion, self-efficacy and creativity) and the number of opportunities recognized as the latter was regarded as key to entrepreneurship (Christensen et al., 1994; Gagio, 1997; Gaglio and Katz, 2001; Gartner et al., 2003; Kirzner, 1997; Shane and Venkataraman, 2000). Also, this study aims at (1) providing insights of antecedents of guanxi; (2) looking into the mediating effect between self-monitoring/extroversion, guanxi and the number of opportunities recognized; (3) exploring a new dimension of self-monitoring construct in Chinese context; and (4) examining different personalities of individuals in recognizing opportunities because the latter is viewed as an individual-level phenomenon (Hills et al., 1999). The sample of this study was constituted of entrepreneurs from Hong Kong SMEs. A mail survey was used to test the relationships between different constructs. In a sample of 162 SMEs' entrepreneurs, the findings of the mail survey demonstrated support for four of the nine hypotheses. The findings suggested that extroversion, entrepreneurial self-efficacy and creativity were positively related to the number of opportunities recognized. In particular, extroversion was found to be the antecedent of guanxi.