Description
On this particular paper regarding action learning for developing co creation and change management skills entrepreneurship.
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Action learning for developing co-creation and change management skills
Tiit Elenurm
Estonian Business School
Entrepreneurship Department
A. Lauteri 3, 10114 Tallinn, Estonia
[email protected]
Abstract
The paper uses educational learning by doing prism for linking the research on co-creative
entrepreneurship to the challenge of change and crisis management in business start-up teams
and in innovation ecosystems. Inter-organizational interventions and enabling young people
to act as change agents in networks and temporary teams is a tool for facilitating creativity
and societal dynamics. The role of action learning and action research in enabling new
personal knowledge management, business networking and co-creative entrepreneurship
opportunities for students that follow different paths of self-development is explained. Field
projects focused on identifying and implementing student’s own business opportunity vision
and field projects focused on assisting start-up entrepreneurs in developing and
internationalizing their business activities have different implications for change Business
opportunities in virtual networks can broaden the mental space and networking capabilities
for cross-border co-creation.
Key words: co-creation, crisis and change management, business opportunities, networking,
action learning.
1. Introduction
The global financial crisis has intensified discourse about the need to rethink changes driven
by short-term profitability objectives and related responsibility in organizations that as large
banks are for stakeholders and society too large to fail. External parties assume that
management in such large organizations should have foreseen the crisis and applied the ethics
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of care based on mutual trust and cooperation (Linsley and Slack, 2013). Strong
organizational culture and decades-long commitment to leadership development is presented
as a crucial tool for diminishing the impact of economic crisis on business organizations but
also for rapid recovery of health care organizations after a natural disaster (J oyner et al.,
2013). Influence of different national cultures and institutions on employee reactions of
organizational changes have been studied in established organizations from large and small
transition economies (Alas et al., 2012). Success of strategic organizational changes in large
organizations depends on vertical integration between organizational goals and relevant
human resource management strategies (Rees and J ohari, 2010).
A challenge for large organizations, including higher education, in rapidly changing
environment is resilience, ability of the system to absorb disturbances and maintain stability
(Lane et al., 2013). Business education should prepare students for career in large established
organizations assuming that during first years of their employment majority of new
employees have to absorb many changes but seldom manage to establish themselves as
change leaders for the whole organization. Entrepreneurship education has however different
change focus. The departure point for a new entrepreneur is not changing an existing
organization but creating a new one in order to use a business opportunity. In a start-up
process entrepreneurs usually do not start from recruiting a human resource manager. They
are not restrained by values of an established organizational culture but have crucial role in
shaping a new one. Start-up entrepreneurs that have born global ambitions face the challenge
of blending at quite early business development stages cultural values and communication
patterns representing different national cultures. They have to start building credibility and
trust in their relations with business partners. The lean start-up change management logic is
crucially different from the classical foresight and contingency planning based crisis
avoidance logic of large corporations.
Ries (2011) advocates the view that in the situation of extreme uncertainty it is better to
experiment with a minimum viable product in order to reveal the real needs of customers
instead of fine-tuning the product before the first attempt of commercialization. It can be
interpreted as validated learning through a number of small crises instead of following a long-
term innovation strategy that may lead to a dead end. When applying the lean start-up logic
combined with the “wide lens” for mapping the innovation ecosystem (Adner, 2012) the
discourse about change management inside boundaries of an organization has to be re-focused
on creating a new business organization as an element in a changing network of partners for
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co-creating innovation. Re-defining the change arena leads us to the objective of the paper:
to develop learning paths and learning methods that enhance innovative and internationally
competitive entrepreneurship.
In this paper the central research question is: What are the change and crisis management
implications of action learning practices that enable different modes of individual and co-
creative entrepreneurial activities?
2. Changing business opportunities and entrepreneurial orientations
Developing business opportunity identification skills has crucial role in the entrepreneurship
education (De Tinne and Chandler, 2004; Heinonen and Poikkijoki, 2006). Shane and
Venkataraman (2000) defined entrepreneurial opportunity as a situation, where new goods or
services could be introduced for greater revenue than their cost of production. Entrepreneurial
opportunity “windows” open and close as the result of changing markets and emerging
technologies. Entrepreneurial opportunity recognition can initiate learning and change
processes on the level of an individual but also on the level of groups or organizations.
Lindsay and Craig (2002) specify three stages of opportunity identification: opportunity
search, opportunity recognition and opportunity evaluation. Entrepreneurial opportunities
change depending on the development level of economy but also during economic cycles.
Crisis hurts growth in many industries but can open new windows of opportunity for new
entrepreneurs that are able to save costs of their business partners.
McMullen et al. (2007) and Plummer et al. (2007) explain that an entrepreneurial opportunity
can be either an objective construct visible to an entrepreneur or a construct created by a
knowledgeable entrepreneur. Discovery and creation views of entrepreneurial opportunity
have been contrasted by Alvarez and Barney (2007). Discovery view assumes that
entrepreneurs systematically scan the environment for competitive imperfections (Edelman
and Yli-Renko, 2010). Opportunity creation assumes creative “out of the box” thinking and
may lead to transforming existing markets and to creating a new innovation ecosystem. Adner
(2012) has studied several examples in consumer electronics, telecommunications and
introducing electric cars, where an opportunity to commercialize a radical innovation has not
been successfully used because of missing links in the adaptation chain between innovator
and end customers and inability to co-innovate. Change leaders have tried to do the right thing
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but not in the right time and not in co-operation with the right business partners for creating or
reconfiguring the innovation ecosystem. Participants and stakeholders in innovation
ecosystems have to co-operate in developing the ecosystem even if they are competitors.
Entrepreneurial motivations drive opportunity recognition and it is important to understand
how they vary across different types of entrepreneurs (Carsrud and Brännbäck, 2011) and are
reflected in individual or team-based business development priorities. Co-creation can support
synergy at different stages of the entrepreneurial initiative, starting from discovering or
creating business opportunities to implementing the business model and pooling resources for
daily operations and funding growth in the new venture. Co-creation activities across the
value chain can involve various touch-points and domains (Ramaswamy, 2009) and depends
on the resource bases of stakeholders. Stakeholder engagement skills are the very basis of
enterprise value creation when applying co-creation thinking (Ramaswamy and Ozcan, 2013).
In order to succeed in creating new business opportunities that depend on broader innovation
ecosystem, young entrepreneurs have to learn how to align their innovative business ideas and
ideas of business partners in order to create a new value chain.
Entrepreneurship researchers have developed the entrepreneurial orientation constructs that
integrate five dimensions: innovation, proactiveness, risk-taking, autonomy and competitive
aggressiveness (Lumpkin and Dess, 1996; 2001). Entrepreneurial orientation is reflected in
strategic choices and in managing the process of exploiting or rejecting business
opportunities. The construct of a single entrepreneurial orientation can be further developed
by differentiating several entrepreneurial orientations: imitative entrepreneurship, individual
innovative entrepreneurship and co-creative entrepreneurship (Elenurm et al., 2007).
Imitation in a non-saturated market can support market pro-activeness and the competitive
aggressiveness of a fast mover in recognising business opportunities that can be exploited by
transferring business models from more advanced markets without “reinventing the wheel”.
Such business behaviour does not assume core competence for delivering unique value based
on entrepreneur’s own product or process innovation development efforts. Successful
imitation, however, assumes not only an understanding of product life cycles, but also of
economic boom and crisis cycles in order to follow the right business ideas at the right time
and to sell the business before the business opportunity becomes unprofitable and exhausted.
Imitative orientation may sometimes mean illegal copying of products, but alternatively it can
be applied in the legal framework of representing some well-known trade mark, importing
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goods or taking a franchise. As the imitator is not offering any unique product or service, the
long-term success of the imitative orientation assumes the core competence for retaining the
cost advantage or changing the object of imitation when the competitive situation becomes
unfavourable. The imitative orientation is assumed to be successful in a business environment
where empty market niches can be filled by introducing business ideas that have proved their
effectiveness and efficiency in similar conditions in other markets. This should not be seen
simply as copying the ideas of other entrepreneurs, but also as a readiness to monitor and
introduce existing best practices efficiently without losing time inventing new “bicycles” if
the old ones can meet the needs of customers in the home market of the entrepreneur.
The individual innovative orientation is a good basis for entrepreneurial ventures in a business
environment, where creative differentiation is the main prerequisite for creating and retaining
local or international competitive advantage. This orientation will work for business growth if
core competence of the entrepreneur is sufficient to manage the change starting from the
creative idea until commercialization of the innovation. Entrepreneur has to be able to protect
his/her innovative solution and to individually control human resources and investments that
are needed in order to implement an innovative product or technology. Innovative
entrepreneurs have to understand if their new business idea corresponds to the business
opportunity. An important feature of innovator’s core competence is the ability to assess if
markets are ready for commercializing their innovative solutions. Innovative orientation can
be supported by the core competence in the field of new product and/or technology
development or by creative ways to re-define business boundaries and to combine existing
business ideas in a new way. This orientation will produce business growth if the creative
entrepreneur is able to protect his/her innovative intellectual capital and to individually
control human resources and investments that are needed in order to implement an innovative
product or technology. It is not guaranteed that long-term technology-driven innovative
product development can be aligned with short-term market proactiveness.
The co-creative orientation is a reflection of the emerging network economy of the 21st
century. Co-creative orientation assumes a readiness for networking and knowledge sharing
and a mutual trust in a business environment where, as in a brainstorming session, it is not
always possible to fix and protect authorship of the idea. Co-creative entrepreneurial
orientation supports open innovation for developing and combining new business ideas. Open
innovation assumes the use of purposive inflows and outflows of knowledge to accelerate
internal innovation and simultaneously to expand markets for the external use of innovation
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(Chesbrough et al., 2006). Co-creative entrepreneurship may also be implemented by
involving a large number of business owners in the business start-up process and/or by using
crowdfunding (Kuppuswamy and Bayus, 2013) for financing entrepreneurial initiatives.
Communities of practice (Wenger et al., 2002) can be seen as knowledge sharing and creation
tools that may lead to new interpretations of business opportunities for co-creation. Co-
creative entrepreneurial initiatives can emerge in formal or informal teams created in large
organizations but also in cross-border communities of practice that combine ideas from
different organizations and countries.
Individual innovators have to focus on protecting their innovative ideas, and as a result, their
opportunities to rely on open innovation and networking practices may be more limited. Start-
up enterprises can use social media for crowdsourcing innovative ideas but a challenge is to
specify the right combination of social media channels and what business information to
disclose to participants of this process (Simula et al., 2013).
In the change and crisis management context, co-creation assumes capability to manage
diversity of interests and business opportunity interpretations of potential co-founders, early
customers and other stakeholders. Many surveys have indicated that in advanced market
economies nine of ten new businesses tend to fail within their first two years (Patil et al.,
2012). Start-ups that are driven by radical innovative ideas often discover that market is not
ready for their innovation or the original business model has to be changed. Participants in
co-creative team have to be prepared for handling such crisis and for learning from their
mistakes by using rapid prototyping experiments in co-operation with early customers, open
innovation, networking and lean start-up opportunities. They need competencies for reflecting
their experience in order to learn from mistakes.
We have developed a self-analysis tool that helps acting and potential entrepreneurs to assess
their priorities when they have to choose between imitative, individually innovative and co-
creative behaviour patterns when discovering or creating business opportunities. Fifteen
questions were developed to cover guiding principles and priorities in these main phases of
the entrepreneurial process: business opportunity identification, business idea development
and implementation. Sources of entrepreneurial ideas, interaction with customers and partners
and risk management in the entrepreneurial activity are reflected in the questionnaire.
Table 1 gives a brief overview of the key issues reflected in the questionnaire statements.
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Table 1. Key point for the self-assessment of entrepreneurship orientations
Key points of alternative statements reflecting
entrepreneurship orientations
Imitative Individual
innovative
Co-creative
I questionnaire issue
Sources of
entrepreneurial ideas
• Ideas proved
elsewhere
• Brands from other
markets
• Do not invent
“bicycle”
• Follow best practices
• Flexibility to make
profits like others
• Own original
ideas
• First in the
marketplace
• Trust intuition
• Change existing
practices
• Flexibility to
develop own
innovation further
• Supporting ideas
of others
• Social impact
• Develop ideas with
others
• Combine solutions
of partners
• Open to
cooperation that
reshapes existing
business
II questionnaire
issue
Interaction with
employees,
customers and
partners.
• Well-tested service -
no complaints
• Clear standards and
rules
• Employee initiative
mainly for quality
assurance
• Schedule for pre-
defined inputs
• Earn average profit
of industry
• Customer ideas
unrealistic
• My vision
motivates to
follow my ideas
• Entrepreneur
defines employee
initiative focus
• Team members
propose means
• Do not give too
much profit to
partners
• Negative
information shared
• Employees as
creative partners
• Initiative of
partners
revolutionizes
• Free flow of ideas
• Financial targets
depend on co-
operation
III questionnaire
issue
Managing
entrepreneurial risks
• No need to own
innovation
• Avoid mistakes of
friends
• Somebody else could
bare development
risks
• Only I know the cost
structure
• Credibility of the
brand that I represent
• Have to own
innovation
personally
• Friends overcome
obstacles
inhibiting my idea
• I have all
development risks
• I and closest
partners know the
cost structure
• Credibility of my
creative
personality
• Ownership of
innovation can be
shared
• Contact network
for broadening my
approach
• Customers should
bare product
development risks
• All potential
contributors have
financial
information
• Credibility of
business network
These issues in table 1 were, however, not separate questionnaire sections, but presented
through alternative statements that had a mixed sequence in order not to disclose the
questionnaire pattern in the process of self-assessment. Respondents have been asked to
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compare three statements under each question and to choose only one statement that is most
suitable for describing his/her preferences in the role of an entrepreneur.
The full statements are sentences that describe entrepreneurial action priorities and principles
such as: “The best way to succeed in business is not to “invent a bicycle”, but to introduce an
existing product that will best serve the market need” that had to be compared with statements
such as, “The best way to succeed in business is to trust your own intuition every time you
have a creative business insight” and “The best way to succeed in business is to develop new
business ideas with other people, although there is never a guarantee of success if you match
people with different visions.”
We have used this self-analysis tool in order to assist acting and potential entrepreneurs to
specify their self-development vision in the field of entrepreneurship and for preparing them
for action learning projects. The questionnaire has been mainly used in the business and
entrepreneurship training environment in order to discuss survey results with participants.
Analysis of data of 1075 respondents from the period 2005-2010 indicated growing popularity
of the co-creative orientation. 40% of respondents gave priority to statements that correspond
to the co-creative entrepreneurship orientation. Individual innovative orientation was
supported by 35% and imitative orientation by 25% in the total business creation and
development process. When comparing choices of statements that correspond to these
orientations we can see that at the stage of business opportunity identification more than 46%
of respondents preferred statements that represent co-creative entrepreneurship orientation,
whereas at the later stage of business development this percentage has diminished to 42% and
at the implementation stage to 34%. At the stage of business opportunity identification, the
individual innovative orientation is preferred by 26% of the respondents (Elenurm, 2012).
When comparing the situation before and during the global financial crisis with trends in
recent years, there was some indication of lower preference towards co-creative orientation
during the crisis but this did not apply to all training groups.
In the action learning and joint project work context this issue has to be discussed in order to
avoid situations, where some participants feel that their creative ideas have been taken over by
others without fair compensation and/or without involving them as partners at later stages of
venture development. We see raising self-awareness about entrepreneurial orientations and
related choices for entrepreneurs and teams co-operating with entrepreneurs as an essential
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part of preparation for action learning processes in order to predict potential problems and
ways to overcome these problems.
3. Action learning and action research for developing co-creation
Classical action learning as developed by Revans (1980) represents a problem-based approach
to learning, where co-learners co-operate as members of small groups whose goal is to
complete a task and achieve learning through the process of problem-solving and reflection.
Action learning methods can enrich the entrepreneurship education (Hytti and O’Gorman,
2004). Academic learning in the field of entrepreneurship is too much focused on analyzing
and revealing causes of problems and less on action-oriented synergies for creating new
entrepreneurial opportunities (Collins et al., 2006). In the action learning process students can
be exposed to ambiguity and learning from their own mistakes and from mistakes of other
stakeholders involved in the entrepreneurial initiative. Understanding knowledge gaps but
also new sources for knowledge acquisition are essential features of action learning through
identifying, testing and critically assessing new business opportunities.
Mainela and Puhakka (2011) suggest that international new venture emergence assumes an
entrepreneurial process that involves four major elements that link networks to international
business opportunities: venture drafting, resourcing, learning & creation and finally
legitimizing the emerging venture. In the entrepreneurial education context these elements can
be reflected in the student enterprise development cycle that starts form identifying a suitable
entrepreneurial opportunity for self-realization and venture drafting that involves positioning
and identity construction.
Davenport (2010) explains the core of personal knowledge management by describing
capabilities essential for creating, sharing and applying knowledge. These capabilities include
searching for knowledge and capturing knowledge in a way that is beneficial to others in the
action learning process. Knowledge sharing in action learning team develops essential
capabilities for co-creation. Social media applications during academic studies prepare
students for the efficient use of personal knowledge management tools after their studies.
Experiential learning as the process of acquiring knowledge through the transformation of
experience in the learning cycle of experiencing, reflecting, thinking (conceptualizing) and
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acting (Kolb and Kolb, 2005) is an educational approach that tries to link the identification of
new entrepreneurial opportunities to exploiting the opportunity that was considered to be the
best when using the knowledge that was available when starting the action and later learning
from after action feedback. We use the experiential learning cycle as a conceptual tool for
explaining different learning paths in the action learning process.
We suggest that entrepreneurship education can apply different modifications of the
experiential learning cycle and students should have opportunity to choose between learning
paths that correspond to their entrepreneurial orientation, pre-knowledge for identifying new
business opportunities and change readiness (Figure 1).
Figure 1. Kolb’s experiential learning cycle - modified by the author of this paper
Concrete experience -
own entrepreneurial project or
contributing to entrepreneurial
opportunities of others
Active experimentation -
testing an entrepreneurial
opportunity by following
lean start-up principles in a
broader ecosystem
Reflective observation -
entrepreneurial
knowledge combination
in teams and in inter-
team co-operation
Forming new concepts -
Business models for using new
business opportunities in future
situations
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Student enterprise development in co-creative teams is a logical action learning path for
students that are ready to commit their time and resources to entrepreneurship and have
already identified their business opportunity. It is however a serious challenge for student
enterprise founders to proceed through the learning & creation and resourcing stages to
legitimizing their own venture project in the business opportunity realization at the
international scale. In order to be prepared to face this challenge, students may need to reflect
experience of other entrepreneurs in the process where they actively interact with these
entrepreneurs in knowledge searching and offering their creative ideas to entrepreneurs that
are at the early stage of business growth and internationalization.
When experienced entrepreneurs are involved in the learning cycle, they already have their
own concrete experience as the departure point for reflecting and conceptualizing in order to
develop new business ideas and models for active experimentation. In order to increase
diversity of ideas for creating new entrepreneurial opportunities, experienced entrepreneurs
end newcomers in the venture creation process can rely on knowledge sharing with each
other. It is especially important when developing innovative ecosystems based on web
applications, where older entrepreneurs can learn from younger potential entrepreneurs. Co-
creative entrepreneurship assumes the presence of skills for linking the personal knowledge
base and additional knowledge resources that are available in face-to-face and online
networks.
4. The role of online learning in action-based entrepreneurship education
Nonaka and Konno (1998) linked more than fifteen years ago the benefits of online
networking primarily to the phase where firms combine ideas that are already externalized.
Contemporary online social networks such as LinkedIn and special networking sites for start-
up entrepreneurs, however, enable some forms of socialization and tacit knowledge sharing
between potential and nascent entrepreneurs that often do not share the same physical space
for face-to-face entrepreneurial networking.
E-learning can introduce students to knowledge management practices and challenges and
especially to the role of tacit and explicit knowledge if e-learning is applied in the blended
learning framework (Osguthorpe and Graham, 2003). The blended learning process combines
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online learning with face to face communication and teamwork in the classroom and in
practical field project settings.
The role of social sources of information about business opportunities, including mentors,
professional forums and informal industry networks has been stressed by Ozgen and Baron
(2007). Ahmed and Qazi (2011) present research evidence that the academic impact of social
networking sites on students’ academic performance is positive. The academic use of
Facebook and other social networks for academic learning is rapidly increasing (J unco 2012).
The digital user generation produces new ways of working and communicating (Tapscott,
2009) but they may also need concept formation in order to see the “big picture” and to
anticipate changes in the local and global business environment. Students that already have
clear motivation and readiness to create their own enterprise can gain concrete experience
straight through active experimentation in their own entrepreneurial project while students
that are not ready for launching their own venture may acquire concrete experience of
contributing to entrepreneurial opportunities of others and learn from their success and
mistakes both through active experimentation and through reflective observation. Such
learning can be supported by online knowledge search and sharing in order to offer
networking experience for linking business knowledge to technological and cross-cultural co-
operation competencies.
Duncan and Barczyk (2013) review results of Facebook-enhanced courses, where students
were assigned a term project and student teams had the option to use Facebook for virtual
meetings, for posting YouTube links, for commenting on each other’s works and for other
knowledge sharing activities related to their project. They pointed out that some students
needed reassurance that their postings were private and would only be viewed by members of
the class. A conclusion of the authors is that the Facebook-enhanced course contributed to
students’ sense of learning by encouraging them to ask more questions, but it enhanced their
connectedness to a lesser extent. Experiential projects play a pivotal role in transformational
learning and present a valuable alternative to long-term internship as such projects promote
team work and collaboration (Kosnik et al. 2013).
Co-operative learning on blended courses, involving both the online component and the face-
to-face project work, is discussed by J ohnson (2013). She points out the need to apply peer
reviews and to allow members to “divorce” themselves from project teams in order to
diminish the problem of free riders.
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We share the view that blended learning in the preferable action learning mode for preparing
learners to act as co-creative entrepreneurs and change agents that discover and create
business opportunities. Using online tools enables co-creation with geographically distant
stakeholders that cannot be involved to the same physical space, at least not on regular basis.
Moodle e-learning tools but also Tricider and other idea generation and assessment tools
available in internet have been used in our action learning projects.
Field projects introduce the business opportunity testing and implementation challenges and
link new concepts to active experimentation and concrete experience in the Kolb’s amended
model (Figure 1). Online learning can involve some types of active experimentation,
especially if the object of experimentation is some mobile application. However, students
have to understand both opportunities and limitations of online tools. In the action learning
process they have to experience the online contribution of cross-border participants in order to
enrich their teamwork. But they need also to understand the role of face-to-face contacts and
site visits in trust creation and in co-creative business development with entrepreneurs.
5. Applying field projects for monitoring international business information
Entrepreneurial education with a focus on new venture creation can be developed by
integrating university entrepreneurship and incubation services (Ollila and Williams-
Middleton, 2011). True to life experience demonstrates the sense of urgency and pressure
created by real-world business situations that involve multiple priorities and stakeholders
(Ollila and Williams-Middleton, 2011).
It may be however a difficult task if not a mission impossible, to create in a business school
student enterprise environment such development situation, where all relevant stakeholders
for a technology-based innovative start-up that has born global potential are involved. Field
projects that involve technology-based entrepreneurs outside the business school may help to
overcome this gap.
Experiential learning paths of learners that have different background and entrepreneurship
experience can be combined in the co-creative entrepreneurship process. Entrepreneurs that
are engaged in efforts to develop their technology-based venture and to access foreign
markets can broaden their knowledge base with the help of international exchange students
that are able to acquire market knowledge and search business contacts from potential
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markets. These students at the same time gain concrete experience of contributing to an
entrepreneurial venture and reflect this experience, including success and mistakes, in their
teamwork. Students can be involved in the active experimentation if they are trusted by the
entrepreneur.
During the period from 2006 to 2013 international student teams of the Estonian Business
School have conducted field projects for 60 Estonian SMEs and 3 Finnish SMEs in order to
support their internationalization efforts. Twenty five of these enterprises were start-ups that
had international scalability and rapid growth potential. Among business sectors represented
in these team projects, most active have been innovative entrepreneurs involved in
information and communication technology, design and tourism start-ups. Electronics,
mechanical engineering, furniture production, health and other service fields have been more
often represented by enterprises that already have some international business experience and
are interested to broaden their international markets and/or to move higher in the value chain.
Action learning processes that are reflected upon in the present paper have been carried out
within the framework of the course International business opportunities in the Baltic Region.
This course has been from 2006 to 2013 conducted 11 times by following the action learning
logic. In each of the courses 36 hours were allocated for classroom activities spread over three
and a half months. Students were asked to create teams to assist SMEs in order to find new
international business opportunities and partners. The project work results assessed by the
SMEs and by the tutor on the basis of the written reports and oral presentations counted for
40% of the final grade. Students had to learn how to search for additional business
information and how to attain a mutual understanding of the realistic scope of their task
within the team and during meetings with the representative of the SME. Enterprises
volunteered their internationalisation project tasks on 1-2 pages after receiving information
about co-operation opportunities. Mailing lists of Estonian Business School alumni, the
Estonian Association of Small Enterprises, Tallinn Science Park Tehnopol, Creative Estonia
and Tallinn City Business Development Department have been used for finding interested
enterprises. SMEs were encouraged in the preliminary task to specify their key problems in
the field of international business development, so student teams could produce useful
information for them. Project requests presented by SMEs at the beginning of the action
learning process did not offer to the student teams finalised tasks with detailed instructions.
Analysis of the briefs received from the enterprises was only the departure point for the action
learning process. Reflections on the part of the students about aligning the understandings of
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their team with those of the representative of the SME about the task served as an important
input for the action research.
The teams that have been created at the Estonian Business School involved students from the
Baltic countries, from southern European countries such as Italy and France, and from
Germany, Netherlands and the Nordic countries. As the rule, not more than two students from
one country could join the same 4-5 member team. Asia has been represented mainly by
Chinese students. Reflection of first two years of action learning projects, 2006-2007, is
presented in (Elenurm, 2008).
Cross-cultural teamwork serves as a tool for preparing students to co-creative international
entrepreneurship. It assumes understanding the perspectives and world views of people with a
different background and knowledge base. Values are the key determinants of a culture
(Hofstede et al., 2010). Creating innovative entrepreneurial opportunities or dismissing
available entrepreneurial opportunities are influenced by values. The diversified composition
of student teams, involving students from different countries, increases the international
gatekeeper potential of the company project team as students can rely on contact networks
and creative ideas that are enabled by their diverse cultural backgrounds. Diversity within
teams can support critical thinking skills and the willingness to appreciate different
perspectives (Day and Glick, 2000). Intercultural teams however, often become dysfunctional
because of miscommunication and conflict (Humes and Reilly, 2008).
In the process of facilitating the student teams, the challenge of cross-cultural aligning of
different teamwork habits emerged, especially between southern European, northern
European and Asian students that assumed different approaches to structuring their tasks and
giving feedback to other team members. Students from Germany tended to focus on balancing
the inputs of all teams members by insisting on agreements that should be based on a clearly
defined project time schedule and were unhappy if these agreements were not followed by the
team members or if the SME representatives postponed meetings referring to their time
pressures. Italian and French students were often eager to discuss the preliminary task and
ideas at some length before deciding on their input for a specific subtask. They preferred to go
to the first meeting with the SME representative without sufficiently studying the information
that was available at the SME website or other online sources. At the same time, Estonian
SME representatives did not welcome the conversation style with such student teams that
used face-to-face meetings to ask questions, where such answers could easily be found from
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their website already before the meeting. Estonian students have seldom tried to take the
leadership role in the team and have been more rarely asked by the team to be the key oral
presenter of the final report than French or Italian students. The real contribution of Estonian
students to intra-team communication and in some cases to communication between the SME
and the student team appeared to be more modest than anticipated by foreign exchange
students at the first stage of the action research.
SME representatives have generally pointed out the positive impact of the international
composition of the student team in their feedback presented in the form of brief written
assessments, and in additional interviews with SME representatives interested in clarifying
their point of view. Some of them however, were eager to see teams that matched their
potential foreign markets even more in terms of nationality and the experience of the students.
Even innovative entrepreneurs, having potential to succeed as born globals, tend to be more
interested in neighbouring Nordic and Baltic markets, whereas majority of exchange students
are from France, Italy, Spain or some other South European countries. In recent years some
exchange students have arrived from South America and from other more distant regions and
a challenge is to match country-specific competencies of these students and
internationalization visions of Estonian SMEs.
Company projects also functioned as an action learning processes for students in the context
of understanding the limitations of management practices in growing entrepreneurial ventures,
including knowledge sharing. Students learned how to search for additional information and
how to attain a mutual understanding of the realistic scope of their task within the team and
during meetings with the representative of the SME.
Students had to meet the enterprise representative and were encouraged to re-negotiate the
preliminary written task if they are able to find better match between knowledge represented
in the team and needs of the entrepreneur. Many students from West European countries did
not have any experience of making appointments with busy entrepreneurs before these
projects. Students learned that SME managers are sometimes slow to answer e-mails and tend
to change their priorities without timely notice. In some enterprises the dissemination of
information to students and the mandate of the student team to conduct meaningful
information exchange with potential business partners were limited by the strict rules
safeguarding the company's business secrets.
17
Using online tools in team projects was especially active in 2013, when joint action learning
teams involved in addition to the Estonian Business School student some students from the
Porvoo unit of the Haaga-Helia Polytechnic in Finland. These team did not have face to face
meeting at the beginning of the action learning process. However, these teams that had
opportunity to devote more time to face-to-face meetings with enterprise representatives
attained better results compared to teams that have mainly used online communication or did
not visit the enterprise at all due to travel costs. The projects have at the same time
demonstrated that students representing Nordic low context cultures are better prepared for
the use of online tools than students representing Southern European more high context
cultures.
International student teams had to analyse the knowledge gaps of their client entrepreneurs
and to present a self-reflection of their teamwork experience. The written peer review
included the assessment of the general contribution of other students and also the specification
of how often each team member participated in knowledge sharing, to what extent he/she was
a source of creative ideas, to what extent he/she defended his/her views in discussions and
expressed positive feelings in communication. The reflection on the teamwork and possible
difficulties in communication with the entrepreneur and his team supported the experiential
learning cycles in order to highlight the real life challenges of business development and
knowledge sharing in entrepreneurial organizations.
Applying international student teams in the role of “gatekeepers” for growing SMEs should
not be seen only as a learning exercise for students. Applying the knowledge of team
members that have diversified international backgrounds can also facilitate the organizational
learning in entrepreneurial start-ups. The ability to set a task for an international team and
implement results that are produced by the student team reflects the readiness of entrepreneurs
to develop co-creative entrepreneurship.
6. Discussion and conclusions for further research
Action learning reflects risks and unpredictable nature of changes in the entrepreneurial
process, enables re-defining problems and learning from overcoming crisis situations in
teams. Students can be engaged to active experimentation in order to use business
opportunities that they have discovered themselves. The focus on innovative and
18
internationally competitive entrepreneurship can however benefit from combining several
learning paths, including field projects for assisting innovative entrepreneurs that apply cross-
cultural teamwork. This learning path helps to learn from experience and challenges of new
entrepreneurs and to use reflective observation in order to be better prepared for identifying
and using student’s entrepreneurial opportunities.
Students that report new information about international business opportunities to
entrepreneurs that already are engaged in the business development process test their critical
thinking and experience the role of change agent. We do not assume that majority of students
will see their career as management consultants but the experience of studying the business
concept, business environment, strengths and weaknesses of an entrepreneur that already has
some practical experience will helps them to understand the importance of external expertize
when they will later develop their own venture. They also experience difficulties to establish
their credibility in communication with entrepreneurs. This experience is useful for their
future chances to succeed as formal or informal change agents.
Relationships and networking in internationalisation studies have for some time been
promoted as tools for overcoming the “resource poverty” of born globals (Mort and
Weerawardena, 2006). Students gain higher capability to discover existing business
opportunities and create innovative and internationally competitive entrepreneurial
opportunities if they are involved in international networking and knowledge sharing. Online
knowledge search will help students to scan, access and use additional information sources.
Applying international student exchange for screening cross-border business opportunities has
demonstrated the value of international student teams especially for enterprises that have
innovative products and services and intention to screen different foreign markets and
possibly export to several countries. Co-creative orientations of both the entrepreneur and
students are needed for creating new entrepreneurial opportunities based on synergy between
different knowledge sources and stakeholders.
Understanding the knowledge sharing potential and challenges in international teamwork is
essential for preparing students for international networking and cross-border project work in
order to identify new business opportunities. The main barrier to applying the creative
synergy of the cross-cultural teams in innovative solutions that can be implemented in a SME
is not limited analytical skills, but rather the lack of the real time cross-cultural
communication competence within the teams.
19
Entrepreneurial-directed approaches encourage students to broaden their perspective but the
challenge of experiential learning is decreasing predictability and control of the teaching
situation (Heinonen and Poikkijoki, 2006). In order to interpret action learning results in the
action research framework, limited control of action learning variables such as pre-knowledge
and motivation of participants but also lower or higher readiness of entrepreneurs to accept
students as business information gatekeepers or even change agents has to be taken into
consideration. In future action learning applications our aim is to introduce more advanced
tools for assessing entrepreneurial orientations that would also address the issue of trust and
mutual co-creation readiness between students as potential entrepreneurs and entrepreneurs
already engaged in start-up activities.
Experiential learning cycles that apply to the field projects of student teams could have more
impact on developing personal knowledge management and innovative learning if such
project work is not limited to a course offered by one academic department. A capstone
course that involves universities from several countries in offering innovative project work
and joint mentoring of students in field projects will be a way to enforce the international
scope of knowledge sharing. Partner universities that offer business, technological and art
education would bring interdisciplinary synergy to cross-cultural teamwork and increase
probability of finding innovative ideas in the action learning process.
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doc_402115281.pdf
On this particular paper regarding action learning for developing co creation and change management skills entrepreneurship.
1
Action learning for developing co-creation and change management skills
Tiit Elenurm
Estonian Business School
Entrepreneurship Department
A. Lauteri 3, 10114 Tallinn, Estonia
[email protected]
Abstract
The paper uses educational learning by doing prism for linking the research on co-creative
entrepreneurship to the challenge of change and crisis management in business start-up teams
and in innovation ecosystems. Inter-organizational interventions and enabling young people
to act as change agents in networks and temporary teams is a tool for facilitating creativity
and societal dynamics. The role of action learning and action research in enabling new
personal knowledge management, business networking and co-creative entrepreneurship
opportunities for students that follow different paths of self-development is explained. Field
projects focused on identifying and implementing student’s own business opportunity vision
and field projects focused on assisting start-up entrepreneurs in developing and
internationalizing their business activities have different implications for change Business
opportunities in virtual networks can broaden the mental space and networking capabilities
for cross-border co-creation.
Key words: co-creation, crisis and change management, business opportunities, networking,
action learning.
1. Introduction
The global financial crisis has intensified discourse about the need to rethink changes driven
by short-term profitability objectives and related responsibility in organizations that as large
banks are for stakeholders and society too large to fail. External parties assume that
management in such large organizations should have foreseen the crisis and applied the ethics
2
of care based on mutual trust and cooperation (Linsley and Slack, 2013). Strong
organizational culture and decades-long commitment to leadership development is presented
as a crucial tool for diminishing the impact of economic crisis on business organizations but
also for rapid recovery of health care organizations after a natural disaster (J oyner et al.,
2013). Influence of different national cultures and institutions on employee reactions of
organizational changes have been studied in established organizations from large and small
transition economies (Alas et al., 2012). Success of strategic organizational changes in large
organizations depends on vertical integration between organizational goals and relevant
human resource management strategies (Rees and J ohari, 2010).
A challenge for large organizations, including higher education, in rapidly changing
environment is resilience, ability of the system to absorb disturbances and maintain stability
(Lane et al., 2013). Business education should prepare students for career in large established
organizations assuming that during first years of their employment majority of new
employees have to absorb many changes but seldom manage to establish themselves as
change leaders for the whole organization. Entrepreneurship education has however different
change focus. The departure point for a new entrepreneur is not changing an existing
organization but creating a new one in order to use a business opportunity. In a start-up
process entrepreneurs usually do not start from recruiting a human resource manager. They
are not restrained by values of an established organizational culture but have crucial role in
shaping a new one. Start-up entrepreneurs that have born global ambitions face the challenge
of blending at quite early business development stages cultural values and communication
patterns representing different national cultures. They have to start building credibility and
trust in their relations with business partners. The lean start-up change management logic is
crucially different from the classical foresight and contingency planning based crisis
avoidance logic of large corporations.
Ries (2011) advocates the view that in the situation of extreme uncertainty it is better to
experiment with a minimum viable product in order to reveal the real needs of customers
instead of fine-tuning the product before the first attempt of commercialization. It can be
interpreted as validated learning through a number of small crises instead of following a long-
term innovation strategy that may lead to a dead end. When applying the lean start-up logic
combined with the “wide lens” for mapping the innovation ecosystem (Adner, 2012) the
discourse about change management inside boundaries of an organization has to be re-focused
on creating a new business organization as an element in a changing network of partners for
3
co-creating innovation. Re-defining the change arena leads us to the objective of the paper:
to develop learning paths and learning methods that enhance innovative and internationally
competitive entrepreneurship.
In this paper the central research question is: What are the change and crisis management
implications of action learning practices that enable different modes of individual and co-
creative entrepreneurial activities?
2. Changing business opportunities and entrepreneurial orientations
Developing business opportunity identification skills has crucial role in the entrepreneurship
education (De Tinne and Chandler, 2004; Heinonen and Poikkijoki, 2006). Shane and
Venkataraman (2000) defined entrepreneurial opportunity as a situation, where new goods or
services could be introduced for greater revenue than their cost of production. Entrepreneurial
opportunity “windows” open and close as the result of changing markets and emerging
technologies. Entrepreneurial opportunity recognition can initiate learning and change
processes on the level of an individual but also on the level of groups or organizations.
Lindsay and Craig (2002) specify three stages of opportunity identification: opportunity
search, opportunity recognition and opportunity evaluation. Entrepreneurial opportunities
change depending on the development level of economy but also during economic cycles.
Crisis hurts growth in many industries but can open new windows of opportunity for new
entrepreneurs that are able to save costs of their business partners.
McMullen et al. (2007) and Plummer et al. (2007) explain that an entrepreneurial opportunity
can be either an objective construct visible to an entrepreneur or a construct created by a
knowledgeable entrepreneur. Discovery and creation views of entrepreneurial opportunity
have been contrasted by Alvarez and Barney (2007). Discovery view assumes that
entrepreneurs systematically scan the environment for competitive imperfections (Edelman
and Yli-Renko, 2010). Opportunity creation assumes creative “out of the box” thinking and
may lead to transforming existing markets and to creating a new innovation ecosystem. Adner
(2012) has studied several examples in consumer electronics, telecommunications and
introducing electric cars, where an opportunity to commercialize a radical innovation has not
been successfully used because of missing links in the adaptation chain between innovator
and end customers and inability to co-innovate. Change leaders have tried to do the right thing
4
but not in the right time and not in co-operation with the right business partners for creating or
reconfiguring the innovation ecosystem. Participants and stakeholders in innovation
ecosystems have to co-operate in developing the ecosystem even if they are competitors.
Entrepreneurial motivations drive opportunity recognition and it is important to understand
how they vary across different types of entrepreneurs (Carsrud and Brännbäck, 2011) and are
reflected in individual or team-based business development priorities. Co-creation can support
synergy at different stages of the entrepreneurial initiative, starting from discovering or
creating business opportunities to implementing the business model and pooling resources for
daily operations and funding growth in the new venture. Co-creation activities across the
value chain can involve various touch-points and domains (Ramaswamy, 2009) and depends
on the resource bases of stakeholders. Stakeholder engagement skills are the very basis of
enterprise value creation when applying co-creation thinking (Ramaswamy and Ozcan, 2013).
In order to succeed in creating new business opportunities that depend on broader innovation
ecosystem, young entrepreneurs have to learn how to align their innovative business ideas and
ideas of business partners in order to create a new value chain.
Entrepreneurship researchers have developed the entrepreneurial orientation constructs that
integrate five dimensions: innovation, proactiveness, risk-taking, autonomy and competitive
aggressiveness (Lumpkin and Dess, 1996; 2001). Entrepreneurial orientation is reflected in
strategic choices and in managing the process of exploiting or rejecting business
opportunities. The construct of a single entrepreneurial orientation can be further developed
by differentiating several entrepreneurial orientations: imitative entrepreneurship, individual
innovative entrepreneurship and co-creative entrepreneurship (Elenurm et al., 2007).
Imitation in a non-saturated market can support market pro-activeness and the competitive
aggressiveness of a fast mover in recognising business opportunities that can be exploited by
transferring business models from more advanced markets without “reinventing the wheel”.
Such business behaviour does not assume core competence for delivering unique value based
on entrepreneur’s own product or process innovation development efforts. Successful
imitation, however, assumes not only an understanding of product life cycles, but also of
economic boom and crisis cycles in order to follow the right business ideas at the right time
and to sell the business before the business opportunity becomes unprofitable and exhausted.
Imitative orientation may sometimes mean illegal copying of products, but alternatively it can
be applied in the legal framework of representing some well-known trade mark, importing
5
goods or taking a franchise. As the imitator is not offering any unique product or service, the
long-term success of the imitative orientation assumes the core competence for retaining the
cost advantage or changing the object of imitation when the competitive situation becomes
unfavourable. The imitative orientation is assumed to be successful in a business environment
where empty market niches can be filled by introducing business ideas that have proved their
effectiveness and efficiency in similar conditions in other markets. This should not be seen
simply as copying the ideas of other entrepreneurs, but also as a readiness to monitor and
introduce existing best practices efficiently without losing time inventing new “bicycles” if
the old ones can meet the needs of customers in the home market of the entrepreneur.
The individual innovative orientation is a good basis for entrepreneurial ventures in a business
environment, where creative differentiation is the main prerequisite for creating and retaining
local or international competitive advantage. This orientation will work for business growth if
core competence of the entrepreneur is sufficient to manage the change starting from the
creative idea until commercialization of the innovation. Entrepreneur has to be able to protect
his/her innovative solution and to individually control human resources and investments that
are needed in order to implement an innovative product or technology. Innovative
entrepreneurs have to understand if their new business idea corresponds to the business
opportunity. An important feature of innovator’s core competence is the ability to assess if
markets are ready for commercializing their innovative solutions. Innovative orientation can
be supported by the core competence in the field of new product and/or technology
development or by creative ways to re-define business boundaries and to combine existing
business ideas in a new way. This orientation will produce business growth if the creative
entrepreneur is able to protect his/her innovative intellectual capital and to individually
control human resources and investments that are needed in order to implement an innovative
product or technology. It is not guaranteed that long-term technology-driven innovative
product development can be aligned with short-term market proactiveness.
The co-creative orientation is a reflection of the emerging network economy of the 21st
century. Co-creative orientation assumes a readiness for networking and knowledge sharing
and a mutual trust in a business environment where, as in a brainstorming session, it is not
always possible to fix and protect authorship of the idea. Co-creative entrepreneurial
orientation supports open innovation for developing and combining new business ideas. Open
innovation assumes the use of purposive inflows and outflows of knowledge to accelerate
internal innovation and simultaneously to expand markets for the external use of innovation
6
(Chesbrough et al., 2006). Co-creative entrepreneurship may also be implemented by
involving a large number of business owners in the business start-up process and/or by using
crowdfunding (Kuppuswamy and Bayus, 2013) for financing entrepreneurial initiatives.
Communities of practice (Wenger et al., 2002) can be seen as knowledge sharing and creation
tools that may lead to new interpretations of business opportunities for co-creation. Co-
creative entrepreneurial initiatives can emerge in formal or informal teams created in large
organizations but also in cross-border communities of practice that combine ideas from
different organizations and countries.
Individual innovators have to focus on protecting their innovative ideas, and as a result, their
opportunities to rely on open innovation and networking practices may be more limited. Start-
up enterprises can use social media for crowdsourcing innovative ideas but a challenge is to
specify the right combination of social media channels and what business information to
disclose to participants of this process (Simula et al., 2013).
In the change and crisis management context, co-creation assumes capability to manage
diversity of interests and business opportunity interpretations of potential co-founders, early
customers and other stakeholders. Many surveys have indicated that in advanced market
economies nine of ten new businesses tend to fail within their first two years (Patil et al.,
2012). Start-ups that are driven by radical innovative ideas often discover that market is not
ready for their innovation or the original business model has to be changed. Participants in
co-creative team have to be prepared for handling such crisis and for learning from their
mistakes by using rapid prototyping experiments in co-operation with early customers, open
innovation, networking and lean start-up opportunities. They need competencies for reflecting
their experience in order to learn from mistakes.
We have developed a self-analysis tool that helps acting and potential entrepreneurs to assess
their priorities when they have to choose between imitative, individually innovative and co-
creative behaviour patterns when discovering or creating business opportunities. Fifteen
questions were developed to cover guiding principles and priorities in these main phases of
the entrepreneurial process: business opportunity identification, business idea development
and implementation. Sources of entrepreneurial ideas, interaction with customers and partners
and risk management in the entrepreneurial activity are reflected in the questionnaire.
Table 1 gives a brief overview of the key issues reflected in the questionnaire statements.
7
Table 1. Key point for the self-assessment of entrepreneurship orientations
Key points of alternative statements reflecting
entrepreneurship orientations
Imitative Individual
innovative
Co-creative
I questionnaire issue
Sources of
entrepreneurial ideas
• Ideas proved
elsewhere
• Brands from other
markets
• Do not invent
“bicycle”
• Follow best practices
• Flexibility to make
profits like others
• Own original
ideas
• First in the
marketplace
• Trust intuition
• Change existing
practices
• Flexibility to
develop own
innovation further
• Supporting ideas
of others
• Social impact
• Develop ideas with
others
• Combine solutions
of partners
• Open to
cooperation that
reshapes existing
business
II questionnaire
issue
Interaction with
employees,
customers and
partners.
• Well-tested service -
no complaints
• Clear standards and
rules
• Employee initiative
mainly for quality
assurance
• Schedule for pre-
defined inputs
• Earn average profit
of industry
• Customer ideas
unrealistic
• My vision
motivates to
follow my ideas
• Entrepreneur
defines employee
initiative focus
• Team members
propose means
• Do not give too
much profit to
partners
• Negative
information shared
• Employees as
creative partners
• Initiative of
partners
revolutionizes
• Free flow of ideas
• Financial targets
depend on co-
operation
III questionnaire
issue
Managing
entrepreneurial risks
• No need to own
innovation
• Avoid mistakes of
friends
• Somebody else could
bare development
risks
• Only I know the cost
structure
• Credibility of the
brand that I represent
• Have to own
innovation
personally
• Friends overcome
obstacles
inhibiting my idea
• I have all
development risks
• I and closest
partners know the
cost structure
• Credibility of my
creative
personality
• Ownership of
innovation can be
shared
• Contact network
for broadening my
approach
• Customers should
bare product
development risks
• All potential
contributors have
financial
information
• Credibility of
business network
These issues in table 1 were, however, not separate questionnaire sections, but presented
through alternative statements that had a mixed sequence in order not to disclose the
questionnaire pattern in the process of self-assessment. Respondents have been asked to
8
compare three statements under each question and to choose only one statement that is most
suitable for describing his/her preferences in the role of an entrepreneur.
The full statements are sentences that describe entrepreneurial action priorities and principles
such as: “The best way to succeed in business is not to “invent a bicycle”, but to introduce an
existing product that will best serve the market need” that had to be compared with statements
such as, “The best way to succeed in business is to trust your own intuition every time you
have a creative business insight” and “The best way to succeed in business is to develop new
business ideas with other people, although there is never a guarantee of success if you match
people with different visions.”
We have used this self-analysis tool in order to assist acting and potential entrepreneurs to
specify their self-development vision in the field of entrepreneurship and for preparing them
for action learning projects. The questionnaire has been mainly used in the business and
entrepreneurship training environment in order to discuss survey results with participants.
Analysis of data of 1075 respondents from the period 2005-2010 indicated growing popularity
of the co-creative orientation. 40% of respondents gave priority to statements that correspond
to the co-creative entrepreneurship orientation. Individual innovative orientation was
supported by 35% and imitative orientation by 25% in the total business creation and
development process. When comparing choices of statements that correspond to these
orientations we can see that at the stage of business opportunity identification more than 46%
of respondents preferred statements that represent co-creative entrepreneurship orientation,
whereas at the later stage of business development this percentage has diminished to 42% and
at the implementation stage to 34%. At the stage of business opportunity identification, the
individual innovative orientation is preferred by 26% of the respondents (Elenurm, 2012).
When comparing the situation before and during the global financial crisis with trends in
recent years, there was some indication of lower preference towards co-creative orientation
during the crisis but this did not apply to all training groups.
In the action learning and joint project work context this issue has to be discussed in order to
avoid situations, where some participants feel that their creative ideas have been taken over by
others without fair compensation and/or without involving them as partners at later stages of
venture development. We see raising self-awareness about entrepreneurial orientations and
related choices for entrepreneurs and teams co-operating with entrepreneurs as an essential
9
part of preparation for action learning processes in order to predict potential problems and
ways to overcome these problems.
3. Action learning and action research for developing co-creation
Classical action learning as developed by Revans (1980) represents a problem-based approach
to learning, where co-learners co-operate as members of small groups whose goal is to
complete a task and achieve learning through the process of problem-solving and reflection.
Action learning methods can enrich the entrepreneurship education (Hytti and O’Gorman,
2004). Academic learning in the field of entrepreneurship is too much focused on analyzing
and revealing causes of problems and less on action-oriented synergies for creating new
entrepreneurial opportunities (Collins et al., 2006). In the action learning process students can
be exposed to ambiguity and learning from their own mistakes and from mistakes of other
stakeholders involved in the entrepreneurial initiative. Understanding knowledge gaps but
also new sources for knowledge acquisition are essential features of action learning through
identifying, testing and critically assessing new business opportunities.
Mainela and Puhakka (2011) suggest that international new venture emergence assumes an
entrepreneurial process that involves four major elements that link networks to international
business opportunities: venture drafting, resourcing, learning & creation and finally
legitimizing the emerging venture. In the entrepreneurial education context these elements can
be reflected in the student enterprise development cycle that starts form identifying a suitable
entrepreneurial opportunity for self-realization and venture drafting that involves positioning
and identity construction.
Davenport (2010) explains the core of personal knowledge management by describing
capabilities essential for creating, sharing and applying knowledge. These capabilities include
searching for knowledge and capturing knowledge in a way that is beneficial to others in the
action learning process. Knowledge sharing in action learning team develops essential
capabilities for co-creation. Social media applications during academic studies prepare
students for the efficient use of personal knowledge management tools after their studies.
Experiential learning as the process of acquiring knowledge through the transformation of
experience in the learning cycle of experiencing, reflecting, thinking (conceptualizing) and
10
acting (Kolb and Kolb, 2005) is an educational approach that tries to link the identification of
new entrepreneurial opportunities to exploiting the opportunity that was considered to be the
best when using the knowledge that was available when starting the action and later learning
from after action feedback. We use the experiential learning cycle as a conceptual tool for
explaining different learning paths in the action learning process.
We suggest that entrepreneurship education can apply different modifications of the
experiential learning cycle and students should have opportunity to choose between learning
paths that correspond to their entrepreneurial orientation, pre-knowledge for identifying new
business opportunities and change readiness (Figure 1).
Figure 1. Kolb’s experiential learning cycle - modified by the author of this paper
Concrete experience -
own entrepreneurial project or
contributing to entrepreneurial
opportunities of others
Active experimentation -
testing an entrepreneurial
opportunity by following
lean start-up principles in a
broader ecosystem
Reflective observation -
entrepreneurial
knowledge combination
in teams and in inter-
team co-operation
Forming new concepts -
Business models for using new
business opportunities in future
situations
11
Student enterprise development in co-creative teams is a logical action learning path for
students that are ready to commit their time and resources to entrepreneurship and have
already identified their business opportunity. It is however a serious challenge for student
enterprise founders to proceed through the learning & creation and resourcing stages to
legitimizing their own venture project in the business opportunity realization at the
international scale. In order to be prepared to face this challenge, students may need to reflect
experience of other entrepreneurs in the process where they actively interact with these
entrepreneurs in knowledge searching and offering their creative ideas to entrepreneurs that
are at the early stage of business growth and internationalization.
When experienced entrepreneurs are involved in the learning cycle, they already have their
own concrete experience as the departure point for reflecting and conceptualizing in order to
develop new business ideas and models for active experimentation. In order to increase
diversity of ideas for creating new entrepreneurial opportunities, experienced entrepreneurs
end newcomers in the venture creation process can rely on knowledge sharing with each
other. It is especially important when developing innovative ecosystems based on web
applications, where older entrepreneurs can learn from younger potential entrepreneurs. Co-
creative entrepreneurship assumes the presence of skills for linking the personal knowledge
base and additional knowledge resources that are available in face-to-face and online
networks.
4. The role of online learning in action-based entrepreneurship education
Nonaka and Konno (1998) linked more than fifteen years ago the benefits of online
networking primarily to the phase where firms combine ideas that are already externalized.
Contemporary online social networks such as LinkedIn and special networking sites for start-
up entrepreneurs, however, enable some forms of socialization and tacit knowledge sharing
between potential and nascent entrepreneurs that often do not share the same physical space
for face-to-face entrepreneurial networking.
E-learning can introduce students to knowledge management practices and challenges and
especially to the role of tacit and explicit knowledge if e-learning is applied in the blended
learning framework (Osguthorpe and Graham, 2003). The blended learning process combines
12
online learning with face to face communication and teamwork in the classroom and in
practical field project settings.
The role of social sources of information about business opportunities, including mentors,
professional forums and informal industry networks has been stressed by Ozgen and Baron
(2007). Ahmed and Qazi (2011) present research evidence that the academic impact of social
networking sites on students’ academic performance is positive. The academic use of
Facebook and other social networks for academic learning is rapidly increasing (J unco 2012).
The digital user generation produces new ways of working and communicating (Tapscott,
2009) but they may also need concept formation in order to see the “big picture” and to
anticipate changes in the local and global business environment. Students that already have
clear motivation and readiness to create their own enterprise can gain concrete experience
straight through active experimentation in their own entrepreneurial project while students
that are not ready for launching their own venture may acquire concrete experience of
contributing to entrepreneurial opportunities of others and learn from their success and
mistakes both through active experimentation and through reflective observation. Such
learning can be supported by online knowledge search and sharing in order to offer
networking experience for linking business knowledge to technological and cross-cultural co-
operation competencies.
Duncan and Barczyk (2013) review results of Facebook-enhanced courses, where students
were assigned a term project and student teams had the option to use Facebook for virtual
meetings, for posting YouTube links, for commenting on each other’s works and for other
knowledge sharing activities related to their project. They pointed out that some students
needed reassurance that their postings were private and would only be viewed by members of
the class. A conclusion of the authors is that the Facebook-enhanced course contributed to
students’ sense of learning by encouraging them to ask more questions, but it enhanced their
connectedness to a lesser extent. Experiential projects play a pivotal role in transformational
learning and present a valuable alternative to long-term internship as such projects promote
team work and collaboration (Kosnik et al. 2013).
Co-operative learning on blended courses, involving both the online component and the face-
to-face project work, is discussed by J ohnson (2013). She points out the need to apply peer
reviews and to allow members to “divorce” themselves from project teams in order to
diminish the problem of free riders.
13
We share the view that blended learning in the preferable action learning mode for preparing
learners to act as co-creative entrepreneurs and change agents that discover and create
business opportunities. Using online tools enables co-creation with geographically distant
stakeholders that cannot be involved to the same physical space, at least not on regular basis.
Moodle e-learning tools but also Tricider and other idea generation and assessment tools
available in internet have been used in our action learning projects.
Field projects introduce the business opportunity testing and implementation challenges and
link new concepts to active experimentation and concrete experience in the Kolb’s amended
model (Figure 1). Online learning can involve some types of active experimentation,
especially if the object of experimentation is some mobile application. However, students
have to understand both opportunities and limitations of online tools. In the action learning
process they have to experience the online contribution of cross-border participants in order to
enrich their teamwork. But they need also to understand the role of face-to-face contacts and
site visits in trust creation and in co-creative business development with entrepreneurs.
5. Applying field projects for monitoring international business information
Entrepreneurial education with a focus on new venture creation can be developed by
integrating university entrepreneurship and incubation services (Ollila and Williams-
Middleton, 2011). True to life experience demonstrates the sense of urgency and pressure
created by real-world business situations that involve multiple priorities and stakeholders
(Ollila and Williams-Middleton, 2011).
It may be however a difficult task if not a mission impossible, to create in a business school
student enterprise environment such development situation, where all relevant stakeholders
for a technology-based innovative start-up that has born global potential are involved. Field
projects that involve technology-based entrepreneurs outside the business school may help to
overcome this gap.
Experiential learning paths of learners that have different background and entrepreneurship
experience can be combined in the co-creative entrepreneurship process. Entrepreneurs that
are engaged in efforts to develop their technology-based venture and to access foreign
markets can broaden their knowledge base with the help of international exchange students
that are able to acquire market knowledge and search business contacts from potential
14
markets. These students at the same time gain concrete experience of contributing to an
entrepreneurial venture and reflect this experience, including success and mistakes, in their
teamwork. Students can be involved in the active experimentation if they are trusted by the
entrepreneur.
During the period from 2006 to 2013 international student teams of the Estonian Business
School have conducted field projects for 60 Estonian SMEs and 3 Finnish SMEs in order to
support their internationalization efforts. Twenty five of these enterprises were start-ups that
had international scalability and rapid growth potential. Among business sectors represented
in these team projects, most active have been innovative entrepreneurs involved in
information and communication technology, design and tourism start-ups. Electronics,
mechanical engineering, furniture production, health and other service fields have been more
often represented by enterprises that already have some international business experience and
are interested to broaden their international markets and/or to move higher in the value chain.
Action learning processes that are reflected upon in the present paper have been carried out
within the framework of the course International business opportunities in the Baltic Region.
This course has been from 2006 to 2013 conducted 11 times by following the action learning
logic. In each of the courses 36 hours were allocated for classroom activities spread over three
and a half months. Students were asked to create teams to assist SMEs in order to find new
international business opportunities and partners. The project work results assessed by the
SMEs and by the tutor on the basis of the written reports and oral presentations counted for
40% of the final grade. Students had to learn how to search for additional business
information and how to attain a mutual understanding of the realistic scope of their task
within the team and during meetings with the representative of the SME. Enterprises
volunteered their internationalisation project tasks on 1-2 pages after receiving information
about co-operation opportunities. Mailing lists of Estonian Business School alumni, the
Estonian Association of Small Enterprises, Tallinn Science Park Tehnopol, Creative Estonia
and Tallinn City Business Development Department have been used for finding interested
enterprises. SMEs were encouraged in the preliminary task to specify their key problems in
the field of international business development, so student teams could produce useful
information for them. Project requests presented by SMEs at the beginning of the action
learning process did not offer to the student teams finalised tasks with detailed instructions.
Analysis of the briefs received from the enterprises was only the departure point for the action
learning process. Reflections on the part of the students about aligning the understandings of
15
their team with those of the representative of the SME about the task served as an important
input for the action research.
The teams that have been created at the Estonian Business School involved students from the
Baltic countries, from southern European countries such as Italy and France, and from
Germany, Netherlands and the Nordic countries. As the rule, not more than two students from
one country could join the same 4-5 member team. Asia has been represented mainly by
Chinese students. Reflection of first two years of action learning projects, 2006-2007, is
presented in (Elenurm, 2008).
Cross-cultural teamwork serves as a tool for preparing students to co-creative international
entrepreneurship. It assumes understanding the perspectives and world views of people with a
different background and knowledge base. Values are the key determinants of a culture
(Hofstede et al., 2010). Creating innovative entrepreneurial opportunities or dismissing
available entrepreneurial opportunities are influenced by values. The diversified composition
of student teams, involving students from different countries, increases the international
gatekeeper potential of the company project team as students can rely on contact networks
and creative ideas that are enabled by their diverse cultural backgrounds. Diversity within
teams can support critical thinking skills and the willingness to appreciate different
perspectives (Day and Glick, 2000). Intercultural teams however, often become dysfunctional
because of miscommunication and conflict (Humes and Reilly, 2008).
In the process of facilitating the student teams, the challenge of cross-cultural aligning of
different teamwork habits emerged, especially between southern European, northern
European and Asian students that assumed different approaches to structuring their tasks and
giving feedback to other team members. Students from Germany tended to focus on balancing
the inputs of all teams members by insisting on agreements that should be based on a clearly
defined project time schedule and were unhappy if these agreements were not followed by the
team members or if the SME representatives postponed meetings referring to their time
pressures. Italian and French students were often eager to discuss the preliminary task and
ideas at some length before deciding on their input for a specific subtask. They preferred to go
to the first meeting with the SME representative without sufficiently studying the information
that was available at the SME website or other online sources. At the same time, Estonian
SME representatives did not welcome the conversation style with such student teams that
used face-to-face meetings to ask questions, where such answers could easily be found from
16
their website already before the meeting. Estonian students have seldom tried to take the
leadership role in the team and have been more rarely asked by the team to be the key oral
presenter of the final report than French or Italian students. The real contribution of Estonian
students to intra-team communication and in some cases to communication between the SME
and the student team appeared to be more modest than anticipated by foreign exchange
students at the first stage of the action research.
SME representatives have generally pointed out the positive impact of the international
composition of the student team in their feedback presented in the form of brief written
assessments, and in additional interviews with SME representatives interested in clarifying
their point of view. Some of them however, were eager to see teams that matched their
potential foreign markets even more in terms of nationality and the experience of the students.
Even innovative entrepreneurs, having potential to succeed as born globals, tend to be more
interested in neighbouring Nordic and Baltic markets, whereas majority of exchange students
are from France, Italy, Spain or some other South European countries. In recent years some
exchange students have arrived from South America and from other more distant regions and
a challenge is to match country-specific competencies of these students and
internationalization visions of Estonian SMEs.
Company projects also functioned as an action learning processes for students in the context
of understanding the limitations of management practices in growing entrepreneurial ventures,
including knowledge sharing. Students learned how to search for additional information and
how to attain a mutual understanding of the realistic scope of their task within the team and
during meetings with the representative of the SME.
Students had to meet the enterprise representative and were encouraged to re-negotiate the
preliminary written task if they are able to find better match between knowledge represented
in the team and needs of the entrepreneur. Many students from West European countries did
not have any experience of making appointments with busy entrepreneurs before these
projects. Students learned that SME managers are sometimes slow to answer e-mails and tend
to change their priorities without timely notice. In some enterprises the dissemination of
information to students and the mandate of the student team to conduct meaningful
information exchange with potential business partners were limited by the strict rules
safeguarding the company's business secrets.
17
Using online tools in team projects was especially active in 2013, when joint action learning
teams involved in addition to the Estonian Business School student some students from the
Porvoo unit of the Haaga-Helia Polytechnic in Finland. These team did not have face to face
meeting at the beginning of the action learning process. However, these teams that had
opportunity to devote more time to face-to-face meetings with enterprise representatives
attained better results compared to teams that have mainly used online communication or did
not visit the enterprise at all due to travel costs. The projects have at the same time
demonstrated that students representing Nordic low context cultures are better prepared for
the use of online tools than students representing Southern European more high context
cultures.
International student teams had to analyse the knowledge gaps of their client entrepreneurs
and to present a self-reflection of their teamwork experience. The written peer review
included the assessment of the general contribution of other students and also the specification
of how often each team member participated in knowledge sharing, to what extent he/she was
a source of creative ideas, to what extent he/she defended his/her views in discussions and
expressed positive feelings in communication. The reflection on the teamwork and possible
difficulties in communication with the entrepreneur and his team supported the experiential
learning cycles in order to highlight the real life challenges of business development and
knowledge sharing in entrepreneurial organizations.
Applying international student teams in the role of “gatekeepers” for growing SMEs should
not be seen only as a learning exercise for students. Applying the knowledge of team
members that have diversified international backgrounds can also facilitate the organizational
learning in entrepreneurial start-ups. The ability to set a task for an international team and
implement results that are produced by the student team reflects the readiness of entrepreneurs
to develop co-creative entrepreneurship.
6. Discussion and conclusions for further research
Action learning reflects risks and unpredictable nature of changes in the entrepreneurial
process, enables re-defining problems and learning from overcoming crisis situations in
teams. Students can be engaged to active experimentation in order to use business
opportunities that they have discovered themselves. The focus on innovative and
18
internationally competitive entrepreneurship can however benefit from combining several
learning paths, including field projects for assisting innovative entrepreneurs that apply cross-
cultural teamwork. This learning path helps to learn from experience and challenges of new
entrepreneurs and to use reflective observation in order to be better prepared for identifying
and using student’s entrepreneurial opportunities.
Students that report new information about international business opportunities to
entrepreneurs that already are engaged in the business development process test their critical
thinking and experience the role of change agent. We do not assume that majority of students
will see their career as management consultants but the experience of studying the business
concept, business environment, strengths and weaknesses of an entrepreneur that already has
some practical experience will helps them to understand the importance of external expertize
when they will later develop their own venture. They also experience difficulties to establish
their credibility in communication with entrepreneurs. This experience is useful for their
future chances to succeed as formal or informal change agents.
Relationships and networking in internationalisation studies have for some time been
promoted as tools for overcoming the “resource poverty” of born globals (Mort and
Weerawardena, 2006). Students gain higher capability to discover existing business
opportunities and create innovative and internationally competitive entrepreneurial
opportunities if they are involved in international networking and knowledge sharing. Online
knowledge search will help students to scan, access and use additional information sources.
Applying international student exchange for screening cross-border business opportunities has
demonstrated the value of international student teams especially for enterprises that have
innovative products and services and intention to screen different foreign markets and
possibly export to several countries. Co-creative orientations of both the entrepreneur and
students are needed for creating new entrepreneurial opportunities based on synergy between
different knowledge sources and stakeholders.
Understanding the knowledge sharing potential and challenges in international teamwork is
essential for preparing students for international networking and cross-border project work in
order to identify new business opportunities. The main barrier to applying the creative
synergy of the cross-cultural teams in innovative solutions that can be implemented in a SME
is not limited analytical skills, but rather the lack of the real time cross-cultural
communication competence within the teams.
19
Entrepreneurial-directed approaches encourage students to broaden their perspective but the
challenge of experiential learning is decreasing predictability and control of the teaching
situation (Heinonen and Poikkijoki, 2006). In order to interpret action learning results in the
action research framework, limited control of action learning variables such as pre-knowledge
and motivation of participants but also lower or higher readiness of entrepreneurs to accept
students as business information gatekeepers or even change agents has to be taken into
consideration. In future action learning applications our aim is to introduce more advanced
tools for assessing entrepreneurial orientations that would also address the issue of trust and
mutual co-creation readiness between students as potential entrepreneurs and entrepreneurs
already engaged in start-up activities.
Experiential learning cycles that apply to the field projects of student teams could have more
impact on developing personal knowledge management and innovative learning if such
project work is not limited to a course offered by one academic department. A capstone
course that involves universities from several countries in offering innovative project work
and joint mentoring of students in field projects will be a way to enforce the international
scope of knowledge sharing. Partner universities that offer business, technological and art
education would bring interdisciplinary synergy to cross-cultural teamwork and increase
probability of finding innovative ideas in the action learning process.
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