Experiential Learning as a source of entrepreneurial learning

Evgeni Peev Terziev Management & Entrepreneurship 33214883 11.11.2015 The literature leads us to believe that most entrepreneurial learning is of an experiential nature (Corbett The literature leads us to believe that most entrepreneurial learning is of an experiential nature (Corbett 2005; Politis, 2005). Describe how the main mechanisms of experiential learning interact to produce outcomes that are useful and relevant to entrepreneurs. During the past half-decade, the topic of entrepreneurial learning has been focused on how entrepreneurs consistently undertake learning under experiential frameworks (Politis, Cope, Corbett). This paper will delve into how entrepreneurs learn from their past experiences to produce resources fruitful to both the personal and venture development. Effective entrepreneurs are bold, pro-active problem solvers that “learning-by-doing” (Deakins and Freel, 1998; Young and Sexton, 1997, Cope and Watts, 2000) whereby they constantly strive to achieve a desired state. In his paper Cope (2003, p.430) states “There is a widely endorsed view within the literature on entrepreneurial learning that entrepreneurs are action orientated and much of their learning, therefore, is experientially based”. Minniti and Bygrave (2001) in relation quote “entrepreneurship is a process of learning and a theory of entrepreneurship requires a theory of learning” (p. 7). Consequently, we are now faced with the question of dynamics that best describe the mechanisms undergone by entrepreneurs throughout the various phases they encounter during business development. This essay will comprise of five specific sections relating to the research question. A description of literature around experiential learning, specifically Politis’ conceptual framework of entrepreneurial learning within experiential contexts, will be presented. This will open our understanding to the correlation of past experience and knowledge transformation that entrepreneurs leverage to create value throughout the development process as knowledge is generated. More specifically, how the protagonist makes distinctions between useful and irrelevant outcomes in both pre and post start-up phases. Secondly, this essay will review Cope’s most popular differentiation between the two levels of learning: high and low as well as literature around levels of learning (Cope 2003) backed up by the work of Argyris and Schon (1976). This learning is the backbone of an individual’s “mental models”, as researched by Senge (1990), showcasing the base concept undertaken in the decision making process underlined in entrepreneurial development. Thirdly, in relation to transformational experiences this essay will look at Kolb’s (1984) model of experiential learning, that touches the notion of concrete experiences, also mentioned in the literature as critical events or episodes (Cope, 2003), that are vital when striving to achieve higher level learning. Fourthly, a paragraph on link between opportunity recognition and knowledge (Corbett (2005); Archichvili et al. (2003)). Then a succinct description on the three various forms of reflection (Hamilton and Zozimo, 2011) will follow that will outline the importance of Kolb’s model in relation to the cognitive processes in individual’s brain. In conclusion, the dynamic exploration of entrepreneurial learning will be outlined and presented. The paper will now move to discuss Politis' Transformational process and its relevance to entrepreneurial application. In his article, Politis (2005) reviews the available literature on the process of entrepreneurial processes, in experiential contexts. His framework identifies that an entrepreneur’s career experience consists of (1) prior start up experience, (2) prior management experience and (3) industry-specific experience. In aggregate, this is turned into entrepreneurial knowledge by what he classifies the “transformation process”. Two modes of transformation are mentioned - exploration and exploitation. Exploration defines the target when weighing potential actions novel to the problem at hand, whereas exploitation refers to the actions completed in accordance to that novel "learning asymmetries” and current “stocks of knowledge” (Shane, 2000). Furthermore, the investigation shall outline the optimal mechanisms for creating useful outcomes, as literature suggests, that help brede success for entrepreneurs. This is especially true when synchronised in tandem with the exploitation of commercially viable frameworks acting as the base milestone entrepreneurs then wield to further explore viable strategies (Mintzberg & Waters, 1982, cited by Politis, 2005). As a centerpiece, the transformation process helps dictate what entrepreneurs mentally undergo when seizing opportunities for exploration and exploitation. The liability of novelty, is an essential skill for entrepreneurs coping with the nascent environment brought forward by the start up phase, in accordance with Politis who also recognised this as an outcome of entrepreneurial knowledge. With this, Politis' framework will thus be a useful launchpad to the further dive into the understanding of entrepreneurial knowledge. This essay will now move to a brief review of different forms of learning, starting with Cope's learning levels. How can we begin to gauge one's learning? In relation to the essay question it is of high importance to delve into the various forms and levels of learning, as defined by the literature. In his article, Cope (2003) identifies two levels of learning - (1) lower-level learning and (2) higher-level learning. The former leads to more practical, routinized, day-to-day learning, whereas the latter is more profound and fundamental to entrepreneurs. Cope (2005) adds up to this in his article “Towards a dynamic learning perspective of Entrepreneurship” stating that “Such unusual circumstances require heightened attention and experimentation, forcing individuals to question their taken-for-granted beliefs and assumptions”. These two systems can be easily conveyed in the literature around forms of learning that has been studied by Argyris and Schon (1976), who identify two levels of learning, defined through (1) single and (2) double loop learning. This refers to Cope’s (2000) three learning “levels”, where he identifies similarities between the double loop learning and the third level of learning citing that “This is comparable to “double-loop learning” as to whether entrepreneurs have the ability to “learn how to learn”. Learning is an important aspect within the production of useful and relevant outcomes to the entrepreneur as a part of the experiential movement. Thus, how does one fair with opportunity recognition, through the process of on-the-go learning? Literature has previously linked knowledge and opportunity recognition to how it helps weave together a concept or competitive advantage. As portrayed by Archichvili et al. (2003), "Identifying and selecting the right opportunities for new businesses are among the most important abilities of a successful entrepreneur”. They argue that both individual and situational differences influence the multistage process in which opportunity identification is born. This correlates directly with Shane (2000) who assents with different stocks of knowledge displaying the ability that enables entrepreneurs to transform prior learning into exploratory and exploitable opportunity. Therefore, the link between past experiences and stocks of knowledge bring forth a relation when overlooking opportunity exploration. This has also been a point of study by Corbett (2005) who identifies that people learn in different ways, affirming how we all possess unique experiences and thus various stocks of knowledge. This begs the question of entrepreneurial startups and therein their growth capabilities, but how does this manipulation of prior entrepreneurial knowledge actually transfer into relevant and practical skill-sets? Theory around EL within the field of entrepreneurship has widely recognised Kolb’s (1984) model of experiential learning as an effective means of ‘learning’ stating that “individuals learn best when they can cycle through all four forms of learning” (Corbett, 2005 p.480). His four stage model begins with “concrete experience”, linking to Cope’s (2003) “critical incidents”, which are events in an entrepreneur’s life, both positive and negative, that trigger the entrepreneur to reflectively observate. The latter refers to the cognitive processes a person’s brain that help to critically reflect on the event and thereafter build an abstract conceptualisation. Last but not least entrepreneurs must actively experiment in order to complete Kolb’s model and effectively learn. Kolb’s framework is a useful tool that conceptualises the cognitive processes effectively occurring in the entrepreneurs’ minds. His framework is further valuable to understand the importance of reflecting on experiences. The aspect of reflecting on past experiences has also been studied by Hamilton and Zozimo (2011) who identify three forms of reflection. Firstly reflection-in-action must be defined; this is when individuals take a third person’s perspective during their immediate experience to understand what they are doing from ‘outside’, a concept seen in Daniel Cahneman’s “Thinking fast and slow”. This can be linked directly with Cope & Watts’ (2000) and Deakins & Freel’s (1998) ideas of where “entrepreneurship and the growth process is essentially non-linear and discontinuous….The ability of entrepreneurs to maximise knowledge as a result of experiencing these learning events will determine how successful their firm eventually becomes. (p.153)”. Secondly, reflection-on-action, or more specifically when an individual replays a situation in their mind in order to build an opinion or judgement on past events. This links directly with Cope (2005) who draws from literature where “it can be demonstrated that a pertinent aspect of critical events is that the learning from these experiences can be “transformational”” (p.382). Thirdly, reflection-for-action makes an individual use his “prior stock of knowledge” to focus on the future rather than the past and make predictions on future situations. The work of Zozimo and Hamilton helps us understand and formulate the cognitive processes behind reflecting on our actions, moreover it explains the “aha” moments that would potentially lead to what we categorize as “higher-level learning”. An explanation of Politis’ framework gives us an understanding of how entrepreneurs’ past experience influences the entrepreneurial knowledge created via a “transformational” process. Furthermore his framework proves useful in understanding the practical side of learning, i.e. how prior knowledge is turned into useful skills. This essay linked the framework it with the concept of “prior stocks of knowledge” and opportunity identification. Kolb’s model is more cognitive oriented, whereby the question of what happens in one’s brain when a concrete experience emerges? Referring back to the essay question linking these two frameworks together brings upon a ‘mechanism’ that reflects the processes around experiential learning. However Zozimo and Hamilton's paper highlights the importance of reflection on your actions, again, in relation to Kolb’s reflective observation and abstract conceptualisation. Literature gives a notion around change of mental paradigms and fundamental principles of entrepreneurs from higher-level learning. So, if this essay has linked several frameworks around experiential learning within entrepreneurial learning in a means that would bring some sense around the dynamic environment through which entrepreneurs can learn, what triggers effective learning that brings outcomes useful to entrepreneurs? Literature has extensively studied the concept behind “critical learning events”, “episodes”, “events”, “transformational experience”, “instrumental” (Cope 2001; Deakins and Freel, 1998; Rae and Carswell, 2000; Mezirow 1991) that have been used interchangeably by some theorists. They qualify these as prompts for higher-level learning, thereby “creating a shift in “mindset”” (Cope, 2005 cited by Applebaum & Goranson, 1997). Both Cope (2003) and Boud et al. (1995) emphasize the importance of critical events as a means to create “double-loop learning” citing “Some learning can become so related to the self that it enters into our sense of identity and can have considerable importance and become a significant force in our lives.” (Cope, 2005 p.383). A more recent work done by Cope (2011), witnessed the learning journey’s of eight moguls studying their learning and the effect of previous venture failure. Additionally he expresses how these passages are vigorous and negative at first, but can lead to a positive result later on. The entrepreneur obtains the capacity to learn through these experiences in relation to a sequence of crucial events built upon learning blocks that then aid in processing information to help adjust their strategies accordingly in order create amiable evaluations (Deakins and Freel, 1998). In relation, Huovinen and Tihula (2008) contend that failure can either distribute a positive or negative effect on learning, but harmonize that knowledge construction is created via past experience. Cope (2011) puts forward that through negative critical events, one can consider a part of higher level learning often moving in the directional developmental of outcomes in optimistic impressions of experiential learning over time. Critical learning thus implies that it provides entrepreneurs with a advantageous experiential lesson, through ability recognition or realization, giving way to a more refined knowledge base from which they further draw upon (Cope, 2005). In relation to Huovinen and Tihula (2008), Sivonen, from past experience, increased his awareness of strengths and weaknesses attained through past new venture failure leading to the next stage of opportunity identification (Corbett, 2005; Politis, 2005). To sum up this essay has put forward the frameworks around entrepreneurial learning within the experiential context. Starting from Politis’s framework with a purpose to bring some sense of the factors that affect entrepreneur’s learning “mechanism” in a practical way. This essay then highlighted the mental process of acquiring knowledge and understanding through thought (Kolb,1984) and experience (Cope, 2003), linking back to knowledge and opportunity recognition as an imperative stage in learning outcomes for entrepreneurs. A review of Kolb’s model along with highlighting the importance of critical events, and most importantly the reflection entrepreneurs do. This essay explained how failure can affect learning outcomes and touched the notion of negative critical events. Bibliography: Argyris, Chris. “Single-Loop and Double-Loop Models in Research on Decision Making.” Administrative Science Quarterly 21, no. 3 (1976): 363–75. Cope, Jason. “Toward a Dynamic Learning Perspective of Entrepreneurship.” Entrepreneurship Theory and Practice 29, no. 4 (2005): 373–97. Cope, J. P., and G. Watts. “Learning by Doing: An Exploration of Experience, Critical Incidents and Reflection in Entrepreneurial Learning,” 2000. Corbett, Andrew C. “Experiential Learning Within the Process of Opportunity Identification and Exploitation.” Entrepreneurship Theory and Practice 29, no. 4 (2005): 473–91.. Deakins, David, and Mark Freel. “Entrepreneurial Learning and the Growth Process in SMEs.” Learning Organization 5, no. 3 (1999): 144–55. Hamilton, E. and Zozimo, R. (2011). ‘Exploring theories of entrepreneurial learning’, 1-14. Hamilton, E. and Zozimo, R. (2011). ‘Entrepreneurial learning: an experiential learning perspective’, 1-19. Jari Huovinen, and Sanna Tihula. “Entrepreneurial Learning in the Context of Portfolio Entrepreneurship.” International Journal of Entrepreneurial Behaviour & Research 14, no. 3 (2008): 152–71. Politis, Diamanto. “The Process of Entrepreneurial Learning: A Conceptual Framework.” Entrepreneurship Theory and Practice 29, no. 4 (2005): 399–424.