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Proactive reification: shifting market structure and enrepreneurship.

Introduction

Beer and Impact, Texas

West Texas was parched and dry in many ways in 1960. The temperature was 106 degrees Fahrenheit by June (NOAA, 2005), and liquor sales were illegal in the almost 15,000 square mile area surrounding Abilene (Whitaker, 2001). Texas adopted local option following the 1933 repeal of prohibition in the U.S. Constitution, and each municipality and county in the state could vote to allow or prohibit liquor sales (Gould, 2002). Liquor sales were prohibited in all cities and counties in the nine counties surrounding Abilene because of the area's conservative Bible Belt roots (Whitaker, 2001). The prohibition of legal liquor sales encouraged bootleggers to produce illegal home made liquor or moonshine (O'Neal, 1984).

This situation changed when businessman Dallas Perkins incorporated his 20-acre poultry farm and an adjoining 27 acres on the outskirts of Abilene into the town of Impact in 1960 expressly to sell liquor (Troesser, 2004). The citizens of the newly incorporated town of Impact--mostly Perkins' family and friends--complied with Perkins' wish and voted 18-2 to permit liquor sales (Whitaker, 2001). A series of court battles followed, and the Texas Supreme Court upheld Impact's incorporation and local option election in 1963 (Handbook of Texas Online, 2002). Perkins began selling alcohol in Impact in 1963, and the first month's sales were $463,000 (Haymes, 1995), equivalent to roughly $3.0 million in 2006 dollars.

Entrepreneurs and market creation

The story of Impact illustrates the central point of this paper: Entrepreneurs attempt to create the necessary market structures to enable their concepts to succeed. They convert an abstract idea into something concrete in a process of "proactive reification" (Reification is the process of regarding something abstract as a material thing). This paper addresses the call for examining the boundaries of entrepreneurship and, in particular, the boundary of understanding entrepreneurial opportunities and start-up factors of production (Busenitz, West, Shepherd, Nelson, Chandler and Zacharakis, 2003). This paper also suggests that market structuring is a unique entrepreneurial opportunity.

Market structures consist of 1) the set of elemental factors involved in the production and distribution of goods or services, and 2) the set of relationships among those factors (Black and Sherman, 2004; Sarasvarthy and Dew, 2005). Proactive reification, as defined in this paper, is the process of actively reifying previously unrelated sets of market factors to create new market structures. The entrepreneur's need to create market structures contrasts with conventional views of strategy that assume market structures are fixed as part of the environment and that the role of the strategist is to search for suitable matches between available resources and existing market structures that produce the optimum level of economic rent (Rumelt, Schendel, and Teece, 1991, 2005). Few studies have linked competitive dynamics and market dynamism (Meyer and Banks, 1999; Soberman and Gatignon, 2005). This paper suggests that entrepreneurs create dynamic market structures in the process of proactive reification and that the focus on reifying market structures is a powerful tool for the entrepreneur versus the conventional strategic view of fixed market structure and resource-based strategy (Barney, 1991). The next discussion will explore and explain the concept of market structures and proactive reification.

Market Factors and Market Structure

Market factors are environmental and competitive elements that constitute a firm's external environment and constrain firm action (Porter, 1980). Market factors include environmental items such as inflation, and technological or legal shifts and competitive factors such as competitors, entrants, and rivalry dynamics. Significant business strategy literature is dedicated to examining the effect of market factors on firm performance, specifically Porter's five forces industry model and the technology management literature (Porter, 1980; Sherman, Hitt, Demarie, and Keats, 1999).

Market structure is both the set of elemental factors involved in the production and distribution of goods or services and the set of relationships among those factors. Market structure can be viewed as constellations of market factors and how they are arranged and connected to each other. Market structure provides boundaries for the set of elements and relationships among those elements that constitute member firms' market networks (Cramer, 1993; Waldorp, 1992). Market structures allow markets to operate as interconnected exchanges across firms and to function successfully as large, complex, interactive adaptive networks (Anderson, Arrow, and Pines, 1988). Market structures, like other adaptive networks, are governed by rules generated over time as the network elements and market factors interact with each other (Voss, Voss and Moorman, 2005; Anderson, 1999; Stacey, 1995; Waldorp, 1992). Some of these rules are formally documented, others are not. The liquor market structures in West Texas before the incorporation of Impact was that fundamentalist churches opposed legalizing liquor sales, and the churches' costs to battle legalizing liquor sales often were paid for by bootleggers producing illegal liquor, known as moonshine (Haymes, 1995; Whittaker, 2001). The churches and the bootleggers were confederates with different motives, and the churches, the bootleggers, legal system and the community as a whole was components of the market structure of liquor sales in West Texas. Rules governed each party's behavior, i.e., church ministers were the vocal forces opposing legalized liquor sales, the bootleggers financed the ministers' fight, and neither took direct action against the other.

Market structures are a more complex and dynamic market conceptualization than market orientation, market factors, or industry structures (Soberman and Gatignon, 2005). Market structures include all market elements at the firm, industry, and macro environmental levels and all of the interaction among these elements as a network constellation that affect how a market operates and how firms generate economic rent. The result is that market structures are dynamic, three-dimensional interactive views of the external environment in action versus the relatively static, two-dimensional view of the external environment provided by conventional conceptualizations, such as market orientation and industry structures.

A firm's market structure also differs from its market orientation in that market orientation is focused on a firm's implementation of marketing concepts to support its entrepreneurial efforts (Hult, Snow and Kandemir, 2003; Barrett and Weinstein, 1998). A finn's market orientation will be subordinate to its market structure; because how a firm views the market will determine how it communicates its marketing message to potential customers. A firm that views its market structure as defined by three large producers selling to four large buyers will present a different market orientation than one that views its market as consisting of a dozen producers selling to more than 100 equal-sized buyers. The market orientation is driven partially by the market structure.

The elemental components of market structures are market factors, such as the unemployment rate or the effects of a technological shift. Market structures consist of market factors and evolving relationships among them, and interactions of the market factors with the firm and of individuals within the firm. Relationships among market factors are guided by individual understandings of the environment and by rules that guide individual action based on experience with the environment (Aldrich, 2001; Weick, 1995).

Market structures are broader than industry structures, such as the five forces model (Porter, 1980). Industry structures address the market factors within the identified industry, such as the power of buyers, sellers, and substitutes or the effects of rivalry or new entrants. Industry structures are focused at the industry level and do not address the interaction among environmental factors or industry factors, e.g., interest rate changes affecting the rate of technology development or rivalries that may support the genesis of new substitutes.

The evolving role of market structure in strategic and entrepreneurial literatures

The strategic and entrepreneurial literatures have addressed market structure. The strategy literature normally treats market structure as fixed within the strategic timeframe and as exogenous to the strategic process as a result (Soberman and Gatignon, 2005). Early strategy models acknowledged that monopolistic firms have the power to dictate some market factors and market factor relationships (Bain, 1956; Mason, 1939). However, market structures were viewed only as an outcome of the search for monopolistic powers, not as variables open to manipulation.

Market structure was addressed more directly by the industry-organization (I-O) economics paradigm, which assumed intra-industry and inter-firm competition to be more likely than monopoly power (Porter, 1980, 1985). I-O economics holds that market-specific variables determine industry structure and value generation, e.g., an industry structure as defined in terms of the power of buyers, suppliers, substitutes, new entrants, and rivals produces certain conduct within the industry, and industry conduct determines an industry's ability to generate economic rent. Market structure is central and static in I-O economics, i.e., industry and market structures exist and firms cannot change the structure of either. Firms choose an industry because of its industry structure and resultant potential profitability (Barney, 1991).

Market structure is addressed even more specifically by transaction cost economics, a subset of I-O economics, which focuses on the interface and boundaries between markets and organization structure (Hoskisson, Hitt, Wan, and Yiu, 1999; Williamson, 1975). Market structure is critical to transaction cost theory because the relationship among market factors affects ex ante contracts and ex post legal protections, and helps define how each affects organizational choices (Argyres and Liebeskind, 1999; Williamson, 1985).

Market structure affects assessments of firm competitiveness in the resource-based view of strategy, another I-O economics offshoot (Barney, 1991; Mahoney and Pandian, 1992; Wernerfelt, 1984). Assessments of resource value, rarity, and inimitability depend on the market where these resources are deployed and how that market is organized (Dierickx and Cool, 1989). Resource value, rarity, and inimitability determined the relative competitive advantage of the resource (Barney, 1991). Firm resource deployment activities attempt to control market behavior by managing the stocks and flows of resources entering the market to manipulate resource, value, rarity, and inimitability (Ghemawat, 2001). Successful attempts to influence and change market behavior create changes in the market structure as market factors react. However, the resource-based strategist's focus is on resource deployment and resulting valuation changes; changes to the market structure are treated as given and incidental.

Overall, the strategy literature has either focused on the internal workings of the firm or employed a wide, diffuse, and relatively static view of the external environment. Porter's five forces model provides a taxonomy of market factors, and the resource based view implicitly suggests that market structure is important. However, neither specifically addresses the role of market structure as an endogenous source of environmental variability that directly affects strategic outcomes.

The entrepreneurship literature takes a decidedly different view of market structure than the strategy literature by viewing entrepreneurs as creators and destroyers of market structures (Black, 1998; Brazael and Hebert, 1999; Kirschhoff, 1991). Entrepreneurs pull together suppliers, customers, and producers and coordinate their activities (Kirzner, 1979, 1982, 2000; Lachmann, 1977). Marshall noted in his 1890 treatise Principles of Economics that the entrepreneur organizes the land, labor, and capital to create new goods or improve production of existing goods (Marshall, 1961). Marshall added that entrepreneurs need both a thorough understanding of the industry they are working in and the willingness to act with less than complete information. The result is that entrepreneurs identify opportunities based on their prior knowledge (Shane, 2000; Ng, 2004).

Entrepreneurs form and reform markets based on their strategic insights of how to structure factors of production through creative destruction, the combined process of creating new markets while destroying old markets (Schumpeter, 1934). Creative destruction is the dissolution of an existing market structure and creation of a new one with new or differently-organized market relationships and factors. The entrepreneurial focus is to select or create a market where a given resource set can be used to maximize economic rent (Lachmann, 1977; Hitt and Ireland, 2002). Entrepreneurs may redeploy an underutilized set of resources to increase its rent-generating capability by manipulating or altering the relationship among market and production factors (Sarasvarthy and Dew, 2005; Kirzner, 1982). The entrepreneur acts to mold the market structure to meet the entrepreneur's needs. Market structure is an endogenous variable in entrepreneurial thinking, and determination of market structure is a conscious entrepreneurial choice (Black and Farias, 2000). The focus of the entrepreneur's search for new market structures is focused on meeting the entrepreneur's needs, even if the requisite resources are not within the entrepreneur's current control (Sahlman, Stevenson, Roberts, and Bhide, 1999). The key for the entrepreneur is that the market structure meets the entrepreneur's needs and not the control of market assets as such. The entrepreneur accomplishes this market construction by specificating the factors composing the market structure and the relationships among them, and among the factors and market participants. Developing research designs that allow detailed examination of this process has proven difficult (Vebasaran, Westhead, and Wright, 2001).

Summary

This discussion suggests that market structure is an exogenous, environmental condition in conventional strategic thought and an endogenous variable in the entrepreneurship literature. Fitting the firm's strategy to the environment and its underlying market structure as an environmental variable is critical to conventional strategy-making (Black, 2003; Worley, Hitchin, and Ross, 1996). The entrepreneurial literature contrasts with this view and holds that direct manipulation of the market structure--market creation and destruction--is central to entrepreneurial behavior (Kirzner, 2000). However, the entrepreneurial literature does not discuss this destruction and creation in terms of market structure and focuses instead on entrepreneurial characteristics or actions (Alvarez and Busenitz, 2001). The next section of this paper looks at the process of proactive reification as a way to develop a market-based view of entrepreneurship.

Proactive Reification and a Market-Based View of Entrepreneurship

The manipulation of market structures is central to the entrepreneurial process. As noted, markets, market structures, and market manipulations are reifications (Weick, 1979, 1995). Individuals often treat abstractions as if they were real as part of socially constructed systems of understanding (Berger and Luckmann, 1966; Weick, 1995). Organizations, markets, and industries are reifications and do not exist in real space (Dutton and Dukerich, 1991; Lukacs, 1971; Weick, 1979, 1995). The reification process begins when a set of assets, firms, or market entities is labeled as an entity as part of an investigation or research (Alvarez and Busenitz, 2001; Cyert and March, 1963). Acceptance of this construct by an industry, society, or culture leads to its acceptance as a social construction, and society begins to treat the reification as if it were real. The reification of organizational assets as corporations that exist as legal fctions that are "an artificial being" is an accepted element of U.S. common law (Schneeman, 1997:159). The real property that became Impact, Texas, did not change in any meaningful physical way when it was incorporated into the town of Impact. The town of Impact, the city of Abilene, and the state of Texas are all reifications treated as real entities.

This discussion of reification suggests that entrepreneurs may leverage the reification processes first to construct the appropriate market structures to support their entrepreneurial endeavor and then guide social acceptance of the reification to generate support and gain acceptance. Social acceptance of the market structure reification requires that the focal industry group begins to believe that it represents a new set of relationships among market factors, and that these relationships and those that hold this belief are rewarded by market outcomes. Southwest Airlines is the product of its reification of its market as an open competitive intrastate market outside of the interstate U.S. domestic airline market dependent on government intervention through the rate and route setting activities of the Civil Aeronautics Board (Freiberg and Freiberg, 1996). This reification was critical to Southwest's success as customers and others began to accept the Southwest perspective on how to interpret the market. The creation of Impact was the result of Perkins' reification of a 20-acre poultry farm and surrounding acreage as the first step in his entrepreneurial effort to sell liquor in west Texas. The creation of new reifications challenges the existence of prior ones.

Proactive reification

Reifications can be proactive or passive. Proactive reification is a priori creation of new market structures to create a market where none existed. Entrepreneurs attempt to shape the environment to meet their needs or vision (Sahlmann, et al, 1999), and proactive reification is the process of conceptually assembling previously unrelated market factors or re-arranging the structure and relationship of market factors to create new markets. The entrepreneur promotes a new reification by developing strategies that force changes in market factors, market factor relationships, and how a market views itself or its stakeholders. These shifts can be accomplished by manipulating market timing, disintermediation of market factors, introduction of new market mechanisms, and including or excluding previous market factors. Examples include developing strategies that reduce the role of government regulation as a market factor (e.g., Southwest Airlines), creating new market structures where individuals can buy and sell almost anything to almost anyone in faceless transactions (e.g., E-Bay), or creating a new legal entity to accommodate formerly illegal behavior (e.g., Impact).

The success of entrepreneurial proactive reification centers on the entrepreneur's successfully guiding the reification of market structures that integrate strategic, environmental, and internal elements into an effective orientation to address market needs (Covin and Slevin, 1991). The entrepreneur accomplishes this by guiding market perceptions that may be influenced by bounded rationality, allegiance to prior paradigms, self-interest, and other individual or organizational biases and schemas (Augier, 2001; Simon, 1992; Weick, 1979; Williamson, 1985).

In passive reifications, entrepreneurs discover markets where the existing reification of market structure is losing efficacy and take advantage of the situation. For example, converting a vacant Houston office building into a refuge for hurricane victims is a case of passive or reactive reification. The entrepreneur did not create the hurricane or the evacuation but simply recognized a market being created by macro-environmental events.

The paradox of market destruction

Reifying new market structures is one important step in proactive reification. However, an equally important step is destruction of the prior market structure to make way for acceptance of the new one. Market destruction is no more real than any other reification. Many market factors and relationships that composed the prior reification continue to exist in the new reification. The process of market destruction abandons the shared belief that the former market structure is a superior way to do business.

Market destruction may result in a turbulent environment where "the very ground is in motion" (Emery and Trist, 1965:23). This turbulent environment may create a paradox in that market destruction creates a heightened need for sensemaking, and sense-making becomes more difficult as market factors and relationships change dramatically. Market participants enter a stage of "vu jade," loosely translated as "I have never been here before" (Weick, 1993:633). They struggle to find environmental cues to generate sense-making schemas (Weick, 1993). This paradox and confusion may create additional opportunities for the entrepreneur to influence reification of new market structures.

An example of market destruction is the 1984 court-ordered breakup of AT&T into the regional Bell operating companies (RBOCs). AT&T's previous monopoly power dominated market relationships and was eliminated by the breakup. The number of competitors rose as AT&T was replaced with separate RBOCs and new telecommunications competitors, e.g., Sprint, MCI. The role of existing market factors and the rise of new ones created new and dramatically different market factor relationships. The resulting market destruction led to replacement of an old market structure (monopoly) with a new one (competition). The more entrepreneurial competitors--Sprint and MCI--may have had greater influence on shaping the market because of confusion resulting from the changes than if the changes had been more gradual.

Market destruction and the failure of market structures also may mean that the dominant logics permeating an industry also fail, or the macro-cultures shared within the market are no longer viable (Abrahamson and Fombrun, 1994; Prahalad and Bettis, 1986). Again, the abandoning of these logics and macro-cultures that provide meaning when the market needs clarity may create opportunities for entrepreneurial positive reification. Individual firms may ride out brief turbulent periods with additional buffering or by drawing on resource reserves to deal with the increased uncertainty (Milliken, 1987; Pfeffer and Salancik, 1978). However, relying on buffering or slack resources is not a long-term alternative to adapting to the new market structure, as several airlines found after the industry was deregulated.

The process of proactive reification is, therefore, a didactic process of reification of new market structures and reification of the destruction of old market structures. The market factors that compose both old and new market structures are not created or destroyed; the process of proactive reification occurs first in the mind of the entrepreneur and then in the collective mind of the marketplace through social construction.

Proactive reification and the market-based view of entrepreneurship

Viewing entrepreneurship as a continuing construction-destruction of proactive reifications suggests that entrepreneurial behavior depends on the ability to identify appropriate markets, market factors, and market factor relationships, to generate a reification of these market factors that will be an accepted element of the current social construction, and to reify the destruction of the prior market structure. The entrepreneur is dedicated to resolving the problem of creating market structures that meet his or her needs by identifying which market factors and which relationships among them are important.

The proactive reification view of entrepreneurship is market-based and an extension of earlier work by Schumpeter (1934), Covin and Slevin (1991), Gartner (1992), and Sahlman, et al. (1999). Schumpeter noted that entrepreneurship activity occurs when the entrepreneur actively envisions and "carries out new combinations" as a means toward creative destruction (1934:78). Similarly, Gartner notes that entrepreneurs work within emerging frameworks, managers operate within frameworks made more stable by time, and the entrepreneur's work is complete once an organization is created (Gartner, 1994). Sahlman, et al. (1994) buttress this by suggesting that entrepreneurial behavior focuses on identifying market opportunities more than firm strengths. Schumpeter, Covin and Slevin, Gartner, and Sahlman, et al echo a common theme that entrepreneurs combine new resources within emerging contexts--the same behavior this paper describes as reifying market structure.

This discussion provides a way to see the critical differences between a strategist and an entrepreneur. The strategist approaches the issue of generation of economic rent from a resource perspective: What resources do the firm control (Barney, 1991)? The entrepreneur approaches rent generation with the question of how the necessary market can be created. This differentiation parallels that between promoter and trustee offered by Sahlman, et al (1994). Here are the net effects of the two approaches: 1) The strategists' work is a long-term engagement centering on matching controlled resources with existing and given markets, and 2) The entrepreneurs' work is a shorter-term engagement centering on the reification of necessary market structures that provide the opportunity to generate economic rent. The strategist is matching resources to markets while the entrepreneur is creating markets and hoping to take advantage of those markets once created. The strategist's thinking and actions are resource-based, and the entrepreneur's thinking and action are market-based. They both exist in the same world but "see" the world through different lenses. It is also possible for an individual to look at the same market through both lenses--the strategist and the entrepreneur--to generate a fully-dimensional view of the market and the resources needed. This paper is not suggesting one view is superior to the other, only that they are different. Novelist F. Scott Fitzgerald noted that a sign of a superior intelligence is the ability to look at the same issue through multiple conceptual frameworks and keep functioning (Morgan, 1989).

Discussion

Back to Impact

The 1960 west Texas market structure before the incorporation of Impact did not provide for liquor stores. The political-legal and socio-cultural systems prohibited legal operation of liquor stores, and the threat of entry into the retail commerce industry was nonexistent because of government regulations aligned with the area's conservative religious beliefs (Milliken, 1987; Porter, 1980; Whitaker, 2002). Perkins reified a new market structure by incorporating his poultry farm and the nearby acreage into the town of Impact that could then vote for local option liquor sales. The reification and proactive creation of Impact was intended to provide Perkins with an environment where his resources could generate economic rent (Barney, 1991).

Perkins' reification engendered market destruction of the old market where liquor sales were prohibited and moonshine was a necessary albeit illegal byproduct by engineering the creation of a new market where liquor sales were permitted.

Impact and the Frankenstein effect

The story of Impact illustrates another issue faced by entrepreneurs: an entrepreneur does not control the new market structure once the reification becomes socially constructed and accepted. Perkins reification of a market where liquor sales were legal began boom times for Impact. The boom times ended when nearby Abilene passed liquor sales by local option in 1978 (Whitaker, 2001). The effect was immediate. The liquor store closed, and the population of Impact declined from its high of 61 in 1970 to 39 at the end in 2000 (Troesser, 2004; U.S. Census Data, 2000). Broader social acceptance of the assumptions behind the reification of Impact led to its demise as an entrepreneurial effort.

Mary Shelley described a similar phenomenon of creator being destroyed by creation in the 19th century classic Frankenstein, or the Modern Prometheus, in which the inventor, Dr. Frankenstein, is killed by the monster he created (Shelley, 1969). This "Frankenstein effect" occurs because the newly reified market structure interacts with the environment, and these interactions create evolutionary pressures on the market structure that its creator has no control over. Apple's 1979 introduction of the personal computer created the personal computer industry as an entirely new market structure, which evolved with the introduction of the IBM PC, PC clones, and the Windows operating system. Apple was overwhelmed by the industry it created and narrowly missed bankruptcy in 1997 (Linzmayer, 2004). Pacific Southwest Airlines, the first airline to operate outside of U.S. interstate regulations by flying solely within the state of California, did not survive the deregulation its entrepreneurial actions helped to create (Petzinger, 1995).

The lesson of the Frankenstein effect is that market creation is a continuing process. The inability of market leaders to move outside of the existing market structures creates entrepreneurial opportunity. Entrepreneurs can lay the ground work for their destruction if they ignore how the market structures they reify evolve through the process of social construction. The market-based entrepreneurial view is as dependent on market structures evolving as products of social construction as it is on the entrepreneur reifying new market structures. Entrepreneurs can be both creators and victims of new market structure reifications.

Summary and Conclusions

This paper has proposed a market-based view of entrepreneurship based on the ability of entrepreneurs to reify new market structures and change existing ones. This view offers another lens for seeing and examining how entrepreneurs create opportunities. The paper also examined how the market-based view of entrepreneurship extends earlier conceptualizations offered by Schumpeter, Covin and Slevin, Gartner, and Sahlman and colleagues, and offers an initial examination of issues facing the entrepreneur reifying new market structures, including the Frankenstein effect.

The discussion of proactive reification builds a richer definition of entrepreneurship and the entrepreneurial process. Gartner (1994) promoted the search for a better definition for entrepreneurship and questioned whether a broadly accepted conceptualization of entrepreneurship was possible. This paper contributes to the larger conversation, suggesting proactive reification of new market structures as one form of new venture creation. The idea that entrepreneurs may create new market structures through proactive reification does not obviate or minimize other forms of entrepreneurial behavior. The market-based view of entrepreneurship inherent in proactive reification suggests that one way to view entrepreneurial behavior is by understanding how shifting market factors or their relationships can destruct existing market structures and create new ones. An important caveat is that only reifications that can become part of the larger social construction are viable. And once reification becomes part of that larger social construction, the reification is an entity unto itself, beyond the control of its creator.

Potential future research

This discussion lays the groundwork for empirical study of the entrepreneurial reification process and illustrates the power of qualitative story-telling to provide insight into the entrepreneurial process. Further qualitative efforts to capture the richness of the entrepreneurs' stories needs to be encouraged and complemented by quantitative research into the nature of market structures as networks. Specifically, qualitative studies that examine the mechanics of market structure creation in a variety of entrepreneurial enterprises to determine a common mechanism or pattern are encouraged. Such studies would rely on intense, in-depth interviews and research with the entrepreneurs responsible for the reification and those who defended the existing market structure. Similar methods could be used to explicate the Frankenstein effect in more detail and establish its necessary precedents and boundary conditions.

Potential practitioner applications This paper offers entrepreneurs a model that may be useful for self-reflection. Some believe that entrepreneurial tendency is an innate resource and cannot be taught (Gartner, 1994). This paper suggests that entrepreneurial reification of market structures can be explicated and, therefore, learned. Another application for the entrepreneurial practitioner is knowledge that the process of market structure reification helps to clarify issues arising from the Frankenstein effect. A key lesson presented to entrepreneurs is that market creation and destruction is a continuing process. Entrepreneurs should continually challenge the efficacy of the market structures they have created and how these structures have evolved.

Acknowledgement: The authors wish to acknowledge and thank an anonymous reviewer for valuable insights and suggestions that aided development of the concepts in this paper.

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Dr. Sherman consults in the areas of managing strategic change and exploring organizational and individual creativity. His research focuses on the individual, organizational, and market effects of change, and he has published in a number of journals. Dr. Black investigates the development of strategic competencies in complex or ambiguous environments using computer models that detail leader-follower interactions. Her work has appeared in several publications, and she consults and provides leadership training in a number of public and private organizations.
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Author:Sherman, W. Scott; Black, Janice A.
Publication:SAM Advanced Management Journal
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Date:Mar 22, 2006
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