Dollinger index

72 ENTREPRENEURSHIP

firm’s industry, but is still important for the new venture. This is the macroenviron-

ment in which the firm operates. This domain has the most uncertainty. Uncertainty is

a barrier to entrepreneurship, but some people are willing to bear this uncertainty.^1

There are six identifiable, though overlapping, segments within the macroenvironment:

1. Politics and government


2. Stakeholders


3. Macroeconomy


4. Technology


5. Sociodemography


6. Ecology
   In this chapter, we will describe the characteristics and segments of the macroenvi-
   ronment, as well as the characteristics and segments of the industry or competitive envi-
   ronment. The distinction between the two environments is somewhat artificial because,
   ultimately, institutions and organizations use them interchangeably. Indeed, the organ-
   izations and institutions themselves are also exchangeable. They come and go as society,
   technology, and the rules of law dictate. As new industries are created from new tech-
   nologies or the desires of consumers, resources from deteriorating industries are con-
   verted for their use. The purchasing power of a declining industry’s customers can be
   redirected either to a new industry or to another, more stable industry. Thus, the con-
   centric circles representing the business environment appear as broken lines to depict the

FIGURE 3.1 Schematic of the New Venture’s Environment

Ecological Technological

Stakeholders

Economic

Environment

Sociodemographic

Political

Industry

New

Venture