Interaction

In common speech we use "interaction" in a bunch of different contexts: "social interaction," "group interaction," "genetic interaction," and so forth.

Wikipedia, the free, on-line encyclopedia defines it this way:

Interaction is a kind of action that occurs as two or more objects have an effect upon one another. The idea of a two-way effect is essential in the concept of interaction, as opposed to a one-way causal effect...Interaction has different tailored meanings in various sciences. All systems are related and interdependent. Every action has a consequence.

This isn't exactly what we mean by interaction in an entrepreneurial context. Rather, Statistics.com has it closer to our usage of it:

An interaction effect refers to the role of a variable in an estimated model, and its effect on the dependent variable. A variable that has an interaction effect will have a different effect on the dependent variable, depending on the level of some third variable. For example, increasing doses of a hypertension drug might yield increasing reductions in blood pressure, but the benefit with progressively larger doses might be progressively greater for smokers than for non-smokers.

Interaction effects are quite common in life, and entrepreneurs have to think about them on a number of different levels. Their product might, when combined with another, produce a bigger profit. There may be two things going on in their businesses that, by themselves, produce no effect, but when they interact, have big effects. They might be reading a study about something important to their business that talks about interaction effects.

Are you interested in this? I'd like to know. Post a comment.

Entrepreneurship informs all of my professional activities. Entrepreneurial ideas are their life's blood. For my ideas on entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for my ideas on writing and publishing, go to www.kearneymusicschoolmurders.blogspot.com