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Austrian Perspectives on Entrepreneurship, Strategy, and Organization
- Nicolai J. Foss, Peter G. Klein, Matthew McCaffrey
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- 05 October 2019
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- 17 October 2019
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The 'Austrian' tradition is well-known for its definitive contributions to economics in the twentieth century. However, Austrian economics also offers an exciting research agenda outside the traditional boundaries of economics, especially in the management disciplines. This Element examines how Austrian ideas play a key role in expanding the understanding of fields like entrepreneurship, strategy, and organization. It focuses especially on the vital role that entrepreneurs play in guiding economic progress by shaping firms and their strategic behavior. In doing so, it explains a wide range of contributions that Austrian economics makes to the understanding of key problems in management, while also highlighting many directions for future work in this inspiring tradition.
Environmental, ecological, and paleoanthropological implications of the late Pleistocene mammalian fauna from Equus Cave, northern Cape Province, South Africa
- Richard G. Klein, Kathryn Cruz-Uribe, Peter B. Beaumont
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- Journal:
- Quaternary Research / Volume 36 / Issue 1 / July 1991
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- 20 January 2017, pp. 94-119
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The late Pleistocene deposits of Equus Cave, northern Cape Province, South Africa, have provided more than 30,000 taxonomically identifiable mammal bones from 48 species. Context, associations, and features of the bone assemblage implicate brown hyenas as the main accumulators. The fauna is significant mainly because (1) it supplements previous evidence that regional climate was cooler and possibly also somewhat moister during part(s) of the late Pleistocene, but deviated less from the historic norm than in areas farther south; (2) it shows that Bond's springbok, which became extinct in the early Holocene, differed from the surviving common springbok not only in important morphological respects but also in reproductive pattern; and (3) it sustains earlier suggestions that an abundance of carnivores, a paucity of small hard bones, and increase in the cranial/postcranial ratio with species size, and exclusively attritional mortality profiles are features that tend to differentiate assemblages accumulated by brown hyenas from those accumulated by people. In addition, pending firmer dating, the fragmentary human fossils from Equus Cave may support an exclusively African origin for anatomically modern humans.
Can Entrepreneurship Be Taught?
- Peter G. Klein, J. Bruce Bullock
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- Journal of Agricultural and Applied Economics / Volume 38 / Issue 2 / August 2006
- Published online by Cambridge University Press:
- 09 September 2016, pp. 429-439
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Is entrepreneurship an innate ability or an acquired skill? Can entrepreneurial acumen be achieved and enhanced through education and training, or are certain people “born” to be entrepreneurs or to act entrepreneurially? Economists and management theorists give widely divergent answers to these questions. This paper reviews the major approaches to teaching entrepreneurship, primarily at the undergraduate level, and relates them to economic theories of entrepreneurship. Surprisingly, we find little connection between the leading approaches to entrepreneurship education and economists' understanding of the entrepreneurial function. We assess likely explanations for the lack of contact between these two groups of scholars and suggest possible improvements.
Introduction to a forum on the judgment-based approach to entrepreneurship: accomplishments, challenges, new directions
- NICOLAI J. FOSS, PETER G. KLEIN
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- Journal:
- Journal of Institutional Economics / Volume 11 / Issue 3 / September 2015
- Published online by Cambridge University Press:
- 29 April 2015, pp. 585-599
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Over the last three decades entrepreneurship has become a hot topic in economics and management. Much of the entrepreneurship research literature has built upon insights of economists such as Schumpeter, Knight, and Kirzner, each of whom has inspired a distinct strand of entrepreneurship theory and application. Schumpeterian innovation and Kirznerian alertness are the best-known concepts of entrepreneurship, but a newer research stream is building on Knight's idea of entrepreneurship as judgmental decision-making under uncertainty. What we call the judgment-based view models entrepreneurs as owning, controlling, and combining heterogeneous assets, which differ in their attributes, and deploying these assets within a firm to produce goods and services in anticipation of economic profit. This Forum presents three papers that develop, extend, and challenge the judgment-based view of entrepreneurship, focusing on the foundations of judgment, the processes of entrepreneurial resource assembly, and the relationship between the judgment-based view and other theories of economic organization.
Contributors
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- By Mitchell Aboulafia, Frederick Adams, Marilyn McCord Adams, Robert M. Adams, Laird Addis, James W. Allard, David Allison, William P. Alston, Karl Ameriks, C. Anthony Anderson, David Leech Anderson, Lanier Anderson, Roger Ariew, David Armstrong, Denis G. Arnold, E. J. Ashworth, Margaret Atherton, Robin Attfield, Bruce Aune, Edward Wilson Averill, Jody Azzouni, Kent Bach, Andrew Bailey, Lynne Rudder Baker, Thomas R. Baldwin, Jon Barwise, George Bealer, William Bechtel, Lawrence C. Becker, Mark A. Bedau, Ernst Behler, José A. Benardete, Ermanno Bencivenga, Jan Berg, Michael Bergmann, Robert L. Bernasconi, Sven Bernecker, Bernard Berofsky, Rod Bertolet, Charles J. Beyer, Christian Beyer, Joseph Bien, Joseph Bien, Peg Birmingham, Ivan Boh, James Bohman, Daniel Bonevac, Laurence BonJour, William J. Bouwsma, Raymond D. Bradley, Myles Brand, Richard B. Brandt, Michael E. Bratman, Stephen E. Braude, Daniel Breazeale, Angela Breitenbach, Jason Bridges, David O. Brink, Gordon G. Brittan, Justin Broackes, Dan W. Brock, Aaron Bronfman, Jeffrey E. Brower, Bartosz Brozek, Anthony Brueckner, Jeffrey Bub, Lara Buchak, Otavio Bueno, Ann E. Bumpus, Robert W. Burch, John Burgess, Arthur W. Burks, Panayot Butchvarov, Robert E. Butts, Marina Bykova, Patrick Byrne, David Carr, Noël Carroll, Edward S. Casey, Victor Caston, Victor Caston, Albert Casullo, Robert L. Causey, Alan K. L. Chan, Ruth Chang, Deen K. Chatterjee, Andrew Chignell, Roderick M. Chisholm, Kelly J. Clark, E. J. Coffman, Robin Collins, Brian P. Copenhaver, John Corcoran, John Cottingham, Roger Crisp, Frederick J. Crosson, Antonio S. Cua, Phillip D. Cummins, Martin Curd, Adam Cureton, Andrew Cutrofello, Stephen Darwall, Paul Sheldon Davies, Wayne A. Davis, Timothy Joseph Day, Claudio de Almeida, Mario De Caro, Mario De Caro, John Deigh, C. F. Delaney, Daniel C. Dennett, Michael R. DePaul, Michael Detlefsen, Daniel Trent Devereux, Philip E. Devine, John M. Dillon, Martin C. Dillon, Robert DiSalle, Mary Domski, Alan Donagan, Paul Draper, Fred Dretske, Mircea Dumitru, Wilhelm Dupré, Gerald Dworkin, John Earman, Ellery Eells, Catherine Z. Elgin, Berent Enç, Ronald P. Endicott, Edward Erwin, John Etchemendy, C. Stephen Evans, Susan L. Feagin, Solomon Feferman, Richard Feldman, Arthur Fine, Maurice A. Finocchiaro, William FitzPatrick, Richard E. Flathman, Gvozden Flego, Richard Foley, Graeme Forbes, Rainer Forst, Malcolm R. Forster, Daniel Fouke, Patrick Francken, Samuel Freeman, Elizabeth Fricker, Miranda Fricker, Michael Friedman, Michael Fuerstein, Richard A. Fumerton, Alan Gabbey, Pieranna Garavaso, Daniel Garber, Jorge L. A. Garcia, Robert K. Garcia, Don Garrett, Philip Gasper, Gerald Gaus, Berys Gaut, Bernard Gert, Roger F. Gibson, Cody Gilmore, Carl Ginet, Alan H. Goldman, Alvin I. Goldman, Alfonso Gömez-Lobo, Lenn E. Goodman, Robert M. Gordon, Stefan Gosepath, Jorge J. E. Gracia, Daniel W. Graham, George A. Graham, Peter J. Graham, Richard E. Grandy, I. Grattan-Guinness, John Greco, Philip T. Grier, Nicholas Griffin, Nicholas Griffin, David A. Griffiths, Paul J. Griffiths, Stephen R. Grimm, Charles L. Griswold, Charles B. Guignon, Pete A. Y. Gunter, Dimitri Gutas, Gary Gutting, Paul Guyer, Kwame Gyekye, Oscar A. Haac, Raul Hakli, Raul Hakli, Michael Hallett, Edward C. Halper, Jean Hampton, R. James Hankinson, K. R. Hanley, Russell Hardin, Robert M. Harnish, William Harper, David Harrah, Kevin Hart, Ali Hasan, William Hasker, John Haugeland, Roger Hausheer, William Heald, Peter Heath, Richard Heck, John F. Heil, Vincent F. Hendricks, Stephen Hetherington, Francis Heylighen, Kathleen Marie Higgins, Risto Hilpinen, Harold T. Hodes, Joshua Hoffman, Alan Holland, Robert L. Holmes, Richard Holton, Brad W. Hooker, Terence E. Horgan, Tamara Horowitz, Paul Horwich, Vittorio Hösle, Paul Hoβfeld, Daniel Howard-Snyder, Frances Howard-Snyder, Anne Hudson, Deal W. Hudson, Carl A. Huffman, David L. Hull, Patricia Huntington, Thomas Hurka, Paul Hurley, Rosalind Hursthouse, Guillermo Hurtado, Ronald E. Hustwit, Sarah Hutton, Jonathan Jenkins Ichikawa, Harry A. Ide, David Ingram, Philip J. Ivanhoe, Alfred L. Ivry, Frank Jackson, Dale Jacquette, Joseph Jedwab, Richard Jeffrey, David Alan Johnson, Edward Johnson, Mark D. Jordan, Richard Joyce, Hwa Yol Jung, Robert Hillary Kane, Tomis Kapitan, Jacquelyn Ann K. Kegley, James A. Keller, Ralph Kennedy, Sergei Khoruzhii, Jaegwon Kim, Yersu Kim, Nathan L. King, Patricia Kitcher, Peter D. Klein, E. D. Klemke, Virginia Klenk, George L. Kline, Christian Klotz, Simo Knuuttila, Joseph J. Kockelmans, Konstantin Kolenda, Sebastian Tomasz Kołodziejczyk, Isaac Kramnick, Richard Kraut, Fred Kroon, Manfred Kuehn, Steven T. Kuhn, Henry E. Kyburg, John Lachs, Jennifer Lackey, Stephen E. Lahey, Andrea Lavazza, Thomas H. Leahey, Joo Heung Lee, Keith Lehrer, Dorothy Leland, Noah M. Lemos, Ernest LePore, Sarah-Jane Leslie, Isaac Levi, Andrew Levine, Alan E. Lewis, Daniel E. Little, Shu-hsien Liu, Shu-hsien Liu, Alan K. L. Chan, Brian Loar, Lawrence B. Lombard, John Longeway, Dominic McIver Lopes, Michael J. Loux, E. J. Lowe, Steven Luper, Eugene C. Luschei, William G. Lycan, David Lyons, David Macarthur, Danielle Macbeth, Scott MacDonald, Jacob L. Mackey, Louis H. Mackey, Penelope Mackie, Edward H. Madden, Penelope Maddy, G. B. Madison, Bernd Magnus, Pekka Mäkelä, Rudolf A. Makkreel, David Manley, William E. Mann (W.E.M.), Vladimir Marchenkov, Peter Markie, Jean-Pierre Marquis, Ausonio Marras, Mike W. Martin, A. P. Martinich, William L. McBride, David McCabe, Storrs McCall, Hugh J. McCann, Robert N. McCauley, John J. McDermott, Sarah McGrath, Ralph McInerny, Daniel J. McKaughan, Thomas McKay, Michael McKinsey, Brian P. McLaughlin, Ernan McMullin, Anthonie Meijers, Jack W. Meiland, William Jason Melanson, Alfred R. Mele, Joseph R. Mendola, Christopher Menzel, Michael J. Meyer, Christian B. Miller, David W. Miller, Peter Millican, Robert N. Minor, Phillip Mitsis, James A. Montmarquet, Michael S. Moore, Tim Moore, Benjamin Morison, Donald R. Morrison, Stephen J. Morse, Paul K. Moser, Alexander P. D. Mourelatos, Ian Mueller, James Bernard Murphy, Mark C. Murphy, Steven Nadler, Jan Narveson, Alan Nelson, Jerome Neu, Samuel Newlands, Kai Nielsen, Ilkka Niiniluoto, Carlos G. Noreña, Calvin G. Normore, David Fate Norton, Nikolaj Nottelmann, Donald Nute, David S. Oderberg, Steve Odin, Michael O’Rourke, Willard G. Oxtoby, Heinz Paetzold, George S. Pappas, Anthony J. Parel, Lydia Patton, R. P. Peerenboom, Francis Jeffry Pelletier, Adriaan T. Peperzak, Derk Pereboom, Jaroslav Peregrin, Glen Pettigrove, Philip Pettit, Edmund L. Pincoffs, Andrew Pinsent, Robert B. Pippin, Alvin Plantinga, Louis P. Pojman, Richard H. Popkin, John F. Post, Carl J. Posy, William J. Prior, Richard Purtill, Michael Quante, Philip L. Quinn, Philip L. Quinn, Elizabeth S. Radcliffe, Diana Raffman, Gerard Raulet, Stephen L. Read, Andrews Reath, Andrew Reisner, Nicholas Rescher, Henry S. Richardson, Robert C. Richardson, Thomas Ricketts, Wayne D. Riggs, Mark Roberts, Robert C. Roberts, Luke Robinson, Alexander Rosenberg, Gary Rosenkranz, Bernice Glatzer Rosenthal, Adina L. Roskies, William L. Rowe, T. M. Rudavsky, Michael Ruse, Bruce Russell, Lilly-Marlene Russow, Dan Ryder, R. M. Sainsbury, Joseph Salerno, Nathan Salmon, Wesley C. Salmon, Constantine Sandis, David H. Sanford, Marco Santambrogio, David Sapire, Ruth A. Saunders, Geoffrey Sayre-McCord, Charles Sayward, James P. Scanlan, Richard Schacht, Tamar Schapiro, Frederick F. Schmitt, Jerome B. Schneewind, Calvin O. Schrag, Alan D. Schrift, George F. Schumm, Jean-Loup Seban, David N. Sedley, Kenneth Seeskin, Krister Segerberg, Charlene Haddock Seigfried, Dennis M. Senchuk, James F. Sennett, William Lad Sessions, Stewart Shapiro, Tommie Shelby, Donald W. Sherburne, Christopher Shields, Roger A. Shiner, Sydney Shoemaker, Robert K. Shope, Kwong-loi Shun, Wilfried Sieg, A. John Simmons, Robert L. Simon, Marcus G. Singer, Georgette Sinkler, Walter Sinnott-Armstrong, Matti T. Sintonen, Lawrence Sklar, Brian Skyrms, Robert C. Sleigh, Michael Anthony Slote, Hans Sluga, Barry Smith, Michael Smith, Robin Smith, Robert Sokolowski, Robert C. Solomon, Marta Soniewicka, Philip Soper, Ernest Sosa, Nicholas Southwood, Paul Vincent Spade, T. L. S. Sprigge, Eric O. Springsted, George J. Stack, Rebecca Stangl, Jason Stanley, Florian Steinberger, Sören Stenlund, Christopher Stephens, James P. Sterba, Josef Stern, Matthias Steup, M. A. Stewart, Leopold Stubenberg, Edith Dudley Sulla, Frederick Suppe, Jere Paul Surber, David George Sussman, Sigrún Svavarsdóttir, Zeno G. Swijtink, Richard Swinburne, Charles C. Taliaferro, Robert B. Talisse, John Tasioulas, Paul Teller, Larry S. Temkin, Mark Textor, H. S. Thayer, Peter Thielke, Alan Thomas, Amie L. Thomasson, Katherine Thomson-Jones, Joshua C. Thurow, Vzalerie Tiberius, Terrence N. Tice, Paul Tidman, Mark C. Timmons, William Tolhurst, James E. Tomberlin, Rosemarie Tong, Lawrence Torcello, Kelly Trogdon, J. D. Trout, Robert E. Tully, Raimo Tuomela, John Turri, Martin M. Tweedale, Thomas Uebel, Jennifer Uleman, James Van Cleve, Harry van der Linden, Peter van Inwagen, Bryan W. Van Norden, René van Woudenberg, Donald Phillip Verene, Samantha Vice, Thomas Vinci, Donald Wayne Viney, Barbara Von Eckardt, Peter B. M. Vranas, Steven J. Wagner, William J. Wainwright, Paul E. Walker, Robert E. Wall, Craig Walton, Douglas Walton, Eric Watkins, Richard A. Watson, Michael V. Wedin, Rudolph H. Weingartner, Paul Weirich, Paul J. Weithman, Carl Wellman, Howard Wettstein, Samuel C. Wheeler, Stephen A. White, Jennifer Whiting, Edward R. Wierenga, Michael Williams, Fred Wilson, W. Kent Wilson, Kenneth P. Winkler, John F. Wippel, Jan Woleński, Allan B. Wolter, Nicholas P. Wolterstorff, Rega Wood, W. Jay Wood, Paul Woodruff, Alison Wylie, Gideon Yaffe, Takashi Yagisawa, Yutaka Yamamoto, Keith E. Yandell, Xiaomei Yang, Dean Zimmerman, Günter Zoller, Catherine Zuckert, Michael Zuckert, Jack A. Zupko (J.A.Z.)
- Edited by Robert Audi, University of Notre Dame, Indiana
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- The Cambridge Dictionary of Philosophy
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- 05 August 2015
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- 27 April 2015, pp ix-xxx
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Contributors
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- By Agoston T. Agoston, Syed Z. Ali, Mahul B. Amin, Daniel A. Arber, Pedram Argani, Sylvia L. Asa, Rebecca N. Baergen, Zubair W. Baloch, Andrew M. Bellizzi, Kurt Benirschke, Allen Burke, Kenneth B. Calder, Karen L. Chang, Rebecca D. Chernock, Wang Cheung, Thomas V. Colby, Byron P. Croker, Ronald A. DeLellis, Edward F. DiCarlo, Ralph C. Eagle, Hormoz Ehya, Brett M. Elicker, Tarik M. Elsheikh, Robert E. Fechner, Linda D. Ferrell, Melina B. Flanagan, Douglas B. Flieder, Christopher S. Foster, Lillian Gaber, Karuna Garg, Kim R. Geisinger, Ryan M. Gill, Eric F. Glassy, David J. Glembocki, Zachary D. Goodman, Robert O. Greer, David J. Grignon, Gerardo E. Guiter, Kymberly A. Gyure, Ian S. Hagemann, Michael R. Henry, Jason L. Hornick, Ralph H. Hruban, Phyllis C. Huettner, Peter A. Humphrey, Olga B. Ioffe, Edward C. Klatt, Michael J. Klein, Ernest E. Lack, James N. Lampros, Lester J. Layfield, Robin D. LeGallo, Kevin O. Leslie, James S. Lewis, Virginia A. LiVolsi, Alberto M. Marchevsky, Anne Marie McNicol, Mitra Mehrad, Elizabeth Montgomery, Cesar A. Moran, Christopher A. Moskaluk, George J. Netto, G. Petur Nielsen, Robert D. Odze, Arthur S. Patchefsky, James W. Patterson, Elizabeth N. Pavlisko, John D. Pfeifer, Celeste N. Powers, Richard A. Prayson, Anja C. Roden, Victor L. Roggli, Andrew E. Rosenberg, Sherif Said, Margie A. Scott, Raja R. Seethala, Carlie S. Sigel, Jan F. Silverman, Bruce R. Smoller, Edward B. Stelow, Nora C. J. Sun, Mark W. Teague, Satish K. Tickoo, Thomas M. Ulbright, Paul E. Wakely, Jun Wang, Lawrence M. Weiss, Mark R. Wick, Howard H. Wu, Rhonda K. Yantiss, Charles Zaloudek, Yaxia Zhang, Xiaohui Sheila Zhao
- Edited by Mark R. Wick, University of Virginia, Virginia A. LiVolsi, University of Pennsylvania School of Medicine, John D. Pfeifer, Washington University School of Medicine, St Louis, Edward B. Stelow, University of Virginia, Paul E. Wakely, Jr
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- Silverberg's Principles and Practice of Surgical Pathology and Cytopathology
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- 26 March 2015, pp vii-x
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7 - Entrepreneurship and the nature and boundaries of the firm
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 05 June 2012
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- 01 March 2012, pp 163-187
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Summary
In the previous chapter we discussed a number of currents in the modern theory of the firm, explaining why they struggle to come to terms with the entrepreneurship phenomenon. In this and the next chapter we rely more constructively on select insights from these theories to piece together a theory of the entrepreneurial firm. We organize our discussion around the three classic themes in the theory of the firm: existence (or emergence), boundaries, and internal organization. The present chapter deals with existence and boundaries.
Coase (1937) explained the firm as a means for economizing on transaction costs, a theme elaborated by Williamson (1975, 1985, 1996). Alchian and Demsetz (1972) viewed the firm as an (albeit imperfect) solution to the free-rider problem in team production (see also Holmström, 1982), and agency theorists have subsequently provided important contributions to the understanding of contracts within the firm (e.g., Holmström and Milgrom, 1991; Roberts, 2004). The “new” property-rights approach of Oliver Hart and his colleagues and students adopted the emphasis on specific assets and investments of Klein et al. (1978) and Williamson (1985) and gave it a new twist by showing how incentives to invest in relationship-specific assets vary with ownership arrangements (Grossman and Hart, 1986; Hart and Moore, 1990). Resource-based theories emphasize the need to generate and internalize tacit knowledge, and while they are mainly theories of firm performance (financial-market returns, innovation, etc.), they do have implications for economic organization (Kogut and Zander, 1992; Langlois and Robertson, 1995; Conner and Prahalad, 1996).
Organizing Entrepreneurial Judgment
- A New Approach to the Firm
- Nicolai J. Foss, Peter G. Klein
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- 05 June 2012
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- 01 March 2012
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Entrepreneurship, long neglected by economists and management scholars, has made a dramatic comeback in the last two decades, not only among academic economists and management scholars, but also among policymakers, educators and practitioners. Likewise, the economic theory of the firm, building on Ronald Coase's (1937) seminal analysis, has become an increasingly important field in economics and management. Despite this resurgence, there is still little connection between the entrepreneurship literature and the literature on the firm, both in academia and in management practice. This book fills this gap by proposing and developing an entrepreneurial theory of the firm that focuses on the connections between entrepreneurship and management. Drawing on insights from Austrian economics, it describes entrepreneurship as judgmental decision made under uncertainty, showing how judgment is the driving force of the market economy and the key to understanding firm performance and organization.
Contents
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 01 March 2012, pp v-vi
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Frontmatter
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 01 March 2012, pp i-iv
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Preface
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 01 March 2012, pp ix-xii
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Preface
Entrepreneurship, long neglected by economists and management scholars, has made a dramatic comeback in the last two decades. As the economic theory of the firm flourished following the rediscovery and reworking in the 1970s of Coase’s path-breaking “The Nature of the Firm” (1937), the new field of “strategic entrepreneurship” has also begun to take off, along with a parallel rebirth of entrepreneurship studies in economic growth and development, sociology, and anthropology.
As management and organizations researchers with a particular and decade-long interest in entrepreneurship, we obviously welcome all these new developments, just as we have been heavily influenced by modern work on the theory of the firm. And yet, we think both sets of literature have missed important insights from the other. This book is written to fill the gap, proposing and developing an entrepreneurial theory of the firm that focuses on the links between entrepreneurship and management.
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- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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2 - What is entrepreneurship?
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 01 March 2012, pp 23-42
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Entrepreneurship is one of the fastest-growing subfields in management research, and is increasingly appearing in economics, sociology, anthropology, finance, and even law. Entrepreneurship became a Division (specialized interest group) within the Academy of Management in 1987 and now has its own subject code (L26) in the Journal of Economic Literature classification scheme. Research and policy organizations such as the World Bank, the US Federal Reserve System, the European Commission, the United Nation’s FAO, the OECD, agencies involved in agricultural and rural development, and others show a growing interest in studying and encouraging entrepreneurship. The Kauffman Foundation has substantially increased its funding for data collection, academic research, and education on entrepreneurship.
Entrepreneurship is also becoming one of the most popular subjects at colleges and universities (Gartner and Vesper, 1999; Solomon, Duffy, and Tarabishy, 2002). Entrepreneurship courses, programs, and activities are emerging not only in schools of business, but throughout the curriculum. In 2008 US colleges and universities offered over 2,200 entrepreneurship courses at over 2,000 schools (Cone, 2008), over 600 schools offered majors in entrepreneurship, and an additional 400 with concentrations in entrepreneurship (Kuratko, 2008). The number of Ph.D. programs conferring degrees in entrepreneurship has also increased in the last 20 years (Katz, 2007) and the number of refereed academic entrepreneurship journals have risen in impact factor ratings among peer-reviewed management journals (Gatewood and Shaver, 2009). While the field remains a minority specialization among business school faculties (Katz, 2003), during the 1990s the number of entrepreneurship positions increased by over 250 percent and the number of candidates nearly doubled (Finkle and Deeds, 2001). Besides the usual business school offerings, courses in Social Entrepreneurship, Family Business Management, Technical Entrepreneurship, Performing Arts Entrepreneurship, and the like are popping up in colleges of arts and sciences, engineering, education, social work, and even fine arts.
References
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- 01 March 2012, pp 250-292
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1 - The need for an entrepreneurial theory of the firm
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 05 June 2012
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- 01 March 2012, pp 1-22
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The theory of entrepreneurship and the theory of the firm should be treated together. And yet, the important connections between these two bodies of literature have been largely overlooked. This is our book’s basic motivation.
How, then, are entrepreneurs and firms connected? Do entrepreneurs need business firms to carry out their function? Or, do firms need entrepreneurs to survive in the competitive market process? And if there is a role for the entrepreneur in the firm, what is it, exactly? Where in the firm does entrepreneurial activity mainly take place? How does the organization of the firm influence entrepreneurial actions? Are business firms run by entrepreneurs, or rather by hired managers? How does firm organization (e.g., the allocation of residual income and control rights) affect the quantity and quality of entrepreneurial ideas? Can entrepreneurship be a property of a managerial team – or is it strictly an individual phenomenon?
8 - Internal organization: original and derived judgment
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 05 June 2012
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- 01 March 2012, pp 188-220
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The entrepreneurship literature in economics and management is biased towards start-up firms. And yet, profit opportunities are imagined, evaluated, and captured by existing firms. Employees often play a key role for developing and pursuing business opportunities (Baumol, 1994; Bhardwaj, Camillus, and Hounshell 2006). In fact, modern firms increasingly encourage “intrapreneurship,” “autonomous strategic initiatives,” and “corporate venturing” at all levels of the organization (e.g., Day and Wendler, 1998; Yonekura and Lynskey, 2002; Covin and Miles, 2007; De Clercq, Castaner, and Belausteguigoitia 2007). Clayton Christensen’s Innovator’s Dilemma (1997), one of the most influential business books of the last two decades, deals with the difficulties facing established firms that try to innovate.
To foster entrepreneurial attitudes and behavior, managers must give employees significant discretion. The need for such entrepreneurial attitudes is partly driven by deep-seated changes, sometimes placed under the rubric of the “knowledge economy” (Foss, 2005). Thus, greater variability in the environments firms confront, more emphasis on innovation as a competitive tool, an increased need to source heterogeneous knowledge inputs, and so on call for an increased reliance on decision-making within firms that is not only fast, but also adaptive and intelligent. This amounts to an increase of delegation of discretion to employees at all levels in order to make them exercise responsible judgment. Cowen and Parker (1997: 28) cogently summarize this line of thinking:
Market changes are moving manufacturing farther and farther away from steady-state, low variety, long-batch production runs, relevant to Taylorist methods, to high variety and small runs … Organizations are adopting new forms of decentralization to cope with the instability, uncertainty, and pace of change of the market-place … In clusters of network working, employees of undifferentiated rank may operate temporarily on a certain task or tasks in teams. The clusters are largely autonomous and engage in decentralized decision-making and planning … They are conducive to individual initiative (“intrapreneurship”) and faster decision-taking. They facilitate organizational flexibility.
4 - What is judgment?
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Organizing Entrepreneurial Judgment
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- 01 March 2012, pp 78-104
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Summary
As we argued in the previous chapter, the key construct that links entrepreneurship and the theory of the firm is entrepreneurial judgment. But what is judgment, exactly? So far we have treated judgment in a highly formal and abstract way, as that which generates profit and loss. Here we are consistent with other approaches to the entrepreneurial function: Schumpeter takes entrepreneurship to be that which generates economic growth, while Kirzner treats it as that which causes markets to equilibrate. In all of these cases, entrepreneurship itself is largely a black box; it is invoked, instrumentally, to explain a particular set of phenomena.
Judgment, to be more specific, is residual, controlling decision- making about resources deployed to achieve some objectives; it is manifest in the actions of individual entrepreneurs; and it cannot be bought and sold on the market, such that its exercise requires the entrepreneur to own and control a firm. To simplify, we have collapsed into this notion the acts of creating and evaluating opportunities, and deciding on which resources need to be assembled, how they need to be combined, etc. to realize the opportunity. We have made the point that judgment is a meaningful notion of decision-making that is intermediate between decision-making via formalizable rules and pure luck or random behaviour (see Casson, 1982). It is the kind of decision-making that concerns unique business investments for which it is difficult, or even impossible, to assign meaningful probabilities to outcomes, or even to specify the set of possible outcomes itself (Shackle, 1972; Zeckhauser, 2006). When confronted with such a situation, individuals will reach different decisions, even if they share the same objectives and the data are presented to them in exactly the same manner, because they have access to different information, interpret the data in different ways, and so on (Lachmann, 1977; Casson and Wadeson, 2007). In Bayesian terms, priors are diffuse, and updating rules may differ.
5 - From shmoo to heterogeneous capital
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Book:
- Organizing Entrepreneurial Judgment
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- 05 June 2012
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- 01 March 2012, pp 105-130
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Summary
In the preceding chapters we have highlighted the entrepreneurial function, arguing that the entrepreneurship literature needs to go beyond its current preoccupation with the discovery and evaluation of opportunities, and consider more fully the exploitation of these opportunities through resource ownership and control. The judgment view explicitly highlights this aspect of entrepreneurship, and therefore points to the role of the entrepreneur as an investor, an owner with skin in the game. But we have not yet explored the context in which judgmental decision-making takes place. Some perspectives in entrepreneurship research – notably network perspectives (Greve, 2003; Hoang and Antoncic, 2003; Sorenson and Stuart, 2005) and the effectuation view (Sarasvathy, 2008) – strongly emphasize the contextual aspects of entrepreneurship, albeit in very different ways.
In the previous chapter we discussed the epistemological and ontological contexts of judgment as seen by Knight (1921) and Mises (1949). However, we said little about the more concrete contexts, those of markets for inputs and outputs, and even inputs and outputs themselves. In this chapter we argue that the judgment view is naturally aligned with a specific view of capital, one that is often associated with the Austrian school of economics, but also has a strong similarity to certain key perspectives in modern management research, notably the resource-based view of strategy and, to some extent, transaction-cost economics. These perspectives highlight the heterogeneity of capital assets, the benefits of combining them in complementary bundles that generate competitive advantage, and the hazards associated with investments in assets that depend on particular exchange relationships to maintain their value.
6 - Entrepreneurship and the economic theory of the firm
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Book:
- Organizing Entrepreneurial Judgment
- Published online:
- 05 June 2012
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- 01 March 2012, pp 131-162
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Summary
In Knight’s (1921) view, firm organization, profit and loss, and entrepreneurship are inextricably linked. These phenomena arise as an embodiment, a result, and a cause, respectively, of commercial experimentation – a view founded on a particular ontology of the world as essentially open-ended and not deterministic (1921: chapter 7). Few economists have followed Knight in linking the firm, profit and loss, and entrepreneurship, especially from his philosophical starting points. And yet, as we noted in the beginning of this book, there are many good reasons to treat the theory of entrepreneurship and the theory of the firm together. Such a synthesis informs many foundational questions in economics, business strategy, and public policy: Can we meaningfully address entrepreneurship without considering the organization in which such entrepreneurship takes place? How does the structure of the firm influence entrepreneurial actions? How does firm organization (e.g., the allocation of residual income and control rights) affect the quantity and quality of entrepreneurial ideas? And so on. To answer these, we need to bring the theory of the firm and entrepreneurship literatures into close contact. And yet, the important connections between these two bodies of literature have been largely overlooked. We seek to identify and establish some of those connections in this and the next two chapters.
In bringing together entrepreneurship and the theory of the firm we hope to convince scholars in both fields that there are significant gains from trade. We start by reviewing extant theory of the firm, asking why these gains were not recognized, evaluated, and exploited. Economics, and hence the economic theory of the firm, developed throughout the twentieth century in a particular way, one that effectively excluded the entrepreneur from the organization and the market – not because the insights of Schumpeter, Knight, Mises, and other thinkers on entrepreneurship are unimportant or not subject to clear, precise, systematic presentation and development, but because the increasingly formal and stylized treatment of economic phenomena made it difficult to incorporate judgment and creativity, bounded rationality, unforeseen contingencies, and so on.
9 - Concluding discussion
- Nicolai J. Foss, Copenhagen Business School, Peter G. Klein, University of Missouri, Columbia
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- Book:
- Organizing Entrepreneurial Judgment
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- 05 June 2012
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- 01 March 2012, pp 221-249
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Summary
Introduction
The preceding chapters have outlined an entrepreneurial theory of the firm built upon Knightian uncertainty and Austrian capital theory. The theory regards entrepreneurship as an active, owning, controlling agency, the function of assembling, configuring, and reconfiguring bundles of heterogeneous resources under conditions of “true” uncertainty, with strong implications for our understanding of the nature, emergence and boundaries of the firm. It also shows how entrepreneurial judgment about resources is distributed throughout the multi-person firm, as the owner’s original judgment is shared with employees who exercise derived judgment on the owner’s behalf.
This notion of the entrepreneurial firm is implicit in some of the earliest systematic treatments of economic problems, including Cantillon’s (1755) landmark essay, was incorporated by some Classical and Austrian economists, but gradually fell out of favour, losing out to the stylized abstraction of the neoclassical “firm,” a production function that is analytically tractable but descriptively vacuous and silent on the key problems of economic organization and entrepreneurship. The transaction cost, agency-theoretic, property-rights, resource-based, and capabilities theories of the firm that emerged in the 1970s, 1980s, and 1990s breathed new life into the theory of the firm, explicating many important problems of firm behavior and performance, but even these did not bring the entrepreneur back into the story. Likewise, entrepreneurship studies became established as a separate field, focusing on start-ups, small-business management, and innovation, but the entrepreneur remained absent from other, mundane topics in economics and management.