Chapter 4: Environmental Uncertainty and Firm-level Entrepreneurship
Lou Marino, Patrick Kreiser and Anthony Robinson INTRODUCTION The concept of uncertainty has maintained a central position in the study of entrepreneurship since Cantillon first coined the term ‘entrepreneur’ in his Essai sur la nature du commerce en general (Essay on the Nature of Commerce in General, published 1755). In this work, Cantillon described an entrepreneur as a risk-taker who bears uncertainty in buying a fixed quantity of goods for a certain price with the intention of selling these goods at a future date in markets that have a demand and price levels that are indeterminate at the time the resources are acquired. Knight (1921) reinforced the fundamental relationship between entrepreneurship and uncertainty in his book Risk, Uncertainty and Profit. In this work, Knight clearly delineated between risk and uncertainty, and argued that entrepreneurs are economic actors, who earn profit from bearing uncertainty. Acknowledging the key role that uncertainty plays in entrepreneurship, numerous researchers have examined the relationship between uncertainty and a wide variety of antecedents and consequences of entrepreneurial activities. Studies that have examined the impact of uncertainty in the entrepreneurship literature include research on varied topics such as the impact of environmental hostility on the relationship between corporate entrepreneurship and firm performance (Zahra and Garvis, 2000), the role of technological uncertainty on technology alliance formation in entrepreneurial firms (Steensma et al., 2000), the impact of environmental dynamism on the relationship between entrepreneurial leadership and new venture performance (Ensley et al., 2006), the relationship between environmental dynamism, entrepreneurial orientation...
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