Entrepreneurship

Entrepreneurship

Theory, Networks, History

Mark Casson

In this important new book, Mark Casson argues that the fundamental significance of entrepreneurship requires it be fully integrated into core social science disciplines such as economics and sociology, as well as into economic and business history. This book shows how this can be done. It formalises the role of the entrepreneur as innovator, risk-taker and judgemental decision-maker, and relates these functions to the size and growth of the firm. Mark Casson discusses entrepreneurship as a form of strategic networking, showing how entrepreneurs gain access to established networks in order to source information, and then create their own networks to exploit this information. Applying these insights to historical evidence leads to a radical re-interpretation of key issues in economic and business history, including the emergence of trading companies, the spread of empires, the rise of the modern corporation and the globalisation of the firm.

Chapter 9: Entrepreneurship and Vertical Integration: The Origins of the Singer Global Distribution System with Andrew Godley

Andrew Godley and Teresa da Silva Lopes

Subjects: business and management, entrepreneurship, economics and finance, economics of entrepreneurship

Extract

The emergence of the modern industrial enterprise towards the end of the nineteenth century was associated with the innovation of new managerial methods. It also involved a significant extension of the boundaries of the firm through horizontal and vertical integration. As Schumpeter (1934, 1939) emphasized, such institutional innovations are essentially entrepreneurial. Unfortunately, however, these changes are often analysed as if they were largely routine. They are seen as a consequence of managerialism rather than of entrepreneurialism, and their origins have consequently been misunderstood. This chapter uses the theory developed in the previous chapters to put the historical record straight. It reinterprets the rise of the modern corporation by focusing on the case study of vertical integration par excellence, Singer sewing machines. 9.1 INTRODUCTION The dramatic changes in technology and the global spread of market activity during the second half of the twentieth century were associated with equally dramatic changes in the structure of firms. The dominant corporations that emerged during this ‘second industrial revolution’ were giant, multidivisional, bureaucratic organizations. While powerful for many decades, their structures were later revealed to be inefficient and uncompetitive in what the renowned business historian, Lou Galambos, has called the ‘third industrial revolution’ at the turn of the twenty-first century (Galambos, 2005). Rather it is flexible and dynamic entrepreneurial firms that are competitive today. This transformation of firms and industries is, in historical terms, indeed revolutionary. It has been simplified as a paradigm shift from the big, bureaucratic firms dominant in the second industrial revolution...

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