Chapter 2: Schumpeter’s theories of organizational entrepreneurship
While Schumpeter is a classic in the literature on entrepreneurship, he is less often discussed in organizational analysis. The reason for this is simple. Before the great breakthrough in organizational studies that came after World War II, practically no economist of stature focused on the organization of the firm. This is also true for Schumpeter. Why then discuss Schumpeter in a handbook of organizational entrepreneurship? The answer is that Schumpeter did develop a very powerful theory of entrepreneurship; and one may legitimately ask if it cannot also be extended to the topic of organizations. Add to this that Schumpeter does make occasional and evocative remarks on the organization of the firm in his work; and we have two good reasons for including a chapter on Schumpeter in a handbook of organizational entrepreneurship. In my view, it is possible to take all of Schumpeter’s comments on the ways of organizing the firm, piece these together and present them as ‘Schumpeter’s theory of organizational entrepreneurship’. This is not what I will do in this chapter, however. As I see it, Schumpeter’s view on organizations and organizational entrepreneurship shifted in emphasis as his work developed – from his classical book on entrepreneurship, Theory of Economic Development (1911), over Business Cycles (1939), to Capitalism, Socialism and Democracy (1942). To bring out the richness in Schumpeter’s ideas, I will therefore present what he has to say in each of these works.
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