Chapter 49: Strategy and Entrepreneurship
Robert T. Hamilton In Chapter 6 in this volume, Professor William Baumol explains why the entrepreneur was superfluous for the development of the neoclassical theory of the firm. In another place he has likened this to Shakespeare’s Hamlet without the character of the Prince of Denmark (Baumol, 1968). The influence of microeconomics on the development of mainstream strategic management has also helped to ensure that entrepreneurship and strategy have developed, thus far, as largely distinct constructs. They do however intersect, particularly with regard to the nature and source of opportunities. In this short review of the relationships between entrepreneurship and strategy, we adopt a similar starting point, namely, mainstream microeconomics, and show how its assumption of rational decision-making has underpinned a static model of competition and strategies that appear to have no place for entrepreneurs or entrepreneurship. We then contrast the traditional or ‘classical’ line of strategy development (Whittington, 1993) with that deriving from the Austrian School (Jacobson, 1992) in which the entrepreneur has a key role in an ongoing competitive process. This leads into a discussion of the common ground between entrepreneurship and strategy, namely, the critical role of opportunities to each construct. The chapter then develops an overview of entrepreneurship and strategy in two contexts: small owner-controlled firms and large corporations striving to become more entrepreneurial. At its conclusion the chapter notes the recent emergence of the field of ‘strategic entrepreneurship’, a development that clearly acknowledges a convergence of entrepreneurship and strategy. SOME DEFINITIONS The concepts of entrepreneurship...
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