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Chapter 15: Entrepreneurial Issues in Competitive Strategy Research
Mario Sorrentino LINKING ENTREPRENEURSHIP AND WEALTH CREATION: THE STRATEGIC ENTREPRENEURSHIP CONCEPT One of the greatest challenges that firms have to face is that of producing wealth in the current highly uncertain, rapidly changing environment. The objective of this chapter is to analyse how being entrepreneurial can lead firms to establish competitive advantage and create wealth in the current competitive environment. This objective implies not only investigating what being entrepreneurial means, but also focussing on how entrepreneurial strategies pursued by firms can lead to competitive advantage able to produce wealth in uncertain and rapidly changing markets. In high uncertainty the probability distribution of events that are important for the firm’s decision-making process is not only unknown but unknowable (Buchanan and Vanberg, 1991), mainly due to a lack of information about cause and effect relationships (Hoskisson and Busenitz, 2002). By contrast, the rapidity of change means sudden modifications in key variables for interfirm competition and discontinuities in phenomena that affect their behaviour. In competitive contexts dominated by uncertainty and rapid change the duration of product life-cycles is reduced, as are firms’ response times to environmental pressures. In terms of competitive dynamics, uncertainty, rapid change and speed in decision-making generate conditions of hypercompetition (D’Aveni, 1994) whose main effect on organizational performance is to make competitive advantages temporary, advantages that in more stable environmental conditions would be sustainable in time. In general, in such environmental conditions it is increasingly difficult for firms to produce wealth. At the same time, however, uncertainty and rapid change...
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