Conceptual History of Entrepreneurship

Imagination is more important than knowledge (Einstein)

The concept of entrepreneurship has been around as long as man has existed. Its serious study and documentation, however, has been around only a couple hundred years, and the field of entrepreneurship studies has only been seriously coalescing over the last 50 (for instance, there were only a handful of academic programs focused on entrepreneurship as late as the mid 1970’s). Entrepreneurial training, implementation, and study as a field of management have just burgeoned over the last 30 years. Thus, entrepreneurship has only recently been codified as a unique type of management that is worthy of separate, systemic analysis, which is based on unique principles, which can be logically and clearly modeled. The field has come a long way, and is accelerating in accumulating knowledge that is valid and useful.

Throughout the history of the study of entrepreneurship, three interrelated and timeless questions have challenged entrepreneurship writers, researchers and practitioners: What defines of entrepreneurship? What causes it? What effect does it have? As you peruse history in this chapter, realize that for centuries, these three interrelated questions have formed the basis of different perspectives and assumptions about the character, value and implementation of entrepreneurship in societies. Another important set of contradictions in the literatures arise from the posturing toward one of two basic causation orientations, the person-centered point of view and the environment-centered point of view. Which set of forces are assumed to be most important to producing entrepreneurial outcomes is pivotal to developing and understanding systematic perspective, and determine how we imagine the style is capable of leading to organized outcomes and states of nature that are profitable and virtuous. As I take you through some of the history and literature, keep these three questions and two views in mind. They bear heavily on imagining how market systems change and are stable, and how the entrepreneurial style fits into managing our economic world. As you study the historical material I’ve assembled, imagine how entrepreneurial events and organizations are conceptually elusive, arising for the abstractness of individual personalities and intentions versus the compelling forces of opportunity and threat in the environment. I predict that you will find this is heady stuff to imagine.

The person versus environment controversy, by the way, is the most dicey to deal with conceptually and logically, because it involves extremely abstract interrelationships. Both the person and environment are important to fresh thought. Being too one-sided, as some theorists tend to become, confounds the truth in progressive organizational systems. But this polarization process is common in the theory of social sciences, because it helps clarify theory when it is positioned at the extremes of social forces. Variables that have quite different polar extremes can be more richly studied at the extremes than at the middle. Thus, science and orientation can form more readily at the extremes. For instance, take the study of leadership behavior, which is perhaps the most intensively studied management behavior over the last 50 years. There have been tens of thousands of studies done on leadership, and billions of words written about it in an attempt to objectify how leaders succeed. Much debate has emerged over which style works best in which situations. Ultimately this debate centers again on the person versus the environment dilemma. Again, advocates tend to form at the extremes. Fielder (196?), in his famous contingency studies, found a person’s leadership style to be enduring, even when situations were quite dynamic and called for other styles. He, thus, proposed fitting the job to the person, because the inflexible leader can’t adjust to changes in setting and conditions. My guess is that Fiedler would similarly hypothesize that entrepreneurs are pretty much inflexible in their management style and only prosper in the right setting (e.g., the start-up). It’s important to note that Fielder’s person-centered perspective assumes that leaders and environments are naturally occurring and in equilibrium. Others, like Blake and Mouton, made a business out of training leaders and take the opposite view. They assume that we can train the person can be trained (the leader or the entrepreneur) to handle any situation. Such a view takes an opposite perspective and assumes leaders can learn to fit their behavior to the job by modifying conditions and their own intentional behavior. Who’s right? Well, everyone is, and that’s a problem, regardless of the managerial behavior we choose to study or discuss. So, these fundamental causation issues are not unique to the study of entrepreneurship; they are basic to all social phenomena like management.