Entrepreneurship

Entrepreneurs as social actors are not hermits; they do not introduce innovations to themselves or work in isolation. Although isolation has its place, individuals move from philosophical contemplation, detached observation, and laboratory invention into entrepreneurial behavior when they engage stakeholders (people who have an interest in an outcome) and build organizations. Entrepreneurship is marked by the taking of initiative through social interaction. As Schumpeter and the Physiocrats before him observed, entrepreneurs are the primary agents of change, of disruption, of disequilibrium in those social activities we call “economic” (Schumpeter, 1934). (Physiocrats were members of a school of political economists founded in eighteenth-century France and characterized by a belief that government [Page 443]policy should not interfere with the operation of natural economic laws.)

Entrepreneurs are people acting in an entrepreneurial way. That definition includes the people we normally think of—the initiators of new and growing firms—as well as people doing the same kinds of organizational functions in other sectors and roles. We give thanks for entrepreneurs in our not-for-profit sector who enrich our lives with new cultural, sports, and religious activities (Whyte and Whyte, 1991). Our lives are also enriched by corporate entrepreneurs (sometimes called “intrapreneurs”) who introduce new ideas, products, and services in large established organizations, including companies, government, and churches (Abodaher, 1982; Block and MacMillan, 1993; Green, Bush, and Hart, 1999; Hitt et al., 1999; Katzenbach et al., 1995; Pinchot, 1986; von Hippel, 1988; Welch and Byrne, 2001; Zahra, Nielsen, and Bogner, 1999).

The degrees and dimensions of entrepreneurship can vary widely (Bhidé, 1999). In some important respects the effectiveness of an entrepreneur is a measure of his or her leadership skills. During the last twenty-five years the field of entrepreneurship research has increasingly focused on the factors that increase success, differentiating strongly between the average start-up businesses that have mediocre or poor results and the “gazelles” that grow rapidly and create incremental new wealth (Birch, 1987; Huizenga and Sexton, 2001; Ireland, Hitt, Camp, and Sexton, 2001).

By nature of their roles as founders and developers of organizations, entrepreneurs are leaders (DeCarlo and Lyons, 1980). This type of leadership is most visible in three primary impact groups: suppliers of resources, employees and partners, and customers.