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Do You See What I Mean? An Entrepreneurship Perspective on the Nature and Boundaries of the Firm

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  • Ivo Zander

Abstract

In answering the questions 'why does the firm exist?' and 'what determines its boundaries?', established theories of the firm have focused on boundary choice in a context of relatively easily identified and evaluated alternatives. This paper starts by asking the kindred question 'why does the firm come into existence?', shifting attention to the circumstances and choices surrounding new firm formation and the exploitation of new and untried business ideas. It proceeds to delineate an entrepreneurship perspective on the nature and boundaries of the firm, where boundary decisions are driven by the difficulty of implementing new, subjective means-ends frameworks in sometimes very unreceptive markets. A set of propositions developing the concepts of cognitive incongruence and cognitive incompleteness suggests that activities are internalized when other market participants are unable to accept or understand the entrepreneur's subjectively perceived means-ends framework. In conclusion, the paper supports the development of theory that explains choice of modes of action based on subjective world views and the emerging notion of a distinctive entrepreneurship-based theory of the firm. Copyright Blackwell Publishing Ltd 2007.

Suggested Citation

  • Ivo Zander, 2007. "Do You See What I Mean? An Entrepreneurship Perspective on the Nature and Boundaries of the Firm," Journal of Management Studies, Wiley Blackwell, vol. 44(7), pages 1141-1164, November.
  • Handle: RePEc:bla:jomstd:v:44:y:2007:i:7:p:1141-1164
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    References listed on IDEAS

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    1. Lisa Hope Pelled, 1999. "Demographic Dissimilarity and Workplace Inclusion," Journal of Management Studies, Wiley Blackwell, vol. 36(7), pages 1013-1031, December.
    2. Deborah Gladstein Ancona & David F. Caldwell, 1992. "Demography and Design: Predictors of New Product Team Performance," Organization Science, INFORMS, vol. 3(3), pages 321-341, August.
    3. Lisa Hope Pelled, 1996. "Demographic Diversity, Conflict, and Work Group Outcomes: An Intervening Process Theory," Organization Science, INFORMS, vol. 7(6), pages 615-631, December.
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    Cited by:

    1. Anna Grandori, 2013. "Models of rationality in economic organization: ‘economic’, ‘experiential’ and ‘epistemic’," Chapters,in: Handbook of Economic Organization, chapter 1 Edward Elgar Publishing.
    2. Tuija Mainela & Vesa Puhakka & Per Servais, 2015. "Boundary crossing for international opportunities," Journal of International Entrepreneurship, Springer, vol. 13(3), pages 173-185, September.
    3. Lerner, Daniel A., 2016. "Behavioral disinhibition and nascent venturing: Relevance and initial effects on potential resource providers," Journal of Business Venturing, Elsevier, vol. 31(2), pages 234-252.
    4. Giovanni Favero & Vladi Finotto & Anna Moretti, 2016. "Historicizing Entrepreneurial Imprinting: Sensitive Periods, Cognitive Frames and Resistance," Working Papers 10, Department of Management, Università Ca' Foscari Venezia.
    5. Thomas Hutzschenreuter & Florian Gröne, 2009. "Changing Vertical Integration Strategies under Pressure from Foreign Competition: The Case of US and German Multinationals," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 269-307, March.
    6. Thierry BURGER-HELMCHEN, 2008. "Plural-entrepreneurial activity for a single start-up: a case study," Working Papers of BETA 2008-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    7. Storchevoy, Maxim A., 2010. "A general theory of the firm: From Knight to relationship marketing," Working Papers 765, Graduate School of Management, St. Petersburg State University.
    8. Daniel A. Lerner & Richard A. Hunt & Ingrid Verheul, 2017. "Dueling Banjos: Harmony and Discord between ADHD and Entrepreneurship," Working Papers 2017-07, Colorado School of Mines, Division of Economics and Business.
    9. Ljungquist, Urban & Ghannad, Navid, 2012. "Obstacles and Facilitators of Developments in Entrepreneur-driven Firms," Working Papers 2012/01, Blekinge Institute of Technology, Department of Industrial Economics.
    10. Desirée Blankenburg Holm & Martin Johanson & Pao Kao, 2015. "From outsider to insider: Opportunity development in foreign market networks," Journal of International Entrepreneurship, Springer, vol. 13(3), pages 337-359, September.
    11. Tomi Laamanen & Johan Wallin, 2009. "Cognitive Dynamics of Capability Development Paths," Journal of Management Studies, Wiley Blackwell, vol. 46(6), pages 950-981, September.
    12. Vladi Finotto & Anna Moretti, 2014. "Unveiling the founder effect: a conceptual framework of entrepreneurial imprinting," Working Papers 07, Department of Management, Università Ca' Foscari Venezia.

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