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Firms as Realizations of Entrepreneurial Visions

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  • U. Witt

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Abstract

In the debate on why firms exist, the question of who chooses between firms and markets and on what basis is rarely addressed. This paper argues that the choice is a core element of the entrepreneurial pursuit of visions or conceptions of business opportunities. To successfully organize resources into the envisioned businesses – be it via firms or markets – resource owners must be coordinated on the entrepreneur’s conception of the business and be motivated to perform properly. To solve the dual problem, the organizational form of the firm offers the entrepreneur unique advantages not feasible under the organizational form of markets.

Suggested Citation

  • U. Witt, 2005. "Firms as Realizations of Entrepreneurial Visions," Papers on Economics and Evolution 2005-10, Philipps University Marburg, Department of Geography.
  • Handle: RePEc:esi:evopap:2005-10
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    References listed on IDEAS

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    1. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
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    12. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
    13. U. Witt, 2003. "The Proper Interpretation of 'Evolution' in Economics and the Example of Production Theory," Papers on Economics and Evolution 2003-05, Philipps University Marburg, Department of Geography.
    14. Busenitz, Lowell W. & Barney, Jay B., 1997. "Differences between entrepreneurs and managers in large organizations: Biases and heuristics in strategic decision-making," Journal of Business Venturing, Elsevier, vol. 12(1), pages 9-30, January.
    15. Langlois, Richard N, 1998. "Personal Capitalism as Charismatic Authority: The Organizational Economics of a Weberian Concept," Industrial and Corporate Change, Oxford University Press, vol. 7(1), pages 195-213, March.
    16. Baron, Robert A., 1998. "Cognitive mechanisms in entrepreneurship: why and when enterpreneurs think differently than other people," Journal of Business Venturing, Elsevier, vol. 13(4), pages 275-294, July.
    17. U. Witt & C. Zellner, 2005. "Knowledge-based Entrepreneurship: The Organizational Side of Technology Commercialization," Papers on Economics and Evolution 2005-04, Philipps University Marburg, Department of Geography.
    18. Witt, Ulrich, 2000. "Changing Cognitive Frames--Changing Organizational Forms: An Entrepreneurial Theory of Organizational Development," Industrial and Corporate Change, Oxford University Press, vol. 9(4), pages 733-755, December.
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    Cited by:

    1. Christian Cordes & Peter J. Richerson & Richard McElreath & Pontus Strimling, 2006. "How Does Opportunistic Behavior Influence Firm Size?," Papers on Economics and Evolution 2006-18, Philipps University Marburg, Department of Geography.
    2. Cordes, Christian & Richerson, Peter J. & Schwesinger, Georg, 2010. "How corporate cultures coevolve with the business environment: The case of firm growth crises and industry evolution," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 465-480, December.
    3. Christian Cordes & Peter Richerson & Georg Schwesinger, 2014. "A corporation’s culture as an impetus for spinoffs and a driving force of industry evolution," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 689-712, July.
    4. Michael J. Mannor & Jamal Shamsie & Donald E. Conlon, 2016. "Does experience help or hinder top managers? Working with different types of resources in Hollywood," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1330-1340, July.
    5. Bartz, Wiebke & Winkler, Adalbert, 2016. "Flexible or fragile? The growth performance of small and young businesses during the global financial crisis — Evidence from Germany," Journal of Business Venturing, Elsevier, vol. 31(2), pages 196-215.
    6. 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.
    7. Nir Kshetri, 2009. "Entrepreneurship in post-socialist economies: A typology and institutional contexts for market entrepreneurship," Journal of International Entrepreneurship, Springer, vol. 7(3), pages 236-259, September.
    8. Bettiol, M & Di Maria, E & Finotto, Vladi, 2012. "Marketing in smes: the role of entrepreneurial sensemaking," MPRA Paper 39405, University Library of Munich, Germany.
    9. Christian Cordes & Tong-Yaa Su & Pontus Strimling, 2015. "Going Through a Crisis: Firm Devekopment and Firm SIze Distributions," Papers on Economics and Evolution 2015-06, Philipps University Marburg, Department of Geography.
    10. Berg, Nathan, 2014. "Success from satisficing and imitation: Entrepreneurs' location choice and implications of heuristics for local economic development," Journal of Business Research, Elsevier, vol. 67(8), pages 1700-1709.
    11. J. Michael Haynie & Dean A. Shepherd & Jeffery S. McMullen, 2009. "An Opportunity for Me? The Role of Resources in Opportunity Evaluation Decisions," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 337-361, May.
    12. Lin, Hai-Fen & Su, Jing-Qin & Higgins, Angela, 2016. "How dynamic capabilities affect adoption of management innovations," Journal of Business Research, Elsevier, vol. 69(2), pages 862-876.
    13. Cordes, Christian & Richerson, Peter J. & McElreath, Richard & Strimling, Pontus, 2008. "A naturalistic approach to the theory of the firm: The role of cooperation and cultural evolution," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 125-139, October.
    14. 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.
    15. 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.
    16. repec:wsi:jdexxx:v:22:y:2017:i:02:n:s1084946717500145 is not listed on IDEAS
    17. Richard Arena, 2017. "Schumpeter and Schumpeterians on competition: some policy implications," Journal of Evolutionary Economics, Springer, vol. 27(1), pages 161-186, January.
    18. Jones, Geoffrey & Pitelis, Christos, 2015. "Entrepreneurial Imagination and a Demand and Supply-side Perspective on the MNE and Cross-border Organization," Journal of International Management, Elsevier, vol. 21(4), pages 309-321.
    19. Murmann Johann Peter & Korn Jenny & Worch Hagen, 2014. "How Fast Can Firms Grow?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(2-3), pages 210-233, April.
    20. Sandra Waddock & Erica Steckler, 2016. "Visionaries and Wayfinders: Deliberate and Emergent Pathways to Vision in Social Entrepreneurship," Journal of Business Ethics, Springer, vol. 133(4), pages 719-734, February.
    21. Tomi Laamanen & Johan Wallin, 2009. "Cognitive Dynamics of Capability Development Paths," Journal of Management Studies, Wiley Blackwell, vol. 46(6), pages 950-981, September.
    22. Kraaijenbrink, Jeroen & Spender, JC & Groen, Aard, 2009. "The resource-based view: A review and assessment of its critiques," MPRA Paper 21442, University Library of Munich, Germany.
    23. 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.
    24. Christian Cordes, 2014. "There are several ways to incorporate evolutionary concepts into economic thinking," Papers on Economics and Evolution 2014-02, Philipps University Marburg, Department of Geography.

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