Entrepreneurship and the theory of the firm

A missing component of several leading theories of the firm, entrepreneurship is key to the growth and survival of firms in a volatile environment, because entrepreneurial judgement is necessary for success in making complex decisions under uncertainty. The addition of entrepreneurship is not a minor refinement of the theory of the firm, but represents a radical change. The paper summarises the principle changes. It suggests that the introduction of entrepreneurship can facilitate the development of an integrated synthetic theory of the firm. (c) 2005 Elsevier B.V. All rights reserved.