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Discovery and Creation: Alternative Theories of Entrepreneurial Action

47 Pages Posted: 9 May 2006  

Sharon Alvarez

University of Pittsburgh - Katz Graduate School of Business

Jay B. Barney

Ohio State University (OSU) - Human Resource Research

Date Written: May 2006

Abstract

Two theories of entrepreneurial action - Discovery Theory and Creation Theory - are discussed. While Discovery Theory and its assumptions have been addressed in the literature, neither the assumptions of Creation Theory nor how they are related to the assumptions of Discovery Theory have yet been discussed. The empirical implications of these two theories for research on entrepreneurial action, generally, and for three specific entrepreneurial actions - entrepreneurial decision making, business planning, and new venture financing - in particular, are then discussed. It is shown that these two theories will often make contradictory predictions about the effects of entrepreneurial actions on the ability of entrepreneurs to produce new products or services.

Keywords: Entrepreneurial Action, Risk, Ambiguity, Entrepreneurial Decision Making

Suggested Citation

Alvarez, Sharon and Barney, Jay B., Discovery and Creation: Alternative Theories of Entrepreneurial Action (May 2006). Fisher College of Business Working Paper No. 2006-01-005. Available at SSRN: https://ssrn.com/abstract=900200 or http://dx.doi.org/10.2139/ssrn.900200

Sharon Alvarez (Contact Author)

University of Pittsburgh - Katz Graduate School of Business ( email )

Pittsburgh, PA 15260
United States

Jay Barney

Ohio State University (OSU) - Human Resource Research ( email )

700 Fisher Hall
2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-688-3161 (Phone)

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