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.