Beyond Creative Destruction and Entrepreneurial Discovery: A Radical Austrian Approach to Entrepreneurship

Although Schumpeter's theory on `creative destruction' and Kirzner's on `entrepreneurial discovery' dominate current entrepreneurship research in organization studies, one of the most fundamental debates in modern Austrian economics is that between Kirzner and Lachmann. Using Low and MacMillan's (1988) key specifications as a rubric, we introduce organizational entrepreneurship scholars to Lachmann's work, identify the direction in which his radical subjectivist approach would lead the field, and encourage exploring important questions from, and adopting methods consistent with, his provocative perspective. This unique disequilibrium perspective, which takes into account institutional contexts and multiple levels of analysis, offers new theoretical insight into how entrepreneurs create opportunities through expectations of an imagined future and exploit opportunities through continuous resource combination and recombination. Conceptualizing time as subjective and heterogeneous, it facilitates the examination of patterns in entrepreneurial activity, especially when combined with longer time frames. And it offers hermeneutics and ideal-types as alternatives to statistical models, for developing a theoretically sophisticated understanding of how entrepreneurial processes unfold.