On Lachmannian and Effectual Entrepreneurship: A Rejoinder to Sarasvathy and Dew (2008)

Abstract

We welcome the comments of Professors Sarasvathy and Dew (2008) on our recent article, which introduced a new paradigm for entrepreneurship research based on one of the central figures in modern Austrian economics: Ludwig Lachmann (Chiles et al. 2007). Our purpose in writing the article was (1) to bring together a wide range of disparate entrepreneurship concepts under a single new conceptual framework, and (2) to provide greater coherence and theoretical underpinnings to entrepreneurship research. In doing so, we described connections between a Lachmannian approach to entrepreneurship and numerous extant approaches, including effectuation. Sarasvathy and Dew (hereafter, S&D), in taking issue with some of our interpretations of effectuation, clarified their previous work on this approach and explicated its primary foundations. We find S&D’s discussion of the problems of knowledge, resources, and institutions provocative, and their conclusion about the basis of effectuation revealing. Our response to these arguments attempts to further clarify areas of possible confusion and suggests that the Lachmannian and effectuation approaches may share more common ground than S&D realize in some areas and less than we thought in others. In our brief response, we do not attempt to critique every point S&D make, but instead focus on what we view as their fundamental arguments.

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