In an excellent recent paper on Ludwig Lachmann's contributions to entrepreneurship, Chiles, Bluedorn and Gupta draw parallels between Lachmann's work and later contributions in the entrepreneurship literature, including Sarasvathy (2001), suggesting that, 'Sarasvathy's economic approach to entrepreneurship is decidedly Lachmannian' (Chiles et al. 2007: 487). Our purpose in responding to the Chiles et al. article is twofold. First, our interpretation about how effectuation works differs in certain ways from the interpretations placed on it by these authors; we therefore wish to clarify our views on these matters. Second, we view the relationship between effectuation and Lachmann's perspective on entrepreneurship somewhat differently than Chiles et al.; in this note we lay out this alternative view. The crux of our presentation is that, although Lachmann and Sarasvathy have much the same starting point (entrepreneurial action in the face of true uncertainty) and several overlaps in terms of the overall implications for dominant economic theories, there are crucial differences that draw upon recent developments in our understanding of how the human mind works and what knowledge is constituted of.

In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial innovation has also meant losses and hardships for some members of society: it is destructive of some stakeholders' wellbeing even as it creates new wellbeing among other stakeholders. Both the positive benefits and negative externalities of innovation are problematic because entrepreneurs initiate new ventures before their private profitability and/or social costs can be fully recognized. In this paper we consider three analytical frameworks within which these issues might be examined: pre-commitments, contractarianism, and an entrepreneurial framework. We conclude that the intersection of stakeholder theory and entrepreneurial innovation is a potentially rich arena for research.

The term "emerging domestic markets" (EDM) has generated considerable practical and scholarly interest in economic opportunities in communities that have largely been overlooked by the investment community as a whole. The explicitly economic perspective offered by EDM and the positive associations with international emerging markets have contributed to growing investor interest in low-income and minority communities. However, the lack of clarity in definitions may have created unintended consequences for the investment professionals attempting to develop these markets. In this essay, I describe three examples of how loose definitions have created dilemmas for private equity professionals managing what have been termed EDM-targeted funds. If we agree that language matters, then these cautionary tales call for a greater degree of clarity among opinion leaders when discussing these opportunities.

The ability to see new possibilities is fundamental to creating innovative designs - but what do we know about state-of-the-art possibility thinking? The purpose of this paper is to look at this topic, which the strategy field has largely ignored in favor of analytics, by examining a selection of breakthrough engineering projects. Out of these, the paper aims to draw eight different ways of illuminating new possibilities - challenging, connecting, visualizing, collaborating, harmonizing, improvising, re-orienting, and playing - and discuss what each of these might look like if applied to business strategy. The paper explores eight different engineering projects that are regarded as especially innovative. It then explores the lessons of these for business strategists. The paper finds that innovative business strategy development has many parallels with engineering approaches.

Today's preoccupation with cost shifting and cost reduction undermines physicians and patients. Instead, health care reform must focus on improving health and health care value for patients. We propose a strategy for reform that is market based but physician led. Physician leadership is essential. Improving the value of health care is something only medical teams can do. The right kind of competition-competition to improve results-will drive dramatic improvement. With such positive-sum competition, patients will receive better care, physicians will be rewarded for excellence, and costs will be contained. Physicians can lead this change and return the practice of medicine to its appropriate focus: enabling health and effective care. Three principles should guide this change: (1) the goal is value for patients, (2) medical practice should be organized around medical conditions and care cycles, and (3) results-risk-adjusted outcomes and costs-must be measured. Following these principles, professional satisfaction will increase and current pressures on physicians will decrease. If physicians fail to lead these changes, they will inevitably face ever-increasing administrative control of medicine. Improving health and health care value for patients is the only real solution. Value-based competition on results provides a path for reform that recognizes the role of health professionals at the heart of the system.

Over the past decade, billions of dollars have been invested by established companies in entrepreneurial ventures-what is often referred to as corporate venture capital. Yet, there is little systematic evidence that corporate venture capital investment creates value to investing firms. Scholars have suggested that established firms face underlying challenges when investing corporate venture capital. Namely, structural deficiencies inherent in corporate venture capital may inhibit financial gains. However, firm value may still be created as a result of other benefits from investing-primarily providing a window onto novel technology. In this paper, we propose that corporate venture capital investment will create greater firm value when firms explicitly pursue corporate venture capital to harness novel technology. Using a panel of CVC investments, we present evidence consistent with our proposition. The findings are robust to various specifications and remain unchanged even after controlling for unobserved heterogeneity in investing firms. Our results have important implications for corporate venture capital in particular, and technology strategy in general.

The orthodox justification for intellectual property is utilitarian. Advocates for strong IP rights argue that absent such rights copyists will free-ride on the efforts of creators and stifle innovation. This orthodox justification is logically straightforward and well reflected in the law. Yet a significant empirical anomaly exists: the global fashion industry, which produces a huge variety of creative goods without strong IP protection. Copying is rampant as the orthodox account would predict. Yet innovation and investment remain vibrant. Few commentators have considered the status of fashion design in IP law. Those who have almost uniformly criticize the current legal regime for failing to protect apparel designs. But the fashion industry itself is surprisingly quiescent about copying. Firms take steps to protect the value of trademarks, but appear to accept appropriation of designs as a fact of life. This diffidence about copying stands in striking contrast to the heated condemnation of piracy and associated legislative and litigation campaigns in other creative industries.

The purpose of any product or service is to create value for people. In the health sector, value is created by enabling health or improving healthcare. Patients experience value when their medical conditions are resolved safely, effectively and efficiently, as well as when disease or disease progression is prevented. Improving value-the quality received per dollar spent-should be the clear goal of health sector competition. Unfortunately, today, that is often not the case.

In this paper we focus on two core questions: 1) Why do some people seek entrepreneurial opportunities? 2) Under what conditions is the pursuit of entrepreneurial opportunity most likely? We attempt to answer these questions by creating a theoretical framework that considers the interaction between an individual's level of aspiration and their appraised value in the labor market. We propose that when there is disequilibrium between the aspiration vector (AV) of an individual and the perceived valuation of the market offering vector (P-MOV), an individual tends to pursue entrepreneurial opportunities. In addition, when hiring officers, HR directors, or other relevant parties involved in the hiring decision are biased or when existing organizations have limitations in reflecting an individual's AV, prospective entrepreneurs begin searching for new opportunities in society. Finally and in our view most crucially, we consider the interaction between an individual's subjective consideration and his perceived assessment by the labor market, a novel approach, which we hope takes into account the complexity and richness of entrepreneurship. We offer seven specific propositions that derive from the disequilibrium predicted by our framework.

Two prescriptions dominate the topic of what firms should do next in uncertain situations: planning approaches and adaptive approaches. These differ primarily on the appropriate role of prediction in the decision process. Prediction is a central issue in strategy making owing to the presumption that what can be predicted can be controlled. In this paper we argue for the independence of prediction and control. This implies that the pursuit of successful outcomes can occur through control-oriented approaches that may essentially be non-predictive. We further develop and highlight control-oriented approaches with particular emphasis on the question of what organizations should do next. We also explore how these approaches may impact the costs and risks of firm strategies as well as the firm's continual efforts to innovate.

We investigate the motivations and the returns to the firms and investors using Private Investments in Public Equities (PIPE) financing, an increasingly common form of equity-based financing. From 1995-2000, 1,466 firms raised more than $29 billion through 2,626 PIPE issues. We find that PIPE issuers are poorly performing firms, urgently in need of cash that, as a consequence, are without access to traditional forms of financing. The contract terms and embedded options in PIPEs allow investors to alter their exposure to post-issue movements in the value of the issuer's equity. As a result, the returns earned by investors substantially exceed those of shareholders. Hence PIPEs provide incentives for investors to make investments in firms with substantial operating uncertainties, enabling companies barred from traditional capital markets to obtain much needed financing.