Harvard School Theory of Entrerpeneurship

This one is a bit of a stretch to call a theory, but we can perhaps think of it as a process theory or a discovery theory.

Pradhan and Nath (2011) discuss the Harvard School Theory of entrepreneurship. They say the theory views entrepreneurship as involving "all such activities that initiates, maintains and results in a profit oriented enterprise for production or distribution of economic goods or services and which is consistent with internal and external forces."

According to Mohanty (2005), the Harvard School Theory is a framework for strategic analysis and decision-making that is widely used in the field of entrepreneurship. It involves a thorough internal analysis of the organization's resources and capabilities, as well as an external analysis of the broader business environment.

The internal analysis focuses on identifying the organization's strengths and weaknesses, as well as any opportunities and threats that may arise from the external environment. This involves assessing the organization's resources, capabilities, and competitive advantages, and identifying any areas where the organization may be falling short.

The external analysis, on the other hand, involves examining the broader business environment to identify potential opportunities and threats. This includes conducting political, economic, social, technological, environmental, and legal analyses, as well as using specialized analysis techniques such as PESTEL, 5-Forces, and VRIO. These techniques can help entrepreneurs to better understand the forces shaping their industry and to identify potential areas of growth or opportunity.

Once both the internal and external analyses have been conducted, entrepreneurs can then use this information to identify potential entrepreneurial activities and make recommendations for the best course of action. This may involve selecting between different types of entrepreneurial activities, such as starting a new venture, acquiring an existing company, or forming a strategic partnership.

Overall, the Harvard School Theory provides a framework for strategic analysis and decision-making in the field of entrepreneurship. By combining internal and external analyses and using specialized analysis techniques, entrepreneurs can gain a deeper understanding of their organization and the broader business environment, and make more informed decisions about the best course of action to achieve their goals.

The theory is similar to a contingency theory in that the right entrepreneurial activity must fit the internal and external environmental conditions. Thus, there is not a right answer for all ventures, but different right and wrong answers for each venture.

It is interesting to see what is basically the Harvard case process applied to entrepreneurial opportunities as a theory. It is in the same bucket as experiential learning, human capital theory, and other approaches that assume that students can learn to be entrepreneurs by doing a set of things.


Pradhan, Rabindra & Nath, Papri. (2011). Rethinking entrepreneurship: Developing a psychosocial framework. Journal of Indian Academy of Applied Psychology. 

Mohanty, S. K. (2005). Fundamentals of entrepreneurship. PHI Learning Pvt. Ltd.

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