ethics and entrepreneurship

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This paper examines Dunham's (2009) Journal essay, "From Rational to Wise Actions: Recasting Our Theories of Entrepreneurship." Durham's paper is organized as follows: abstract, introduction, description of concepts, discussion, consequences, and conclusion. The abstract elaborates on the introduction and conclusion succinctly, but it lacks a connection to the technique. The writer explains the reasoning, empirical problems, and goals of the paper in the introduction. Among the factors discussed in the essay are utility maximisation, limits, choice propositions, ethical action motivations, and entrepreneurial cognitions. This paper delivers a summary review of the essential issues expressed in the literature review and presents the research approach employed in the article. The researcher notes that theories of rationality influence opportunity recognition. This paper assesses the study article regarding its impact on further research while analysing the practical implication of the ideas and conclusions provided in the report. Lastly, this paper presents an analysis and summary of the key findings and conclusion.

The article is informative and insightful because it seeks to integrate normative ethics into the entrepreneurial theories while making decisions. The author argues that a reasonable entrepreneur will work to instil good character and virtue, and in addition to that, benefit the society. The paper rejects the narrow version of rational choice because it sidelines ethics in entrepreneurship.

The primary research question of the paper is; should ethics be intertwined with entrepreneurship? However, there can also be other research questions such as what it means to be a good entrepreneur and what information is used to make entrepreneurial decisions taking into account the risks involved. The other issue that the paper focuses on is the possible problems between potential stakeholders’ values and those fixed by the entrepreneurs. The rationale of the article is the rejection of the separation thesis which advocates for ethics and the business framework to be studied separately. The article under analysis presents ideal, specific rationale that aims to eliminate research gaps and guided in solving particular problems. It supports the wide version. The research objectives are to challenge the narrow version rationality and advocate for the practical wisdom approach in making entrepreneurial decisions. For objectives to be practical, it is vital that they are specific, achievable, realistic, and measurable and time-bound. However, the objectives of the article under analysis lack time specifications.

To support or reject claims, the researcher refers to several literature materials such as those by Freeman (2005), Aristotle (1984) and Austin et al. (2006). To justify the research and establish the background of the study, the author utilises academically authoritative and appropriate sources such as peer-reviewed articles, past reviews, and primary research. Moreover, the author presents references accurately throughout the journal article. Even though most of the cited literature cited is appropriate, most of them may be outdated since they were written more than ten years before the publication of the article under review.

Through qualitative analysis, the author of the paper analyses a wide range of information from various scientists to reach conclusions. The article researches questions such as; should ethics and entrepreneurship go hand in hand? The author also tests the practical wisdom theory, which entails the entrepreneur understanding the good they seek to achieve with their stakeholders. In addition to that, it follows careful observation of both the narrow and wide versions. The article also assesses causes that influence outcomes such as using wisdom-based approach to make entrepreneurial decisions while considering the implication of unethical entrepreneurial behaviours.

There are several views expressed in the literature review, in the article. For instance, the author cites Opp (1999) who analyses theorists who advocate for the narrow sense from those who support for the comprehensive version of the rational choice theory. The author explains that the small version theorists advocate for preferences and constraints to be strictly limited. On the other hand, the broad version theorists advocate for the expansion of presuppositions shrouding rational choice models. Opp also examines the core assumptions of the logical choice theory; accepted by theorists who support both the narrow and the wide version.The premises include; preference proposition in which individual preferences are useful in fulfilling the personal likes, constraints proposition which alleges an increase or decrease of chances of a person to achieve their preferences as a determinant for executing these actions. The last core assumption is the utility maximisation proposition in which persons decide on those activities that meet their choices to the most significant extent.

Furthermore, the paper cites Aristotle (Aristotle, 1984) who conceptualises practical wisdom or phronesis which was updated by Dewey in the entrepreneurial sense. Dunham (2010) posits that the wise entrepreneur weighs many factors when deciding their course of action. The realistically knowledgeable entrepreneur attempts to formulate a great life for himself and his stakeholders. Dunham also supports opportunities and enterprises whose purpose, affiliate dealings and guiding values support the mutual good. Thus an entrepreneur should identify that economic viability is indispensable and that revenues support business ventures. Thus financial aspects play an essential role in Durham’s deliberations. Practical wisdom, therefore, is the ability to comprehend and act upon what is both useful and feasible for oneself and others in certain situations. (Dunham, 2009)

The paper is essential for research and opening up channels of study for entrepreneurship scholars in teaching good character and good virtue for entrepreneurs and stakeholders. In entrepreneurial decision making it is imperative to provide practical wisdom. Since the author suggests pure rationality may not be the only approach to decision making, which this research paper agrees to, entrepreneurs require incorporating ethical dimension since it is an act of creativity progress and change that is integrally ethical. However, there may need to comprehend the implication of relying on practical wisdom. The challenge is that it is not easy to quantify the ability to reason, particular knowledge and ability to act as defined by theories of practical sense. Thus research on practical reason may be limited to personal opinions rather than practical issues.

The use of rational approach choice theory sparks interest in entrepreneurial opportunity recognition and the associated risks. It will motivate scholars to make inquiries aiming at assessing the incentives of embracing ethics in the entrepreneurial arena and provide a root for research on the purpose and driving factors for the entrepreneurs. Rational approach essential in providing information on the process of establishing and enhancing effective stakeholder relationships. The paper presents for inquiry and research on factors relating to entrepreneurial actions, ethics and morality. By identifying the elements of rational choice and conducting a comparison of the narrow version approach and the more extensive version approach, the research paper creates a source of information for the decision making in entrepreneurship. The article further clarifies the perceptions of whether the entrepreneurial ventures only apply if the entrepreneurs believe that they are of economic value and considers underlying factors

The article advocates for the practical wisdom approach in making entrepreneurial decisions. In this method, the knowledgeable entrepreneurs attempt to formulate a good life for themselves and their stakeholders, while looking for opportunities and establishing projects whose basis, guiding principles and affiliate dealings promote the mutual benefit. Durham also identifies that economic success is indispensable and that profit sustains any entrepreneurship course. Thus economic aspects play an essential part in the entrepreneur’s deliberations. Nevertheless, for the prudent entrepreneur, financial return is only one of additional factors Dunham examines when deciding his course of action.

Entrepreneurs should embrace rational choice theory’s wide version to accommodate the various kinds of assumptions underlying reasonable, logical choice models. They should also use the practical wisdom approach as advanced by Dewey because it takes into account their shared sense of value with their stakeholders while at the same time helping them to find out the most suitable action for achieving their goals in an array of sophisticated and unsettled situations.

The conclusion of the article under study agrees with the data obtained in literature review and analysis. The researcher recommends more analysis on the application of rational and practical wisdom in promoting entrepreneurship, in a different setting to improve generalisation of findings. The article is useful because it creates a need to conduct research on the separation thesis and subsequently overcome it. It also highlights associated results of entrepreneurial behaviours that have sparked interest in the rational theory of decision making. In addition to that, it is vital in motivating scholars to research on norms and practices that monitor the excellent control of entrepreneurs social relations and shape opportunities for recognition and pursuit. This paper agrees with Dunham assertion that promoting practical reason may form a perception that rationality is not suitable for the entrepreneur. Hence, there is need to integrate various approaches to entrepreneurship decision making.


The Journal by Dunham provides significant ideas and theories on entrepreneurship decision-making process. Dunham analyses various literature materials to present the argument that, there is need to integrate both rationality and practical wisdom. While rational decision making is vital in entrepreneurship, Dunham notes that practical wisdom promotes ethics, the conception of what is wrong or right and ability to deliberate well. Though the article has many demerits such as the use of outdated materials, Dunham article is efficient in opening up new avenues for research by entrepreneurship scholars and in promoting good character, virtue for entrepreneurs and effective decision making.


Dunham, L. C. (2009). From Rational to Wise Action: Recasting Our Theories of Entrepreneurship. Journal of Business Ethics 92, 92:513–530 DOI 10.1007/s10551-009-0170-5.

December 08, 2022

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