Extending the Behavioral Theory of the Firm to Entrepreneurial Firms Philip Bromiley

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Extending the Behavioral Theory of the Firm to Entrepreneurial Firms 
 
Philip Bromiley 
 
Merage School of Business 
University of California, Irvine 
Irvine, CA 92697-3125 
Email: [e-mail] 
Phone: [phone] 
 
 
 
Devaki Rau
1
 
 
Department of Management, College of Business 
Northern Illinois University 
De Kalb, IL 60115 
Email: [e-mail] 
Phone: [phone] 
22 March 2019 
1
Corresponding author 
 
 

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Extending the Behavioral Theory of the Firm to Entrepreneurial Firms 
Abstract 
While the
 
Behavioral Theory of the Firm (BTOF) is one of the most popular theories of 
organizational change in the strategic management literature, the empirical work used to develop 
the theory used established firms; most empirical tests of the theory do likewise. Over the past 
decade or so, however, a number of studies have attempted to extend the BTOF to 
entrepreneurial firms. This paper examines the extent to which the BTOF applies to 
entrepreneurial firms. We propose that while some constructs and mechanisms specified in the 
BTOF (such as aspirations, routines, search, and learning) have limited relevance for 
entrepreneurial firms and need modifications to be relevant, other constructs and mechanisms 
(such as dominant coalitions and biases) have greater visibility and relevance in entrepreneurial 
firms than in larger firms. We conclude with a discussion of how we can most fruitfully apply 
the BTOF to explaining decision making by entrepreneurial firms.