Leadership and entrepreneurial capabilities under health shocks

  • Project period: 2021
  • Category: In-house Project


Scientific literature underlines the relevance of entrepreneurial capabilities in the determination of the effectiveness of the socio-economic response to health crises in both the short- and long-term (Cohen 2019; Giones et al. 2020). Private and public organizations must act decisively in a context of critical and sustained uncertainty, adopting experimental, agile approaches to problems, prioritizing openness to change and quick reactions over concerns for efficiency and form (Chesbrough 2020). Entrepreneurial capabilities are also necessary to exploit the opportunities for more sustainable long-term socio-economic development created by health shocks (Herlihy 1997; Kahn 2016; Leal Filho et al. 2020). However, the entrepreneurial response can also be destructive (Baumol 1996), aimed towards contrasting, exploiting and subverting the containment and therapeutic measures introduced as a response to the shock (Lucas & Fuller 2018). Empirical research suggests that entrepreneurial capabilities can be promoted and directed towards beneficial aims by leaders willing and able to take quick decisions under uncertainty and mobilize both private and public resources to confront the crisis (Bresalier 2012; Cohen 2019; Easterlin 1999; Olmstead 2009; Sankaran et al. 2020). Emergency leadership, however, may later lead to the institution of unduly constraining rules and practices, stifling contribution from the private sector in order to maintain control (Olmstead 2009; Spar and Bebenek 2009; Thomas and Thomas 2018).

Thus, from both a theoretical and empirical perspective, the relationship between entrepreneurial capabilities and effective leadership in the context of health shocks and their aftermath remains unclear. Entrepreneurship and leadership are both described as necessary social processes to deploy and effective short- and long-term response to health shocks, relying on each other to achieve the best result. However, at the same time, one can also hinder the other, hindering the process of recovering and rebuilding following the health shock. Furthermore, although entrepreneurial theories refer to leadership, and leadership theories refer to entrepreneurial processes, there is no explicit theorization of the interaction between entrepreneurship and leadership neither on a general level, nor especially in the context of health shocks. The aim of the project is to address this research gap by first developing a theory of the interactions between leadership and entrepreneurship within the context of health shocks, and to later apply the resulting theorization to the analysis of the development of emergency practices within the context of the Norwegian health sector during the COVID-19 crisis and its immediate aftermath.

Starting from complexity leadership theory Marion& Uhl-Bien (2011) on one side, and the judgment theory of entrepreneurship on the other (Foss & Klein 2015), we find significant common ground between entrepreneurship and leadership studies. Conceptualizing both phenomena as complex responsive processes (Stacey 2003), we argue that, under normal conditions, the functions of leadership and entrepreneurship are co-defined in relation with existing institutional arrangements. However, health shocks are liable to suspend, neutralize and muddle the institutional lines, resulting in a phase of diffuse entrepreneurship, in which both leadership and normal productive activities temporarily partake of the entrepreneurial dimension. The re-definition of institutional arrangements marks the switch between the short-term and the long-term phase of the health shock, and a phase of diffuse leadership, as entrepreneurial agents can contribute to the definition of a new normal. When this process is resisted, however, destructive entrepreneurship can arise instead, as private initiative is repressed, resulting in the emergence of profit opportunities in contrast with the public interest.


  • Erlend Nybakk

    Project manager / Professor

    Kristiania University College

    Institutt for økonomi og innovasjon

    Erlend Nybakk
  • Beniamino Callegari

    Kristiania University College

    Kristiania University College

  • Tom Karp

    Tom Karp


    Kristiania University College

    Institutt for ledelse og organisasjon

    Tom Karp

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