Reference no: EM133261229

Frank Knight claims that a successful business venture depends to some extent on luck, not just on the distinct qualities and capacities of the entrepreneur. To support this claim, Knight writes: "It is not necessarily a proof of high skill to make a twenty-foot putt in golf or pierce a two-inch bull's-eye at a hundred yards with a rifle; nor a lack of skill to miss a three-foot putt or strike outside the eight-inch circle. Either would happen sometimes with good shots or poor; only the proportion of successes and failures in a fair number of trials gives any indication of real ability to do the trick."

Donald T. Campbell challenges the predominant conception of creativity as a kind of trait or talent. In lieu of that view, he proposes a theory of creative thought as a knowledge process. On this theory, creativity involves blind trial-and-error experimentation and (unconscious) editing or filtering that arrives, mostly by chance, at good ideas or combinations of ideas.

Question 1: Explain how Campbell's account of creativity supports Knight's distinction between risk and uncertainty.

Question 2: Given that both entrepreneurial success and creative thought (which drives innovation) involve chance or luck, how can the entrepreneur lay claim on profit? (So for example, why should Google engineers earn more than managers do?)