Abstract
Entrepreneurship is usually seen as contributing to economic growth. Furthermore, there are an increasing number of studies that explore, among other things, the growth of firms, the contribution of entrepreneurship on a macro-level and the determinants of success, mostly highlighting the positive features of entrepreneurs. However, far less attention has been paid to the other side of the coin, namely negative or, as argued by Baumol, unproductive entrepreneurship. In this light, as emphasized by Baumol (1990), when seeking to implement business opportunities, entrepreneurs might as well allocate their resources to unproductive uses and thus, not everything that is labelled entrepreneurial is actually desirable.
A few studies, including Aidis and Van Praag (2007), Fadahunsi and Rosa (2002), Fairlie (2002) and Sobel (2008), have addressed this issue in various contexts. In his book, Gotschalk contributes further to the discussion by linking two seemingly unrelated concepts: entrepreneurship and organized crime. As defined by the author, the book aims to ‘provide the reader with a realistic concept and understanding of the problem of organized crime activity and the role of entrepreneurs in illegal business’ (p. 1). Thus, those interested in uncovering new perspectives on entrepreneurship and learning more on criminology can be considered as the main target audience of this book.
The first chapter deals with defining the main concepts, such as entrepreneurship, organized crime, entrepreneurs, illegal business and entrepreneurial capital. Referring to the inconsistency in defining these terms, Gottschalk draws on the definition as introduced by Albanese (2004), which sees organized crime as functioning in the framework of entrepreneurial organization. Furthermore, the role of risk-taking and the drive for generating profits are highlighted as important determinants for both legal and illegal ‘businesses’. However, in the context of exploring illegal business, the focus of interest is not on the (criminal) actions of individuals for example, drug dealers, but how these individuals form an organization or, according to the author, ‘enterprise’, in order to go about with their usually illegal activities (Albanese, 2004).
In this light, it is emphasized in the following chapters that criminal organizations follow very similar creation and operation patterns to entrepreneurial firms, from opportunity evaluation and allocation of resources to the activities determining and shaping performance. For example, in Chapter 2, referring to organizational and management theories, the author uses organizational stage models in order to describe the evolution and growth of criminal organizations and stages of a ‘criminal career’. Here, similarly as in a usual business, criminal organizations also begin in a nascent stage, when opportunity identification and evaluation is of major importance, which is followed by activities to take advantage of opportunities. Furthermore, the need for knowledge and appropriate strategies is highlighted in order to create ‘value’ from a ‘business’. Moreover, the author describes the stages of transition from a legal business to a criminal or mafia business.
The issue of criminal versus legal business organization is further addressed in the following chapters, mostly dealing with topics such as efficiency and value creation for the organization. Specifically, by emphasizing the need for dynamic leadership within criminal organizations, the role of management and leadership is assessed in Chapter 3, drawing on Mintzberg (1994). The author also explores criminal project life-cycles and the characteristics of leaders, which ensure maximum value creation for the project.
The chapters described above provide a more general overview of the patterns of legal and illegal organizations; the following chapters deal with specific issues. Chapter 5, for example, addresses the structure and cultural dimensions of the organizations. Here, legitimate and organized crime groups are compared, drawing on various indicators representing the characteristics of the organization, such as profitability, competition, rent-seeking behaviour, goals and objectives and transaction costs. Similarly, comparisons are made of organizational structure parameters as well as management structures between criminal and legal organizations. Drawing on this discussion, the author continues with assessing the topic of entrepreneurial growth patterns in illegal organizations, mainly emphasizing the role of strategy choices, resource management and knowledge management when it comes to developing a criminal organization. In all these chapters, a conceptual discussion is complemented with a variety of case studies, providing the reader with an in-depth picture of various examples of criminal activities and illegal entrepreneurship experiences.
Although the book is very rich in examples and interesting to read, a few shortcomings should be mentioned. First, the book suffers slightly from the balance between exploring crime and entrepreneurship. The emphasis is placed on crime, and although various management theories are explored within the context of organized crime, findings from the relevant entrepreneurship literature (e.g. Baumol, 1990; Sobel, 2008) are integrated only partially. Also, although the case studies are very interesting, sometimes they lack a conceptual framework.
Second, the book mainly focuses on individual-level and venture-level analysis. In this light, one of the important discussions in the recent entrepreneurship literature captures the topic of the possible contribution of illegal entrepreneurship at the societal level. For example, empirical findings show that in some cases, especially in turbulent environments and in the long-term perspective, some deviant activities can result in positive societal outputs (e.g. Sauka, 2008). Furthermore, there is evidence that formerly illegal entrepreneurs can make a successful transition to becoming owners of legal companies (e.g. Aidis and van Praag, 2007; Fairlie, 2002). These issues by no means limit the contribution of the book to entrepreneurship literature, and could be considered a task for further work on the topic.