Strategy formulation by the entrepreneur is rooted in individualism and not in collectivism. The economic school of thought of strategy formulation by the entrepreneur, which delineated his role as quantity and price decider only, has now been relooked from the platforms of vision formulation and his risk-taking capacity. The personal traits of the entrepreneur, his upbringing, his behavioral patterns and his extent of formal education are being looked at in order to understand the process of strategy formulation. The patterns which make an entrepreneur visionary are also mentioned in this article. It concludes by summing up the different aspects of strategy formation from the perspective of the entrepreneur and also suggests ways to minimize the pitfalls of such a formulation.

Strategy formulation has been considered by many researchers as a process of integration and collectivism (Spender 1979; Roth Ricks 1994). However, researchers of the entrepreneurial school consider the opposite is true—the process of strategy formulation is to be exclusively by a single leader. The central concept of the entrepreneurial school is the vision of the leader—‘a mental representation’ of (Mintzberg, et al. 1998) of strategy, which is created in the mind of the leader. The entrepreneurial school has its roots in economics. The role of the entrepreneur is clearly drawn from neo-classical economic theory.

According to this theory, his role was mostly confined to deciding the amount to be produced at relevant prices. The competitive market took care of the rest. However, not all economists agreed with this view. The most prominent of them was Joseph Schumpeter (1950). According to him, entrepreneurial behavior is not dominated by maximization of profits but to deal with situations that is changing that ‘firms can keep their feet on ground, which is slipping away from them’. Schumpeter thus introduced the famous notion of ‘creative destruction’. According to this notion, the entrepreneur is the main driving force for capitalism. The entrepreneur is not necessarily someone who puts the capital or who invents the product, but the person with the business idea. He has employed existing means of production differently and more advantageously and, thus, bears the risk. Moreover, in Schumpeter’s view, this person ceases to perform an entrepreneur function as soon as he stops innovating.