Academic journal article Entrepreneurship: Theory and Practice

The Social Construction of Entrepreneurship: Narrative and Dramatic Processes in the Coproduction of Organizations and Identities

Academic journal article Entrepreneurship: Theory and Practice

The Social Construction of Entrepreneurship: Narrative and Dramatic Processes in the Coproduction of Organizations and Identities

Article excerpt

A social dimension to business development and inertia is currently acknowledged in several accounts of learning, business models, vision building, and innovation, and through more general concepts of networking, social capital, and embeddedness. Here a constructionist perspective is developed to improve our understanding of the interactions between entrepreneurs and stakeholders in all of these areas. This identifies narrative and dramatic processes that describe how notions of individual and collective identity and organization are coproduced over time. A framework is created to show how selective and emotional processes that produce storylines, emplotment, and narrative structure support sense making and action making.


Understanding of the formation and development of organizations is frequently approached in two apparently contrary principles. The first relates opportunity realization to vision, self-belief, and adaptive learning (Bird, 1988; Rae & Carswell, 2000, 2001; Van de Ven, Huston, & Schroeder, 1984). The second relates organizational reliability and efficiency to accountability, legitimacy, path dependency, and inertia (Baron & Hannah, 2002; Baron, Hannan,& Burton, 1999; DiMaggio & Powell, 1983; Hannan& Freeman, 1984; Meyer & Rowan, 1977; Meyer & Scott, 1992). These two principles of adaptation and inertia are often juxtaposed sequentially. Hannah and Freeman (1984) argue that after an initial period of experimentation and learning, inertia increases with the age, size, and complexity of the organization. Punctuated equilibrium models (Gersick, 1991) describe alternating periods of learning and routinization. These may be normative-linear models (Greiner, [1972] 1998; Leontiades, 1979) or empirically derived accounts of less predictable patterns of upheaval and convergence (Hendry, Arthur, & Jones, 1995; Hurst, 1995; Pitcher, 1997; Tushman, Newman, & Romanelli, 1986). The problem with many explanations of the development of small firms according to Frank and Lueger (1997) is that: "Development analyses frequently focus on changes in variables and results of development processes. The process taking place between the two measuring points, however cannot be examined empirically" (ibid. p. 36).

We can illustrate this charge briefly by considering the major variables in recent examples of the adaptation and inertia principles. Rae and Carswell (2000, 2001) explain the process of organizational development by reference to the self-efficacy, values, personal theory, and relationships of the entrepreneur. Whilst Baron et al. (1999), refer to entrepreneurs' organizational models or blueprints that reflect different assumptions about the control, selection, and attachment of employees (see Figure 1). Although the first approach stresses the adaptation of the firm and the second stresses the inertia of the firm, both approaches effectively make central recourse to the idea of a business model, which is a set of expectations about how the business will be successful in its environment (For a fuller account of the sense in which a business model is used here, see Bettis and Prahalad's [1995] concept of the dominant logic.).


In the former approach the model is conceived as a "personal theory" that is a product of the entrepreneur's active learning from experiences and relationships. In the latter the organizational model is described in detail, but the authors are more circumspect about its origins. It is said the model may be an outcome of the visions, values or strategy of founders or the economic, social, and cultural forces brought to bear on firms by venture capitalists, accountants, governments, and others. The authors note, "Our results demonstrate that those blueprints affect the pace of business bureaucratization, but they do not resolve the thorny issue of the distinctive contributions made by founders and other actors in building and changing organizations. …

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