Academic journal article Journal of Small Business Strategy

How Do Entrepreneurial Growth Intentions Evolve? a Sensemaking-Sensegiving Perspective

Academic journal article Journal of Small Business Strategy

How Do Entrepreneurial Growth Intentions Evolve? a Sensemaking-Sensegiving Perspective

Article excerpt


In this paper, we develop a process model to explain how growth intentions evolve over the venture's life cycle. Adopting an inductive approach, we use case study data from 30 small and medium enterprises (SME) with an explicit focus on venture growth over five years. Three waves of data were collected from the same set of lead entrepreneurs in these firms to identify if and why their intentions to grow their businesses changed over the timeframe. Using grounded theory development, we formulate a model characterizing entrepreneurial growth intentions. The model incorporates a sensemaking-sensegiving perspective and is recognized in terms of its constituent 3Ps (Precursors, Process and Product), serving to capture the essential dynamic of the entrepreneurial growth intention process over time.

Keywords: firm growth, entrepreneurial orientation, small business


While high-growth entrepreneurial firms widely vary across size, sector, and age characteristics, they all need a high level of commitment from the lead entrepreneur to achieve growth (Gilbert, McDougall, and Audretsch, 2006; Smallbone, Leigh and North, 1995). Yet, as Gilbert et al. (2006) note, research by Barringer, Jones, and Neubaum (2005) shows only 3.5% of the new ventures started each year in the U.S. actually evolve into large firms. Entrepreneurs differ widely in terms of their attitudes towards growth (Cliff, 1998), need for wealth attainment (Amit, MacCrimmon, Zietsma and Oesch, 2001), and willingness to grow (Davidsson, 1989).

Much of what unfolds in course of the history of an entrepreneurial venture is inextricably linked with entrepreneurial intention, i.e. what entrepreneurs think with respect to their ventures and how they act on these thoughts (Bird, 1988, emphasis our own). Intentions characterize entrepreneurial action and are affected by individual and contextual factors such as social, political, and economic factors, personal history, current personality, and abilities of the entrepreneur, and experience and satisfaction with current job (Lee, Wong, Foo and Leung, 2011). Intentions are also influenced by the entrepreneur's rational analytic, as well as, intuitive holistic thinking frames and structures used to make sense of the environmental potential that exists with respect to creating and making a success of the new business (Palich and Bagby, 1995). Focusing our attention on factors that influence the process of evolution of entrepreneurial growth intentions can help to inform us why some ventures achieve growth while others do not do so. Therefore, in this paper, we study how entrepreneurial growth intentions evolve over the venture's life cycle, by utilizing insights from Gioia and Chittipeddi's (1991) sensemaking- sensegiving perspective.

According to Cornelissen and Clarke (2010), new venture creation requires the entrepreneur to not only develop mental models of the market, so as to identify and act on opportunities, but also situate such understanding in a wider social environment, evoking meaning in line with political interests that matter as far as realization of the entrepreneurial opportunity is concerned. To do so, the entrepreneur: (i) must construct a reality based on his/her beliefs about an emerging opportunity and (ii) be able to articulate the reality to other stakeholders that matter as far as launching and growing the venture is concerned (Vaghely and Julien, 2010). Together, these tasks involve a dynamic process of sensemaking-sensegiving on the part of the entrepreneur (Bettiol, Maria and Finotto, 2012). Gioia and Chittipeddi (1991) developed the sensemaking- sensegiving framework to explain how organizations accomplish strategic change. The first process, sensemaking, is how the organizational leader searches information relating to the internal and external environments and engage in meaning- making, in order to identify strategic imperatives and a plan for action. …

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