The Influence of Entrepreneurs' Credentials and Impression Management Behaviors on Perceptions of New Venture Legitimacy
Nagy, Brian G., Pollack, Jeffrey M., Rutherford, Matthew W., Lohrke, Franz T., Entrepreneurship: Theory and Practice
We examine how entrepreneurs' behaviors related to credentials and impression management (IM) impact perceptions of new venture (NV) legitimacy. Results from this experiment, as hypothesized, show that entrepreneurs' credentials and IM behaviors are positively related to legitimacy perceptions. Contrary to expectations, however, findings do not support either interaction hypothesis when credentials are high or low. We discuss how these findings illustrate the importance of entrepreneurs' behaviors during the NV creation process and outline multiple directions for future research.
To launch and grow new ventures (NVs), entrepreneurs rely on stakeholders to provide critical resources in the earliest stages of firm development. Unfortunately, given nascent ventures' lack of operating history, these stakeholders face high uncertainty about nascent ventures' viability, and, thus, may be reluctant to invest time, money, advice, and other critical resources in them (Singh, Tucker, & House, 1986; Zott & Huy, 2007). Consequently, unless entrepreneurs can successfully overcome this "liability of newness," their NVs face a high probability of failure (Shane & Cable, 2002; Stinchcombe, 1965).
Not surprisingly, the topic of how entrepreneurs secure necessary resources, given the high uncertainty surrounding NVs, represents a fundamental focus in entrepreneurship research (Venkataraman, 1997). Scholars have noted that stakeholders have highly subjective perceptions about NVs because of high uncertainty about ventures' long-term viability (Aldrich & Fiol, 1994). Accordingly, studies have been performed to investigate myriad cues that stakeholders may employ, including entrepreneurs' business network connections (Larson, 1992), industry experience (Shepherd, Douglas, & Shanley, 2000), as well as NVs' affiliations with other organizations (Stuart, Hoang, & Hybels, 1999), to reduce uncertainty, and, in turn, decide whether or not to commit time and resources. Overall, findings indicate that stakeholders explicitly or implicitly rely on multiple cues to decide whether NVs exhibit appropriate characteristics to be considered legitimate based on prevailing social norms (Suchman, 1995; Zimmerman & Zeitz, 2002).
Although research into what cues stakeholders use to make decisions is well developed (e.g., Shepherd & Zacharakis, 2003; Tyebjee & Bruno, 1984), we know much less about specific behaviors that entrepreneurs can employ to positively influence stakeholders' perceptions and subsequent resource-related decisions. Extant research has often investigated "checklists" (e.g., writing business plans and obtaining tax identification numbers) that most entrepreneurs follow rather than theoretically grounded hypotheses that may help differentiate appropriate and inappropriate entrepreneurial behaviors (Zott & Huy, 2007). One promising research avenue, however, investigates the practical value that an entrepreneur's social skills and behaviors, including persuasion, social adaptability, and impression management (IM) behaviors, can have in successfully launching a NV (Baron & Markman, 2003; Bowey & Easton, 2007; Hayton & Kelley, 2006).
IM, defined as behaviors employed to create, protect, maintain, or alter an image of oneself held by a target audience, may prove particularly useful for investigating entrepreneur-stakeholder interactions because of its well-developed theoretical base, strong empirical support, and ability to bridge individual behaviors and organizational outcomes (Bolino, Kacmar, Turnley, & Gilstrap, 2008). Entrepreneurship studies have begun investigating the relationship between IM behaviors and NV outcomes, but, to date, this research has remained primarily conceptual (De Clercq & Voronov, 2009) or, in the case of empirical studies, has relied on entrepreneurs self-reporting their IM abilities rather than gauging stakeholders' perceptions of these behaviors (Baron & Markman, 2003). …