Entrepreneurship: Volume 15

The chapters in Part I highlight some of the central reasons for studying entrepreneurship at the aggregate, family, and individual levels. Lippmann, Davis, and Aldrich develop society level propositions about the relationship between inequality and entrepreneurship. They define entrepreneurship for both individuals and societies, and they argue that factors such as development, state policies, sector shifts, and changing labor market conditions affect levels of inequality and also increase incentives for entrepreneurship. The authors distinguish entrepreneurship undertaken out of necessity and entrepreneurship that takes advantage of market opportunities, and they propose that changing social and economic conditions affect entry into each type of entrepreneurship. The arguments presented in this chapter are well-grounded in previous theoretical and empirical research, but they ask about the relationship between entrepreneurship and inequality in a fresh, new way. Not only does this chapter clarify the factors that lead to entrepreneurship, but it also identifies new relationships between business start-ups and stratification that have not been explored previously.

Nations with high levels of economic inequality tend to have high rates of entrepreneurial activity. In this paper, we develop propositions about this relationship, based upon current research. Although we provide some descriptive analyses to support our propositions, our paper is not an empirical test but rather a theoretical exploration of new ideas related to this topic. We first define entrepreneurship at the individual and societal level and distinguish between entrepreneurship undertaken out of necessity and entrepreneurship that takes advantage of market opportunities. We then explore the roles that various causes of economic inequality play in increasing entrepreneurial activity, including economic development, state policies, foreign investment, sector shifts, labor market and employment characteristics, and class structures. The relationship between inequality and entrepreneurship poses a potentially disturbing message for countries with strong egalitarian norms and political and social policies that also wish to increase entrepreneurial activity. We conclude by noting the conditions under which entrepreneurship can be a source of upward social and economic mobility for individuals.

This paper uses a representative sample of U.S. workers to examine how self-employment may reduce work-life conflict. We find that self-employment prevents work from interfering with life (WIL), especially among women, but it heightens the tendency for life to interfere with work (LIW). We show that self-employment is connected to WIL and LIW by different causal mechanisms. The self-employed experience less WIL because they have more autonomy and control over the duration and timing of work. Working at home is the most important reason the self-employed experience more LIW than wage and salary workers.

This chapter combines insights from organizational theory and the entrepreneurship literature to inform a process-based conception of organizational founding. In contrast to previous discrete-event approaches, the conception argues that founding be viewed as a series of potential entrepreneurial activities – including initiation, resource mobilization, legal establishment, social organization, and operational startup. Drawing on an original data set of 591 entrepreneurs, the study examines the effect of structural, strategic, and environmental contingencies on the relative rates with which different founding activities are pursued. Results demonstrate that social context has a fairly pervasive impact on the occurrence and sequencing of founding processes, with one possible exception being the timing of legal establishment.

New ventures contribute to the competitiveness of the United States in global markets, creating jobs and wealth. Understandably, public policy makers and researchers alike have shown an interest in understanding the factors that spur these ventures’ growth, which is also an important research issue in the field of entrepreneurship. Researchers have highlighted the role of owners’ needs and aspirations and industry conditions as determinants of new ventures’ growth. This study proposes that new ventures’ resource endowments influence their growth in domestic and international markets. Using the resource-based view (RBV) of the firm, the study examines the effect of select technological resources on the domestic and international sales growth of 419 new ventures. Start-ups (5 years or younger) benefit from using a different set of technological resources in achieving growth than those of adolescent firms (6–8 years old). These differences persist in low vs. high technology industries, reflecting the maturation of these ventures.

The social organization of work has become more entrepreneurial and less bureaucratic over the past 20 years. How is this development consistent with managerial control over the labor process? This paper develops a professional autonomy perspective to explain the acceptance of new management ideas in the United States, including the recent turn away from bureaucratic organizational forms. The focus on professional autonomy helps to create a theoretical link between past and current managerial practices, including the latest anti-bureaucratic phase that we label neoentrepreneurialism. We conclude by exploring future research implications of studying managerial practice from a professional autonomy perspective.

The early-stage venture capital (VC) industry has long been dominated by small firms comprising senior venture capitalists and few junior staff. However, during the late 1990s, a group of firms changed their internal structures, adopting pyramidal structures and redesigning internal processes to leverage the efforts of junior staff. In doing so, they followed first-movers in other professional services industries that transitioned to pyramidal models in the 20th century. Has the recent industry downturn terminated the transition, or simply delayed it? This chapter analyzes the events that led the VC firms to transition, the barriers to doing so, and related issues affecting the industry's future.

This paper examines the late 20th Century emergence of wineries in North Carolina, using the concepts of clusters and industrial policy to explain the dynamics of entrepreneurship in an embryonic industry. Specific attention is paid to how changing resource conditions (available agricultural land and financial capital) interact with an entrepreneurial climate that has fostered individual interest in winemaking to precipitate institutional changes that consolidate cluster formation. Using a model of small business growth in which firms gain credibility through identification with a cluster we trace the success of key wineries in this geographic region.

The Mexican-American population has experienced a dramatic increase in ethnic entrepreneurship over the last several decades. In an attempt to explain this development, 25 Mexican-American entrepreneurs were interviewed in the Chicago area. These interviews focused upon the specific ethnic strategies used by these entrepreneurs to bridge the gap between the opportunity structures for entrepreneurship in the United States economy and the unique group characteristics or capacities for entrepreneurship characterizing the Mexican-American population. Based upon these interviews, we found that the favored ethnic strategy used by Mexican-American entrepreneurs involved attempts at socializing the economic encounter between co-ethnic customers and entrepreneurs. These socializing activities were examined using Goffman's frame analysis, with particular attention devoted to the collective organization of customer and entrepreneur experience in terms of an ethnic frame.

Much research claims that immigrant women's entrepreneurship in Western capitalist societies is embedded in the structural and cultural attributes of receiving societies. Other studies maintain that the structural and cultural traits of immigrant groups explain women's entrance into this type of business activity. Together, this body of research underestimates those individual attributes embedded in human agency, in the personalities of immigrant women, that encourage them to engage in this type of business enterprise.

We argue that claims of an entrepreneurial miracle as a description of private sector development in post-communist Europe conflates entrepreneurship with self-employment. The difference between the two hinges on the Weberian distinction between enterprise- and household-centered businesses. We then present two paradigms, the entrepreneurial that emphasizes the first and the post-Fordist that stresses the importance of the second business type, and provide data on businesses and individual motivation of business owners. We find more support for the post-Fordist approach. Then we show that business forms, primarily associated with self-employment have different recruitment patterns and rewards than other, more entrepreneurial forms. We end with a plea to disaggregate the various forms of independent, private sector activity in future research.

Since institutions are typically conceptualized as “the rules of the game in a society” (North 1990: 3; Scott 1995), “institutional transitions” are defined as “fundamental and comprehensive changes introduced to the formal and informal rules of the game” (Peng 2003: 275). One of the most dramatic sets of institutional transitions in the last two decades has been the political, economic, and social changes sweeping across Central and Eastern Europe (CEE), the newly independent states (NIS) of the former Soviet Union, and the East Asian countries of China and Vietnam. In fact, these institutional transitions are so profound that these countries, formerly known as the Eastern bloc, have now been collectively labeled “transition economies.”

Nearly a century ago, Max Weber studied Chinese lineage system and argued that the power of the patriarchal sib impeded the emergence of industrial capitalism in China. Recently, Martin Whyte re-evaluated Weber's thesis on the basis of development studies and argued that, rather than an obstacle, Chinese family pattern and lineage ties may have facilitated the economic growth in China since the 1980s. This paper empirically tests the competing hypotheses by focusing on the relationship between lineage networks and the development of rural enterprises. Analyses of village-level data show that lineage networks, measured by proportion of most common surnames, have large positive effects on the count of entrepreneurs and total workforce size of private enterprises in rural China.