Entrepreneurship in Context

Marco van Gelderen, Enno Masurel

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136624414
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Much research in entrepreneurship presents results as if they are universally and timelessly valid. Entrepreneurship in Context takes the opposite tack – it studies entrepreneurship as a context bound phenomenon. For entrepreneurship, the importance of context goes beyond gaining understanding and avoiding mistakes. The reciprocal influence exercised by the entrepreneurial venture and its corresponding context is at the very heart of the entrepreneur as an agent of change. The book addresses context in a narrow sense, i.e. a person's life situation and local, situational characteristics. It also deals with wider contexts such as social, industry, cultural, ethnic, sustainability-related, institutional, and historical contexts. The book studies the interconnectedness of all these various sub-contexts. It zooms in on the actions that entrepreneurs take to involve, engage, and influence their context and shows the changing and dynamic nature of context. It provides lessons for entrepreneurs about which contextual elements should be prioritized, engaged and sought out.

Part I
Introduction

1 Introduction to ‘Entrepreneurship in Context’

Marco van Gelderen, Karen Verduyn, and Enno Masurel

Introduction

This volume aims to provide insight into the role of context in the world of entrepreneurship. Even though context is a widely used and often mentioned aspect in studies of organizational and entrepreneurial life, its precise meaning and role often remain unspecified. In the current volume, we draw attention to the various meanings and roles, as well as the importance of context in entrepreneurship studies. In recent decades, a wide variety of scientific disciplines have started to pay increased attention to context. These include anthropology, archaeology, art history, geography, intellectual history, law, linguistics, literary criticism, philosophy, politics, psychology, sociology, and theology (Burke, 2002). Entrepreneurship research is no exception and, like so many other fields of science, has increasingly included the topic of context. For entrepreneurship, the importance of context goes beyond gaining understanding and avoiding mistakes. The reciprocal influence exercised by the entrepreneurial venture and its corresponding context is at the very heart of the entrepreneur as an agent of change.

This volume addresses context in a narrow sense, namely, a person’s life situation and local, situational characteristics. It also deals with wider contexts such as social, industry, cultural, ethnic, sustainability-related, institutional, and historical contexts. The volume studies the interconnectedness of all these various subcontexts. It zooms in on the actions that entrepreneurs take to involve, engage, and influence their context and shows the changing and dynamic nature of context. It also provides lessons for entrepreneurs about which contextual elements should be prioritized, engaged, and sought out. For entrepreneurship, the importance of context goes beyond gaining understanding and avoiding mistakes. The reciprocal influence exercised by the entrepreneurial venture and its corresponding context is at the very heart of the entrepreneur as an agent of change.

A focus on context is the common denominator of the chapters in this volume. Each chapter looks into entrepreneurship as a context-bound phenomenon. No study presents ideas or research results as universally and timelessly valid. In addition, there are other common factors. The contributors all have some form of association with the VU University Amsterdam. Entrepreneurship research at this university takes context as a unifying theme. Another feature is that all of the authors were urged to produce texts that are transparent and accessible, without compromising academic standards.

The book has a common theme, yet at the same time it is highly heterogeneous. Context comes in many shapes and forms—as does entrepreneurship. In order to allow for diversity and demonstrate the multifaceted nature of entrepreneurship in context, the editors did not impose a unifying definition of the key terms. With respect to the term ‘entrepreneurship,’ the various definitions that are in circulation each imply their own context, for example, the context for high-growth or high-tech entrepreneurship differs in many respects from the context for a low-growth, low-tech business. Of all the various possible meanings of the term entrepreneurship (e.g., running a business, starting a business, growth, innovation, opportunity discovery and exploitation), the first two are most frequently used throughout the volume.

As with entrepreneurship, the editors did not impose a particular definition of the term context. Context, as mentioned previously, has various dimensions. The word ‘context’ is derived from the Latin word contexere, which means ‘to weave together,’ where ‘con’ comes from com (together) and ‘text’ from texere (to weave). The original meaning of the word thus emphasizes the relationship between individual parts and the whole and the corresponding holistic nature. Other dimensions refer to the narrow and the wider setting.

This introduction is organized as follows. The next section will give a brief overview of the increasing attention paid to context within entrepreneurship research. The third section will add a number of observations about the various meanings and attributes of context. Then a few of the limitations and dangers of studying entrepreneurship in context are pointed out. Finally, an overview of the volume will be provided and the various chapters will be introduced.

The Increasing Attention Paid To Context

In recent decades, a wide variety of scientific disciplines have started to pay increased attention to context. Some have labeled this as a ‘contextual turn,’ however, Burke (2002) doubts whether this is truly the case because scholars have always paid attention to context. For example, the classical Greeks taught that conduct and rhetoric should be adjusted to the time, place, and type of audience in order to be effective (O’Keefe, 2002).

The increased focus on context may be better understood in relation to the traditions following the Enlightenment and the Scientific Revolution (Shapin, 1996), positivism in particular, which were anticontextual in the sense that participants were concerned with formulating laws of nature and society, generalizations that would be valid whatever the circumstances of time, place, or persons.

In response to these developments, the term ‘context’ expanded in meaning (Burke, 2002). Initially referring to the immediate setting, the term then shifted from the micro context of local circumstances to the macro context of an entire culture, society, or age, including reference to the historical context. In a number of disciplines, in the 1920s and 1930s the term ‘situation’ came to play a central role. These disciplines included sociology, psychology, history, and anthropology. For instance, Karl Mannheim, one of the pioneers of the sociology of knowledge, treated ideas as being socially situated (literally ‘tied to the situation,’ situationsgebunden). In psychology, a ‘field theory’ was put forward by Kurt Lewin. Without studying the field, he argued, the behavior of individuals and groups cannot be understood (Lewin, 1943).

Likewise, during the last few decades there have been several calls for the study of context in entrepreneurship research. Low and MacMillan (1988) defended their early call for including context in the study of entrepreneurship by stating that when mere direct influences on business performance were investigated, it might be overlooked that a factor could function as a ‘success factor’ in one context, but be a ‘fail factor’ in another (see Hmieleski & Ensley (2007) for an example of a contextual examination of new venture performance). Low and MacMillan (1988) also suggested that two factors could combine to be a success factor when studied separately, but that the same two success factors could become a fail factor when joined by a third factor. A configurational approach would therefore be more suitable, an approach that had long been advocated by Miller (1987; 1996).

Aldrich and collaborators (Aldrich & Fiol, 1994; Aldrich & Martinez, 2001; Aldrich & Zimmer, 1986) were also early pioneers of context studies, who focused on the social and institutional contexts of new ventures and new industries. Their work highlighted that these contexts present entrepreneurs with constraints as well as opportunities. In their view, entrepreneurship is embedded in a social context, channeled and facilitated, or constrained and inhibited by people’s position in a social network. Only collective action by entrepreneurs and other stakeholders, such as investors, can help them overcome the ‘liability of newness’ and produce the legitimacy that is needed for the creation of a viable new enterprise. Their work sheds light on the actions that entrepreneurs and their stakeholders should take to develop their firms and industries.

Schoonhoven and Romanelli’s (2001) report on the 2000 Balboa Conference was dedicated to the study of entrepreneurship in context. The epilogue of this edited volume framed the contributions as a response to two broad perspectives. The first, perhaps inspired by Schumpeter, is the so-called ‘lonely wolf myth,’ that entrepreneurs just venture out on their own, combat difficulties, and emerge successful (or not). The second they label as the ‘demand side myth,’ which purports that when the right conditions are set, entrepreneurship is bound to emerge, in other words, that entrepreneurial activity will arise as a function of economic, cultural, technological, and political conditions. Schoonhoven and Romanelli (2001) critique both perspectives and draw attention to the importance of the local and the individual context in determining success. Entrepreneurs cocreate their ventures together with their environments. Neither an innate psychological disposition nor attractive external conditions are sufficient conditions for successful venturing. Both critiqued perspectives disregard the importance of the situational context and, even more important, the necessity for entrepreneurs to work together in a community of stakeholders to achieve success.

The importance of locality is also taken up by studies that explore embeddedness (Dacin, Ventresca, & Beal, 1999). For example, Jack and Anderson (2002) study rural entrepreneurs’ local embeddedness, defined as the nature, depth, and extent of an individual’s ties into the environment. They discovered that the information and resources gathered through being embedded compensated for environmental constraints and facilitated the entrepreneurial process. The authors also concluded that being embedded actually creates opportunities that are unlikely to be available to others who are not embedded.

The streams of literature on effectuation and bricolage study how entrepreneurial actors actually engage with their immediate context. A core theme of the effectuation literature (Sarasvathy, 2001) is that the entrepreneurial process is not a linear one in which a preconceived plan is executed. Rather, entrepreneurship is an iterative process of trial and error in which the entrepreneur improvises with whatever means at hand to achieve his or her goals. The bricolage literature (“making do with what is at hand”; Baker &Nelson, 2005, p. 329) picks up on the same theme. The direct environment is a constantly changing resource with which improvised exchange takes place. Sarasvathy (2004) suggests that it is exactly this interface between the inner and outer environment that is really interesting about entrepreneurship.

The notion of entrepreneurial opportunities as created, and not something ‘out there,’ waiting to be discovered, has also been taken up by social constructionist studies of entrepreneurship. Such studies aim to understand how entrepreneurship is enacted, a social, situated practice (cf. Bruni, Gherardi, & Poggio, 2004), hence taking a microperspective on context. They help gain insight into the complex and social-dynamic processes connected with the creation of legitimacy for a new initiative (cf. De Clercq & Voronov, 2009; Lounsbury & Glynn, 2001), or the processes of entrepreneurial identity formation (cf. Hytti, 2003; Essers, 2008). Their aim is to understand opportunity as a process, rather than a ‘thing’, or sticking to an understanding of opportunity as an endresult of something that is not further specified or scrutinized (see also Korsgaard & Neergaard, 2010). From this point of view, opportunities change as the process evolves, taking other shapes (as well as being shaped by entrepreneurial agents) and thus being different at different times and in different places. By doing so, these studies also add time and space as contextual dimensions of the entrepreneurial process and help provide a more nuanced portrayal of entrepreneurship. This does not portray a merely heroic picture of entrepreneurs as ‘saviors’ of economies.

This brief review shows that the study of entrepreneurship in context can build on previous work within and outside the realm of entrepreneurship research. The next section presents a number of observations about context that are aimed towards contributing to this literature.

Some Observations About Context

Dimensions of Context

Context runs in ever-widening circles because every context has its own context. There is the microcontext of each individual, and that individual lives in a wider context that itself has a wider context, and so forth. Hence the anthropologist Mitchell (1987) speaks of “nested contexts.” A similar idea has been expressed by Lonegan (qtd. in Burke, 2002, p. 175): “The context of the word is the sentence. The context of the sentence is the paragraph. The context of the paragraph is the chapter. The context of the chapter is the book. The context of the book is the author’s opera omnia, his life and times, the state of the question in his day, his problems, prospective readers, scope and aim.” The message is clear: context can be studied at many levels. However, the nature of these levels and their linkages may not always be that clear as in Lonegan’s example. At one extreme, context can be seen as a separable outside entity, whereas at the other extreme, context can be seen as being continuously created by individuals and organizations, and thus being inseparable from the actor involved. Perspectives of context differ depending on one’s philosophical leanings. It also depends on the dimension of context observed.

One common distinction is between the narrow (or micro) context, and the wider setting. The wide and narrow dimensions of context correspond to different focuses. Kurt Lewin (1936) employed the term field as a synonym for an individual or group’s ‘life-space’ or environment. Investigations of the narrow setting (for example, that of locality, the immediate social setting, individual circumstances and conditions), will often reveal how each case is different and unique, and is a required context to analyze extreme cases. At the same time, the study of the microcontext may also uncover principles that apply to a variety of cases (as research on effectuation and bricolage has shown). An investigation of the wider setting (e.g., the historical, institutional, cultural, global context) may reveal communalities between cases that were previously not in focus. At the same time, comparative approaches may reveal differences as well as similarities.

The wider the context, the more difficult it is to influence, at least in the shortterm. Issues that are directly controlled by an individual will not usually be regarded as context, at least not from the individual’s perspective. The immediate social environment will be viewed as something to engage and deal with. When moving to wider contexts (such as the institutional context) it becomes ever harder to perceive this context as changeable. Nevertheless, some entrepreneurs have managed to successfully transform institutions in their role as change agents (cf. Dacin et al., 2002; Munir & Phillips, 2005).

For outside observers, but not for the actors themselves, the microcontext may also include the individual’s preferences, aims, and intentions. Entrepreneurship can take many shapes and forms, and ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright
• Contents
• List of Figures
• List of Tables
• Foreword
• Part I: Introduction
• Part II: Micro-Context
• Part III: Engaging with Context
• Part IV: Entrepreneurship as Context
• Part V: Wider Contextual Influences
• Part VI: Descriptions of Context
• Contributors
• Index