A Theory of Nascent Entrepreneurship and Organization

Abstract

In this paper, we develop a theory and model of organizational founding and the emergence of collective beliefs and strategies. We explicate how collective beliefs, resulting in the formation of new organizations, emerge via three social mechanisms: sorting or matching, interaction, and selection. We specifically highlight how value homophily, social processes, and threshold effects contribute to the actualization (or not) of entrepreneurial beliefs and ideas. Our theory and model highlight not only the emergence of collective beliefs but also the socially interdependent nature of belief realization, choice, and strategy in nascent organizations. Copyright © 2012 John Wiley & Sons, Ltd.

Life course pathways to business start-up

“…These findings, which rely on panel studies, confirm the idea that start-up is a complex and demanding endeavour involving a broad range of activities (Samuelsson and Davidsson 2009) that are resource intensive (Gartner and Shaver 2012). Only rarely do studies relying on panel studies tell us how individuals engage in social settings to accrue the resources necessary to engage in nascent entrepreneurship (Felina and Knudsenb 2012).…”

“…Nevertheless, methodological, empirical and theoretical problems mean that we have limited understanding of the process of business creation, its antecedents and outcomes, but there has been a growing use of panel studies to research the subject (Davidsson and Gordon 2012). Primarily, current panel studies of nascent entrepreneurship focus on gestation activities just prior to and through start-up (Liao, Welsch, and Tan 2005;Honig and Samuelsson 2012;Van Gelderen, Thurik, and Patel 2011); individual characteristics and motivation (Hechavarria, Renko, and Matthews 2012;Renko, Kroeck, and Bullough 2012); human and social capital that supports the start-up process (Davidsson and Honig 2003;Kim, Aldrich, and Keister 2006); particular industries and contexts (Felina and Knudsenb 2012;Mattare, Monahan, and Shah 2011) or a combination of two or more of these (Dimov 2010;Zanakis, Renko, and Bullough 2012). Most of these studies draw on data collected just prior to and through the start-up process (Gartner and Shaver 2012).…”

Industry Choice by Young Entrepreneurs in Different Country Settings: The Role of Human and Financial Capital

“…Institutional economics and transaction cost theory provide important insights on the influence of various conditions on emergence of new organizations (Coase 1937;Felin, Knudsen 2012;Williamson 1981). Environmental factors also influence an entrepreneur's perceived behavioral control thus making it appear more or less possible to actualize a specific business idea in a given context.…”

Valve Corporation: Strategy Tipping Points and Thresholds

“…In conclusion, Valve has created a seemingly dynamic, self-organizing ecosystem where strategies and opportunities emerge endogenously as individuals imagine, interact, and self-select to create projects and joint value. I find the more general principle of strategy tipping points and thresholds -as Thorbjørn Knudsen and I tried to model in the context of entrepreneurship and strategy (Felin & Knudsen, 2012) -to be interesting and worth careful consideration. How individuals "vote with their feet," both within and across organizational settings, is important from a strategic perspective.…”