Ideology and ethics of transitional entrepreneurs: legitimacy, soft law, and overcoming a distressed economy

Abstract

PurposeTransitional entrepreneurship in distressed economies is a fairly new concept with respect to new ventures in such challenging economic environments. Formal institutional voids are sometimes held up as a reason for the difficulties present in distressed economies, along with exogenous shocks and other upheavals. In this research, the authors seek to contribute empirically and theoretically as to ways in which formal institutions voids can be filled by a culture developed by transitional entrepreneurs. Indeed, in transition economies, formal institutions need to be enhanced by informal institutions to control corruption and other misbehavior by authorities. Iranian economists emphasize these essential reforms to be able to manage current difficulties, yet top down policies cannot help transitional entrepreneurs benefit from the country’s value-adding cultural heritage to informally address this. To study this, qualitative research methods were used to interpret transitional entrepreneurs’ ideology and ethical routines as the ingredients of a commercial culture that can establish soft law that substitutes for formal institutions. This helps to reduce the disfunctionality of formal institutions in distressed economies.Design/methodology/approachA thematic analysis interviewing key Iranian entrepreneurs and economists is conducted. Also based on an interpretive paradigm, a hermeneutic cycle has been carried out on selected texts. Results have been verified throughout related literature as to come up with a solid synthesized interpreted outcome.FindingsThis paper contributes to theory from a new perspective by discussing transitional entrepreneurship and navigating a distressed economy; in which, ideology and ethics as the ingredients of soft law (Newman and Posner, 2018) are discussed as the base to further develop a commercial culture that fills voids of formal institutions. The formal–informal institutional cycle in distressed economies as the major difficulty entrepreneurs face (Peng and Luo, 2000) is important, because they try to increasingly enhance their move toward a market orientation (Bruton et al., 2008). The authors contribute as to how transitional entrepreneurs can complete this process of adaptation and also the fact that those informal institutions do actually respond to those adaptations. The other contribution is to enrich theories about institutions from the point of view of culture. Knowing these facts helps transitional entrepreneurs, because in distressed communities, formal institutions’ function has an important effect on economic performance (Amorós, 2009). This research’s contributions shed light to help government leaders understand the pros and cons of their actions forced on the industry. As it has been characterized in this research, it can turn in to new formal set of legitimacies (Ahlstrom et al., 2008) to root out corruption and help set the economy on a path to innovation and new venture creation.Originality/valueTransitional entrepreneurs can depend on the less formal cultural-cognitive aspect of ethics and ideology. These entrepreneurs can be working on the burgeoning private sector, who want to connect with the outside effectively to overcome an economy in distress. Transitional entrepreneurs may face governmental institutional intermediaries as a barrier. Formal intermediaries tend to benefit from inefficiencies caused by hierarchal orders and will improve informality in order to overcome difficulties. In this research, institutional theory from the third pillar of the cultural-cognitive sheds light on transitional entrepreneurship in distressed economies, where inquiry is to fill voids of formal institutions as a process of possible linking between new generated soft law derived by beliefs, ideology and professional morality in order to influence (old) legitimacies. The research’s focus evolves on values transitional entrepreneurs utilize to build informal institutions and then impact further on formal institutions to handle distressed communities. This theoretical background expands on subsections to define conceptual building blocks for the study, essential aspects such as individuals as transitional entrepreneurs, the values they utilize to generate soft law, informal institutions and soft law, to manage voids in formal institutions and legitimacy building aspects in policy agenda setting for transitional entrepreneurship in distressed economies.

A Framework for a Hazard Taxonomy to Support Risk Assessment of Tangible Outdoor Heritage

“…In this second evaluation process, 14 papers from RQ2 and 4 from RQ3 were excluded. The SLR made it possible to define indicators and indices to be implemented in the proposed framework [113][114][115][116][117][118][119][120][121][122][123][124][125][126][127]. The corruption risk was distinguished into various se ings, all of which were directly correlated to political instability and to ideological differences that create religious and political tensions, generating a high degree of instability.…”

Transitional entrepreneurship: unleashing entrepreneurial potential across numerous challenging contexts

“…The final two papers illustrate how transitional entrepreneurs contribute to their communities and manage through the challenges of difficult and distressed economies. Khosravi et al (2023) in their paper, titled “ Ideology and ethics of transitional entrepreneurs: Legitimacy, soft law, and overcoming a distressed economy ,” discuss how transitional entrepreneurs help fill formal institutional voids through their contributions to the development of informal business norms. The authors conduct a thematic analysis using interviews with Iranian entrepreneurs and economists to illustrate how transitional entrepreneurs navigate a distressed economy to build a culture (and attract support from government and allied organizations such as banks) that encourages and legitimizes innovation and new venture creation, given the importance of ideas and informal institutions in encouraging entrepreneurship at all levels (cf.…”

“…Whether it is a veteran suffering from post-traumatic stress disorders (PTSD) or an entrepreneur facing social stigma due to their gender, station or prior incarceration, transitional entrepreneurs face significant adversities in launching and running their businesses. See, as examples, Khosravi et al .’s (2023) discussion of entrepreneurs in challenging and isolated environments without supportive institutions and Sun's (2023) description of entrepreneurs navigating difficult circumstances in a refugee camp.…”

“…Despite the challenges facing transitional entrepreneurs (and scholars studying transitional entrepreneurship), we believe it is important to stay resilient. Transitional entrepreneurs have the potential to contribute to economic growth, vitality and important institutional reform in their communities (Khosravi et al , 2023). As they are often found at the margins of society, they possess unique insights for opportunities and challenges in their communities and may also be well positioned to address them (Moghaddam et al , 2017b).…”

Entrepreneurship and entrepreneurial innovation of university students, Amazonas, Peru

“…Then, with the continuous development of social development ne eds and professional growth needs of college students, "innovation and entrepreneurship" education for college students should also be adjusted in a timely manner in terms of educational concepts, models and methods [38][39][40][41]. This is demonstrated by numerous entrepreneurship courses emphasizing skills typically associated with management and business planning [42][43][44]. However, it is suggested that these courses should encompass creative skills, such as receptiveness to change, problem -solving approaches, risk-taking, and particularly teamwork [45,46].…”