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A Cross-National Comparison of Incubated Organizations: An Institutional Perspective
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, Business Administration.
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2005 (English)In: International Entrepreneurship / [ed] Dean A. Shepherd & Jerome A. Katz, Emerald Group Publishing Limited, 2005, p. 165-184Chapter in book (Refereed)
Abstract [en]

In the process of starting new ventures, entrepreneurs typically reallocate existing resources to new uses. These resource reallocations challenge the status quo, and are therefore often viewed with suspicion by others (Aldrich & Fiol, 1994). Thus, entrepreneurs need to convince others that the actions required of their new venture are desirable, proper and/or appropriate - they need to gain legitimacy. Institutional theory holds that new ventures have to conform to institutional pressures in order to gain legitimacy. Legitimacy is essential for the new ventures' chances of survival (cf. Aldrich & Auster, 1986; Aldrich, 1999; Stinchcombe, 1965; Singh, Tucker, & House, 1986). For example, a new venture's reputation facilitates its entry into business networks, which enhances growth (Larson, 1992) and an individual's associations with government agencies and community organizations have positive effects on business founding and survival (Baum & Oliver, 1996). Consequently, institutional theory may lead us to expect that those new ventures that adapt most to institutional pressures would have the greatest chances of success. At the same time, entrepreneurship research suggests that new ventures are more prone than established firms to break away from established patterns of behavior. New ventures have become a major source of innovation and the creation of new technologies (Acs & Audretsch, 1990). These creative organizations and new technologies are difficult for established companies to imitate, leading some new ventures toward industry leadership positions (Utterback, 1994), as well as creating wealth for the owners and the society (Birch, 1987; Dahlqvist, 1998; Davidsson, Lindmark, & Olofsson, 1996; Storey, 1994). Thus, there is an unresolved paradox between the findings of entrepreneurship research that new ventures tend to break established patterns; and institutional theory's focus on the need for conformity to rules and legitimacy. However, recent conceptual developments in institutional theory potentially provide us with tools to resolve this paradox. It has been suggested by many institutional theorists that a more diverse image of organizational responses to institutional pressures must be offered (Beckert, 1999; Judge & Zeithaml, 1992; Oliver, 1991). In this chapter, we utilize such an approach. Organizational responses are influenced by the nature of institutional pressures, the congruence between different institutional pressures facing an organization, the coherence between the institutional pressures and the goals and strategies of the organization, and the extent to which different institutional pressures are enforced; as well as by the overall environment the organization is performing in. A repertoire of organizational responses to institutional pressures is thus conceivable (Oliver, 1991). While recent additions to institutional theory may provide insights into how new ventures deal with institutional pressures, little, if any, empirical research has been done that examines how different institutional fields influence strategic options and outcomes. Recent literature has begun to focus on the various aspects of internationalization of new and small businesses (Oviatt & McDougall, 1994; Wright & Ricks, 1994; Westhead, Wright, & Ucbasaran, 2001). Despite some recent efforts for systematic comparisons between countries (Reynolds, Bygrave, Autio, Cox, & Hay, 2002), most entrepreneurship research analyzes new venture creation and entrepreneurship from a micro-level perspective, taking the local or national institutional environment as given. In this study, we argue for a cross-national comparative framework to better understand how responses to institutional pressures influence young organizations in different institutional fields. © 2005 Elsevier Ltd. All rights reserved.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2005. p. 165-184
Series
Advances in Entrepreneurship, Firm Emergence and Growth, ISSN 1074-7540
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-34417DOI: 10.1016/S1074-7540(05)08007-4Scopus ID: 2-s2.0-33645845738ISBN: 0762312068 ISBN: 9780762312061 OAI: oai:DiVA.org:hj-34417DiVA, id: diva2:1231481
Available from: 2018-07-06 Created: 2018-07-06 Last updated: 2018-07-06Bibliographically approved

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Karlsson, TomasHonig, BensonWelter, Friederike

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