The impact of trust on social and financial capital acquisition: A resource integration perspective in minority-owned entrepreneurial organisations

Although effective resource integration is a critical requisite for entrepreneurial success, the literature suggests there are crucial gaps for minority entrepreneurs. We examine how interracial distrust (ID), an indicator of the extent to which minority entrepreneurs distrust other races, is related to internal and social capital. We examine the relationships of such capitals on the willingness to borrow from banks and friends, and explore the link with firm performance. Using a sample of 276 primarily African American entrepreneurs, we find support for most of our hypotheses. We find that ID is negatively associated with external social capital and a willingness to borrow from banks. Surprisingly, we found that ID had a negative effect on internal social capital and a willingness to borrow from friends. We also found that internal and external social capital was positively related to firm performance. We discuss the implications of some of these surprising research findings as well as the policy implications.

Engaging symbiotic ecosystems to build community centred business models for the BoP: Evidence from small social enterprises in East Africa

This article examines how small social enterprises (SSEs) in East Africa build business models for base of the pyramid (BoP) markets, through engaging symbiotic ecosystems. Through in-depth qualitative research, a three-stage process is identified. First, SSEs learn and become sensitised to the manifold challenges of building business models for BoP markets. Second, SSEs identify and connect with key BoP actors, weaving them together to create a symbiotic ecosystem and to overcome the aforementioned challenges. Third, SSEs harness this symbiotic ecosystem to deliver community-centred business models for the BoP. This research contributes to social entrepreneurship, small business, and BoP literatures, by shedding light on the challenges faced by SSEs working in the BoP, and through novel elaboration of how SSEs develop and interact with symbiotic ecosystems to surmount these challenges. It also provides important practical insights, for social entrepreneurs and social enterprise managers in Africa and elsewhere.

Everyday social support processes: Household members’ instrumental and emotional support of entrepreneurs

While it is well-established that entrepreneurs benefit from social support, little is known about how and when instrumental and emotional support from household members facilitate entrepreneurial action and persistence. Through a longitudinal, qualitative study, we develop a conceptual framework that shows how social support from the household becomes an integral part of the everyday activities of entrepreneurs. In contrast to the perception of social support as static, our findings illustrate it as a dynamic, ongoing process which is core to business start-up and growth over time. We also challenge the perspectives that households are simply repositories of resources and entrepreneurs passive recipients of support by demonstrating that social support is necessarily interactive, whereby entrepreneurs and households play a collaborative role in entrepreneurship. Finally, we join the debate concerning mechanisms of social support by suggesting that the main effect model and buffering hypothesis are not contradictory, but are instead interdependent.

The influence of the positive affective trait on the willingness to act entrepreneurially: The mediating effect of opportunity evaluation

This article extends previous literature on opportunity evaluation by analysing how positive affect influences opportunity evaluation and the subsequent willingness to act entrepreneurially. We draw on two mediational channels (i.e., the affect-to-affect-to-outcome and affect-to-cognition routes) regarding the influence of affect on positive outcomes upon arguments that opportunity evaluation comprises of the cognitive representations of the focal opportunity and of oneself. Specifically, we analyse the mediating effects of the image of the opportunity and self-efficacy in the relationship between positive affect and the willingness to act entrepreneurially. We test our hypotheses on a sample of nascent entrepreneurs participating in training programmes in six Spanish incubators whom were asked to evaluate their own opportunities. Our findings show that positive affect exerts a positive indirect effect through the image of the opportunity, but do not indicate any mediating effect of self-efficacy. These findings may help entrepreneurs understand the affective subjectivity of their opportunity assessments.

Crisis and arbitrage opportunities: The role of causation, effectuation and entrepreneurial learning

This article examines the process by which entrepreneurs identify and work with an arbitrage opportunity emerging from an episodic crisis. Although prior research has investigated the role of entrepreneurial characteristics and context on opportunity development, the specific manner in which these factors emerge in the course of opportunity development during a crisis remain underexplored. By adopting a qualitative approach grounded in case studies of eight entrepreneurs in the US distillery industry, this article addresses that gap by examining the process of arbitrage opportunity development during COVID-19. Our study reveals the primacy of both causation and effectuation-based entrepreneurial decision logics and the role of double-loop learning, as entrepreneurs interact with the time-compressed duration of the arbitrage opportunity. Implications and insights for entrepreneurs, researchers and policymakers are discussed.

Legitimation work in sustainable entrepreneurship: Sustainability ventures’ journey towards the establishment of major partnerships

Sustainable entrepreneurship, that is, venturing with the aim of contributing to a shift of practices towards environmental and social sustainability, is an increasingly prominent phenomenon. This article investigates how sustainability ventures orient between dual – commercial and environmental – logics when conducting the legitimation work necessary to secure their first major partnership with an incumbent firm. Specifically, we study multiple cases of partnerships on food waste reduction. This setting is characterised by limited tension between the two logics, which implies that ventures are not forced into hybridity. We find some indications that ventures are able to draw on both types of logic to legitimate their ventures. However, the dominant pattern is that sustainability ventures tend to orient their legitimation work around a salient founding logic. Our analysis suggests that this pattern can be attributed partly to organisational imprinting, but also to legitimation work in this context being inherently logic-specific to a significant degree. This seems to be particularly true for ventures with a salient environmental logic.

Interpretation of successful and failed events at entrepreneurial firms: Acknowledgement practice under uncertainty

Event interpretation and acknowledgement drive behaviour and identity formation in organisations. Extant studies exploring this link have focused on large, stable organisations. We extend these studies to entrepreneurial contexts where individual behaviour and organisational identity are especially fluid. We analyse narratives of success and failure in entrepreneurial firms to identify and explore acknowledgement practice, which is the ad-hoc action (or inaction) of organisational actors and groups responding to observed events. We explore how uncertainty affects event interpretation and acknowledgement. Within entrepreneurial contexts, we show that event interpretation and acknowledgement biases influence responses to success and failure. The combination of these biases reveals four broad emergent organisational characteristics, which have important implications for organisational identity.

SMEs and exogenous shocks: A conceptual literature review and forward research agenda

Economic crises, natural disasters, armed conflict and infectious disease outbreaks, amongst others, present interlinked challenges for small businesses and have generated a recent wealth of research across varied fields. Therefore, this article outlines an analytical lens suggesting how SMEs experience shocks and crises that focuses on the interlinked nature of (i) the business, (ii) the shock and (iii) the response within a given context. We thematically draw out key trends, knowledge gaps and tensions and highlight promising research and engagement avenues for future scholarship and practice. We contextualise (i) how small businesses are distinct from large firms in how they experience shock and crisis events; (ii) how different types of crises impact small business; (iii) how shocks and crises shape SME-specific responses and (iv) how the COVID-19 pandemic as a ‘novel exogenous shock’ influences all of the above. We conclude by emphasising emerging knowledge avenues for future small business, shock and crisis research.

Are founder-CEOs resilient to crises? The impact of founder-CEO succession on new firm survival

This article explores whether new firms managed by founder-chief executive officers (CEOs) are more likely to survive than those managed by successor-CEOs in times of crisis. Drawing on the concept of ‘resilience’ to adversity, we argue that founder-CEOs increase the likelihood of new firm survival, especially in times of crisis. Using a sample of Japanese firms founded during the 2003–2010 period, we examine the impact of founder-CEO succession on new firm survival. The analysis shows that new firms managed by founder-CEOs are less likely to liquidate than those managed by successor-CEOs, especially during the 2008–2009 financial crisis. This suggests that founder-CEOs are more resilient to crises than successor-CEOs. In contrast, new firms managed by successor-CEOs are more likely to exit via merger than those managed by founder-CEOs, regardless of macroeconomic conditions. These findings are robust after controlling for the endogeneity of CEO succession.

A sequential relationship between entrepreneurial orientation, human resource management practices, collective organisational engagement and innovation performance of small and medium enterprises

Despite the increasing relevance of entrepreneurial orientation (EO) for innovation performance in the context of small and medium enterprises (SMEs), few studies examine the complexity of the underlying mechanism that explains the relationship between EO and innovation performance. Drawing on the resource-based view (RBV) and signalling theory, we examine an organisation-level model to explain how SME EO predicts innovation performance through human resource management (HRM) practices and collective organisational engagement (COE). We used data collected from 186 human resource managers and 526 employees in SMEs. The results indicate that HRM practices and COE sequentially mediate the relationship between EO and innovation performance. To complement studies that identify an organisation’s micro processes (i.e. employee behaviours as mediators between EO and innovation), this study highlights the need to examine macro processes occurring at the organisation level to account for the EO–innovation performance relationship.