Institutional perspectives on entrepreneurship

Abstract

A growing number of entrepreneurship scholars have been arguing for a contextualised perspective on entrepreneurship (Johannisson et al., 2002; Davidsson, 2003; Steyaert and Katz, 2004; Baker et al., 2005; Welter, 2011), to acknowledge the heterogeneity of environment conditions, outcomes and entrepreneurial behaviours. It is important to recognise that entrepreneurship is influenced by external conditions and situations, which can impact upon personal circumstances and individual opportunity recognition. This highlights the social embeddedness of entrepreneurial activity. For example, the motives reported by entrepreneurs for starting and running businesses, which often include reference to 'independence', 'autonomy', and 'self-fulfilment', must be interpreted in the context of the environment in which they are used. Therefore, any analysis of entrepreneurship needs to be grounded in its respective context(s), if it is to accurately reflect the empirical reality because context helps us to understand when, how and why entrepreneurship happens and who becomes involved in it. In this regard, institutional theory is a useful theoretical frame for incorporating context (Hoskisson et al., 2000), because it emphasises the diff erent external political, economic and societal influences on individual behaviour. With regard to entrepreneurship, the institutional context has an impact on the nature, pace of development, extent of entrepreneurship and the way entrepreneurs behave. Institutions represent both constraining and enabling forces, reflecting the boundaries for individual actions.

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