Sector Choice and Sector Regret

Abstract

Although sector choice theory is improving, we have less understanding of how social entrepreneurs view their sector choices in hindsight, particularly given the various barriers to changing organizational form once a legal entity has been established. This article finds that one in six organizational founders in the fair trade industry regrets their initial sector choice. In addition to defining and examining the prevalence of sector regret, this article also identifies three factors that correlate with the sector preferences of fair trade entrepreneurs postestablishment: general funding and support, the availability of grants, and salary. In other words, money, money, and money. As presaged by Dennis Young in 1983, financial flexibility appears to be a key factor in sector fit. Using semistructured interviews ( n = 46) and a survey ( n = 117), this article examines sector regret and what it tells us about the real differences between the sectors.

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