Entrepreneurship

by

Ling Yang, Patricia H. Thornton

• LAST REVIEWED: 11 September 2018
• LAST MODIFIED: 30 October 2019
• DOI: 10.1093/obo/9780199756384-0109

Introduction

Entrepreneurship is the process of identifying and developing economic and social opportunities through the efforts of individuals and organizations, which can result in starting and building new businesses, either as independent enterprises or within incumbent organizations. Entrepreneurial opportunities are discovered in markets and organizations; how these opportunities are pursued results in different forms of entrepreneurship, such as independent start-ups, licensing activity, corporate ventures and spin-offs, and nonprofits. Entrepreneurship is therefore an engine of innovation and job creation that results in changing the distribution of wealth and fostering the well-being of individuals and groups in society. The field of entrepreneurship research is composed of interdisciplinary perspectives initially drawing from the social sciences. Because entrepreneurship is inexorably linked to institutional processes and organizational forms, the discipline of sociology has been and still remains central to the development of entrepreneurship research. In the early 21st century, considerable resources have been devoted to the study of entrepreneurship, and this momentum points to an increasing variety of research perspectives. Although this article takes a sociological view, it also includes selected works of authors in the sister social, management, and financial sciences that borrow sociological concepts or that more fully flesh out the relevance of the sociology of entrepreneurship. In keeping with scholarly practice this article strives to include the roots of ideas and theories stemming from the classics, including the initial theoretical formulations and subsequent empirical research, focusing on the mechanisms rather than the phenomena of entrepreneurship.

General Overviews

The field of entrepreneurship has been in the process of developing its own conceptual frameworks to explain and predict empirical phenomena. This has led scholars to produce a variety of partial reviews and programmatic statements of issues, debates, and approaches to the study of entrepreneurship. Thornton 1999 classifies entrepreneurship research into supply- and demand-side perspectives, conceptualizing a duality of the availability of suitable individuals to fulfill entrepreneurial activity (based on factors such as psychological traits), and the structural conditions that influence the number and nature of entrepreneurial roles that need to be filled. Swedberg 2000 highlights the importance of the classics as a foundation for future research. Shane and Venkataraman 2000 asserts that the field of entrepreneurship research should not develop as a stepchild of existing disciplines because each discipline is limited by its own preexisting theories and, hence, selective perceptions and potential biases. The authors of Shane and Venkataraman 2000 won the prestigious Academy of Management Review Decade Award, and Shane 2012 assesses the progress in entrepreneurship research in the years that followed its publication. A ten-chapter edited volume, Ruef and Lounsbury 2007 focuses on a variety of phenomena-based research on the sociology of entrepreneurship. Sorenson and Stuart 2008 suggests that scholars from different disciplines should participate in research to explain phenomena-based research. Carroll and Khessina 2005 argues for an ecological approach to the study of entrepreneurship. Aldrich 2011 expands on the ecological perspective in presenting a collection of essays on the evolutionary approach to entrepreneurship.

• Aldrich, Howard E. 2011. An evolutionary approach to entrepreneurship: Selected essays by Howard E. Aldrich. Cheltenham, UK: Elgar.

  These essays represent Aldrich’s contribution to the literature over the course of his career. Topics covered are an expansion of evolutionary analysis, as applied to entrepreneurship; historical comparative methods; social networks; entrepreneurial teams; the creation of new organizational populations and communities; gender and family; the implications of entrepreneurship for stratification and inequality in modern societies; and future directions for entrepreneurship research.

• Carroll, Glenn R., and Olga M. Khessina. 2005. The ecology of entrepreneurship. In Handbook of entrepreneurship research: Disciplinary perspectives. Edited by Sharon A. Alvarez, Rajshree Agarwal, and Olav Sorenson, 167–200. International Handbooks on Entrepreneurship. New York: Springer.

  To make organizational ecology more accessible to entrepreneurship researchers, Carroll and Khessina suggest a conceptual framework that views “new venture success and failure as a process of the rates of event occurrence: a population founding rate (decomposed into two constituent rates) and an individual organizational mortality rate” (p. 168). They review the organizational ecology literature through the lens of their framework.

• David, Robert J., Wesley D. Sine, and Caroline K. Serra. 2017. Institutional theory and entrepreneurship: Taking stock and moving forward. In The SAGE handbook of organizational institutionalism. Edited by Royston Greenwood, Christine Oliver, Thomas B. Lawrence, and Renate E. Meyer, 671–688. Los Angeles: SAGE.

  DOI: 10.4135/9781446280669.n26

  David, Sine, and Serra discuss how different strands of institutional theory promise a fruitful research agenda for entrepreneurship studies. Regulatory changes, normative expectations, and cognitive beliefs have crucial impact on entrepreneurial opportunity and organizational founding as well as on how entrepreneurs interact with their institutional environment. Entrepreneurs engage in discursive strategies and symbolic actions to shape key stakeholders’ cognitive beliefs. Research on market categories and institutional logics provides new research ideas on entrepreneurship.

• Ruef, Martin, and Michael Lounsbury, eds. 2007. The sociology of entrepreneurship. Research in the Sociology of Organizations 25. Amsterdam: Elsevier JAI.

  This volume includes key topics with articles on entrepreneurship entry, immigrant entrepreneurship and enclaves, academic entrepreneurship, and new organizational forms. It includes chapters by Howard E. Aldrich on self-employed parents and their children, Jesper B. Sorensen on mechanisms of intergenerational transmission of self-employment, Alejandro Portes and Steven Schafer on revisiting the enclave hypothesis, and Jeannette A. Colyvas and Walter W. Powell on academic entrepreneurship in the life sciences.

• Shane, Scott. 2012. Reflections on the 2010 AMR Decade Award: Delivering on the promise of entrepreneurship as a field of research. Academy of Management Review 37.1: 10–20.

  DOI: 10.5465/amr.2011.0078

  Shane and Venkataraman received the 2010 Academy of Management Review Decade Award for the impact of their 2000 article on the field of entrepreneurship. Here, Shane examines which of the arguments in Shane and Venkataraman 2000 accounted for this field impact.

• Shane, Scott, and S. Venkataraman. 2000. The promise of entrepreneurship as a field of research. Academy of Management Review 25.1: 217–226.

  Shane and Venkataraman define entrepreneurship as the nexus of opportunities and individuals. They argue strategic management with its narrower focus on firm performance is not entrepreneurship. Entrepreneurship does not require the existence of firms; can occur before firms are established; exists in settings in which firms may not exist; and, in considering individuals in markets and hierarchies, can take place at lower levels of analysis. Available online for purchase or by subscription.

• Sorenson, Olav, and Toby E. Stuart. 2008. Entrepreneurship: A field of dreams? Academy of Management Annuals 2.1: 517–543.

  Sorenson and Stuart contrast two distinct paths to the establishment of the field of entrepreneurship research: (1) independent field with clear jurisdiction, common theoretical canon, and autonomy from related fields and (2) phenomena-based approach in which scholars participate with different disciplinary lenses. The authors argue for the phenomena-based approach and review discipline-based research in economic and organizational sociology relevant to entrepreneurship. Available online for purchase or by subscription.

• Swedberg, Richard. 2000. Entrepreneurship: The social science view. Oxford Management Readers. Oxford: Oxford Univ. Press.

  This is an anthology of classic essays by social science scholars, such as Joseph A. Schumpeter, Richard von Mises, Alexander Gerschenkron, Kenneth Arrow, and Mark Granovetter, combined with interstitial material to bring practical and scientific knowledge closer together.

• Thornton, Patricia H. 1999. The sociology of entrepreneurship. Annual Review of Sociology 25:19–46.

  DOI: 10.1146/annurev.soc.25.1.19

  This review article focuses on the less-well-developed demand-side perspective, using a sociological perspective, with the goal of identifying areas of entrepreneurship relevant to future research. These areas include the context of organizational founding relative to the activities of markets, hierarchies, the professions, the state, and technological change. Also offers suggestions for integrating supply- and demand-side perspectives. Available online for purchase or by subscription.