4. Revisiting social psychology of entrepreneurship: on the

construction of agency(15.11.2010)

Construction of entrepreneurial agency

• Social psychology contributing to the study of

A. how, and if, individuals in different contexts and settings construct entrepreneurial agency for themselves?

B. the nature of entrepreneurial agency in entrepreneurial discourses and representations

.

• I Agency as a perspective to the multiplicity and popularity of entrepreneurship discourses

• II A relational, frame analytical view to agency

• III Two sides of entrepreneurial agency -executive aspect: making it happen -self as principal-other principals

I Agency as a perspective to the multiplicity and popularity of entrepreneurship discourses

• (Small business, SME), entrepreneur, entrepreneurship, enterprise culture, entrepreneurship policy, entrepreneurial orientation (EO), corporate entrepreneurship, intrapreneurship, institutional entrepreneurship, social entrepreneurship, community entrepreneurship, ecological entrepreneurship, ecopreneur, agripreneur, life entrepreneur, spiritual entrepreneur, identity entrepreneur …

• Entrepreneur is (not) a small business owner-manager! Self-evident?

Kent (1984, 2):

• “In entrepreneurship, surprisingly, the political right and left seem to have found a common cause. The political right supports entrepreneurs because of their perceived contribution to innovation and economic growth, and the political left supports entrepreneurship because of belief that the new ventures will create jobs and allow for a reduced concentration of industrial and political power.”

How to make sense of this discoursive multitude?

• Why so popular? • Why so many versions? (Extended to many

contexts? Involving controversies?)• Is there a common nominator? What?• Agency as a point of departure for exploring

these questions

Nicholson. L & Anderson, A.R. (2005) News and Nuances ofthe Entrepreneurial Myth and Metaphor: Linguistic Games inEntrepreneurialSense-Making and Sense-Giving. Entrepreneurship Theory and PracticeVolume 29, Issue 2,

• “The entrepreneurial metaphors portray the agency-fuelled entrepreneur as creator, seducer, aggressor, charmer or savior” (p.168)

• “The entrepreneurial myth stretches to cover the evil wolfishentrepreneur and the supernatural angel-like guru, the successful skyrocket and the community corrupter. However, the extensive range of traits making up the entrepreneurial myth have a common element; agency. Whether as creator, seducer, aggressor, charmer, savior or pursuer, the entrepreneur is always active, rather than the object of someone else’s agency” (163)

II A relational, frame analytical view to agency

• Three aspects of self? (comp. Baumeister) -Reflection: Individual reflects upon her action and agency, on her relations with others, (e.g. identity, self-efficacy)-Relation: individual must relate to others and to the fact that others perceive and define her (e.g. self-presentation, transaction)-Agency: Individual regulates and governs herself, attempts to influence and control her situation and environment (e.g. utilising contacts and networks, managing impressions)

Agency• Mele (2003): Agent = a human being who acts• Wan Har (2006, 3): ” A growing body of studies

has advocated moving responsibility back to the individual to allow for greater control over learning and life processes to reinforce the antecedents of personal agency. Belief in one´s capability to exercise control over one´s level of functioning and environmental demands can exert considerable impact on one´s development and adaptation. (.. Self-efficacy, internal locus of control, independence, self-direction)

Two sides of agency

• Agency as executive function (vs structure; in control not under control; initiative not reactive; origin not pawn; both self-control and control of one’s own condition/life/situation/environment)

• Principal as a perspective to agency (acting for whom or what; serving whom?;

Principal as a frame of the executive function of agency

• Baumeister – Milgram – Reicher • other principals as a means to influence other actors

(“I am doing for your own good”, “I am representing the university”),

• self as principal as a means for other actors to influence the self (“you should want to brush your teeth autonomously”)

• Other principals as a means for other actors to influence the self (“do it for me, please”, “you have my permission”)

III Two sides of entrepreneurial agency

Executive aspect: making it happen: -self-efficacy, personal control,

independency-creation of business; risk, innovation; agent of change,

Sarasvathy 2004, 520:

• “The first thing that leaps out at us when we examine the phrase “Making it happen” is the necessity of agency—the idea that “it, whatever it might be, might not “happen” if it were not for someone making it happen. The second thing is a little more subtle— it points to the rather ambiguous role of the “it” in making it happen. In other words, it is not immediately clear what “it” might be.”

III Two sides of entrepreneurial agency

Self as principal: -utilitarian: profit, money, financial interest,-expressive: achievement, self-expression,

freedom,

III Two sides of entrepreneurial agency

-other principals?

-national economy; local, regional ecomy; global economy; economic development, -community development; institutional development, innovations, competitiveness, -freedom (of markets)

Giddens (2000, 75):

• “Entrepreneurs have received short shrift from both the old left and the neoliberals. The left has seen entrepreneurs as selfishly profit-driven, concerned to extract as much surplus values as possible from the labour force. Neoliberal theory stresses the rationality of competitive markets, where decision-making is driven by market needs. Successful entrepreneurs, however, are innovators, because they spot possibilities that others miss, or take risks others decline, or both. A society that doesn’t encourage entrepreneurial culture won’t generate the economic energy that comes from the most creative ideas. Social and civic entrepreneurs are just as important as those working directly in a market context, since the same drive and creativity are needed in the public sector, and in civil society, as in the economic sphere.”

One aspect of popularity: wide political consensus (right & left) over the importance of

entrepreneurship • Recognition of the contribution of small businesses to

economy -> small business as vehicle for entrepreneurship (New entrepreneurship policy; Thurik & Wennekers 2004, Audretsch 2004)

• -> entrepreneurship something more than small business ownership, namely a mindset, orientation, style of activity, process: pursuit of opportunities, innovativeness, alertness

• Entrepreneurship is the mindset and process to create and develop economic activity by blending risk-taking, creativity and/or innovation with sound management, within a new or an existing organisation (European commission 2003).

Economy and society

• Enterprise culture: the moral debate (Heelas & Morris 1992)

• Entrepreneurship for various purposes; economic as well as social (and others)

• Entrepreneurship as agency of change (in economy and whole society)

Chell 2007: Social Enterprise and Entrepreneurship. Towards a Convergent Theory of the Entrepreneurial Process (ISBJ 25:1)

“There does appear to be more of a consensus that ‘opportunity recognition’ is an entrepreneurial attribute (Gaglio, 1997, 2004; Hills, 1995; Kirzner, 1979, 1985) as is the goal-oriented behaviour that may be summed up in the phrase the ‘creation of something (of value)’. In this way, the ‘creation of something of value’ to a given community or a cause is the possible link to the social enterprise.” (6)

Chell 2007, 6-7“Sociological approaches focus on structure and ‘agentic’ aspects of entrepreneurial behaviour; this has led to consideration of how signals from the environment may infl uence entrepreneurs’ actions and also how they might think about or represent images of those situations to themselves (Thornton, 1999). Not only has social constructionism emerged as an important paradigm in which to understand entrepreneurs but also theoretical constructs like social embeddedness have enabled one to develop insights into the social and structural relations in which entrepreneurs operate(Aldrich and Zimmer, 1986; Granovetter, 1985). Furthermore, sociologists that focus on societal issues have started to consider the relations between business and society and what is needed to reduce fragmentation and begin to knit the frayed structure of society together (Kent and Anderson, 2003). This thinking suggests that theories about entrepreneurs as agents of change and the creation of social as well as material value should enter our theories of entrepreneurship.”

Chell: discourse of enterprise

Many authors have suggested this sense of entrepreneurship; going beyond the technical skills of, for example, business founding – the ability to make fi ne judgements in business and the marketplace, envision opportunities that others cannot and create incredible wealth as a consequence. It is this sense of entrepreneurship that distinguishes the entrepreneur from the owner-manager or life-style business founder (Carland et al., 1984; Chell, 2000; Chell et al, 1991).

Chell 2007, 8“‘Enterprise’, however, appears to have a relatively recent English history to it. The term enterprise was adopted in the 20th century to identify economic zones in depressed areas identifi ed by government for industrial and commercial renewal”

“Here enterprise took on a particular meaning or rather set of meanings, a philosophy and underpinning economic theory – that of the free market. Enterprise culture as an element of Thatcherism was indeed an oxymoron. Enterprise stood for the values of individualism, personal achievement, ambition, striving for excellence, effort, hard work and the assumption of personal responsibility for actions. ‘Culture’ refers to attitudes and values that are socially derived, usually associated with a particular society or civilization.”

Chell 2007, 10• “Since the enterprise culture of the Thatcher era, politically, policies have

moved on. Post-1997, the Labour government has attempted to develop, on the one hand, a culture of science enterprise and, on the other, that of social enterprise. Science enterprise policies have specifi cally been targeted at the UK’s competitive position on the world stage; the underperformance of R&D expenditure in producing innovative products and processes; and, the preference of university-based scientists to pursue ‘blue-sky’ research rather than the development of the applications of technology and the creation of economic wealth (DTI, 1998). The government’s social enterprise strategy, in contrast to its science enterprise policy, attempts to address a ‘wide range of social and environmental issues’; it defines a social enterprise as:

… a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise

profi t for shareholders and owners. (DTI, 2002: 14)”

Chell 2007, 11“The point is that social enterprises may need to make a surplus that will assure their survival, and to do so in the long term they should become entrepreneurial. However, there may be differences in economic and social perspectives of the incumbents working for social enterprises. The culture and ethos of the social enterprise are based on principles of voluntarism, ethical behaviour and a mission with a social cause. This, on the face of it, gives the appearance of a culture clash with the entrepreneurially led, for profi t organization that is based on an employment contract, pragmatism and instrumental actions, with a view to creating shareholder value. Is it possible to reconcile these disparate socio-economic standpoints?”

Chell 2007, 13“If social enterprises are to behave entrepreneurially then arguably we should apply the same defi nition of their entrepreneurial behaviour, as we would to economic enterprises. Taking one particular definition, we would mean that the social enterprise would ‘create and pursue opportunities relentlessly, without regard to alienable resources currently controlled, with a view to both creating wealth that may be reinvested in the business to assure its sustainability, and social value’. This definition, based on the Harvard defi nition of entrepreneurial behaviour (Hart et al., 1995; Stevenson and Jarillo, 1990), raises some issues in respect of social enterprise. The examples where social enterprises operate in a competitive environment suggest that they do need to pursue opportunities. There is though a question over the usage of the term ‘relentlessly’ as this may convey a sense of mindlessness. However, if we mean by relentlessly, ‘persistently, having carefully evaluated the opportunity’, then the need for not only the economic but also the social entrepreneur to be fleet of foot, is clearly apparent.”

Chell 2007, 13

”It is thus possible to apply the same definition to the economic and social entrepreneur in these general behavioural respects. Moreover, we might question the belief that entrepreneurs are driven by pure economic motives. Entrepreneurs are primarily driven by challenges, the funds generated often being viewed as a measure of their success, and many do consider themselves to have mixed motives, including those of attempting to ‘make a difference’ – as they might phrase their pro-social motivation.”

Chell 2007, 16

• “However, our argument suggests that the entrepreneur is able to frame a situation in both an economic and/or social way; the drivers and differential emphases may vary depending upon circumstances such as the primary mission of the enterprise and the ability to make sufficient to sustain the enterprise, reinvest in the business and create stakeholder value.”

Chell 2007, 17-18“Social and community enterprises aim to create social value rather than personal wealth for the leader-manager. Because they have valued social ends, such enterprises have been able to attract grant aid to pump-prime their activity. So is the process of social and community enterprise different from that of a privately owned entrepreneurial venture? Should such businesses necessarily operate differently?”

“Social entrepreneurs within this model have the intellectual capacity, the thought processes and the imagination to recognize opportunity based on their technical and/or professional experience; they have the social and personal networks that add non-material, human and social capital resources; and they have the personal ability to make judgements about appropriate courses of action that will result in the pursuit of an opportunity of socio-economic value based on the realization of a competitive advantage. All business opportunities involve customer choice. Competitive advantage confers rarity or some other socio-economic value that social entrepreneurs can create. In these ways social and community enterprises can become self-sustainable; indeed they can create social and economic change through the development of a vibrant form of doing business.”

• Baumeister, R. F. (1999) The Nature And Structure Of The Self: An Overview. In Baumeister, R. (Ed.) The Self in Social Psychology. Taylor and Francis, Philadelphia.

• Giddens, A. (2000). The third Way and Its Critics. London: Polity Press.

• Kent, C. A. (1984). The Rediscovery of the Entrepreneur. Teoksessa: C. A. Kent (toim.), The Environment for Entrepreneurship (1–19). Lexington, Mass.: Lexington Books.

• Mele, A. (2003) Motivation and Agency. Oxfrod University Press

• Perren, L. & Jennings, P. L. (2005). Government Discourses on Entrepreneurship: Issues of Legitimization, Subjugation, and Power. Entrepreneurship Theory and Practice, 29 (2), 173–184.

• Rose, N. (1992). Governing the enterprising self. Teoksessa: P. Heelas & P. Morris (toim.), The Values of the Enterprise Culture. The Moral Debate (p. 141–164). London: Routledge.

• Sarasvathy, S. D. (2004). Making it happen: Beyond theories of the firm to theories of firm design. Entrepreneurship Theory and Practice, 28 (6), 519–531.

• Van Har, C (2006) Personal agency beliefs in self-regulation.