The Effects of Embeddedness on the Entrepreneurial Process

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DOI: 10.1016/S0883-9026(01)00076-3 · Source: RePEc
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Abstract
This paper uses Giddens' theory of structuration to develop the conception of entrepreneurship as an embedded socio-economic process. The qualitative examination of the actions of rural entrepreneurs finds that embeddedness plays a key role in shaping and sustaining business. Being embedded in the social structure creates opportunity and improves performance. Embedding enabled the entrepreneurs to use the specifics of the environment. Thus, both recognition and realisation of opportunity are conditioned by the entrepreneurs' role in the social structure.
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The effects of embeddedness on the entrepreneurial process
Sarah L. Jack*, Alistair R. Anderson
Centre for Entrepreneurship, Department of Management Studies, Edward Wright Building,
University of Aberdeen, Dunbar Street, Aberdeen, AB24 3QY, UK
Abstract
This paper uses Giddens’ theory of structuration to develop the conception of entrepreneurship as
an embedded socio-economic process. The qualitative examination of the actions of rural
entrepreneurs finds that embeddedness plays a key role in shaping and sustaining business. Being
embedded in the social structure creates opportunity and improves performance. Embedding enabled
the entrepreneurs to use the specifics of the environment. Thus, both recognition and realisation of
opportunity are conditioned by the entrepreneurs’ role in the social structure. D2002 Elsevier Science
Inc. All rights reserved.
Keywords: Entrepreneurship; Social embeddedness; Social context
1. Executive summary
This paper argues that in order to understand entrepreneurship, we need to move away
from considering the entrepreneur in isolation and look at the entrepreneurial process.
Entrepreneurship is not merely an economic process but draws from the social context
which shapes and forms entrepreneurial outcomes. Embedding is the mechanism whereby an
entrepreneur becomes part of the local structure. This enables entrepreneurs to draw upon and
use resources. Indeed, in some instances, being embedded actually created opportunities.
Giddens’ view of structuration is used as a theoretical framework to explore the link
between the entrepreneur (as agent) and the context (as structure). Applying structuration to
the study of entrepreneurship enables us to recognise how social structures affect and
encourage entrepreneurial activity, particularly in terms of resource availability or constraint.
We narrow the concept of structuration to the notion of social embeddedness to explore how
entrepreneurs use structure in the creation and operation of their businesses.
0883-9026/02/$ – see front matter D2002 Elsevier Science Inc. All rights reserved.
PII: S0 8 8 3 - 9 0 2 6 ( 0 1 ) 0 0 076-3
* Corresponding author. Tel.: +44-1224-273-445.
Journal of Business Venturing 17 (2002) 467 487
A qualitative methodology was indicated because our objective was to explore and
understand the relationship. Ethnographic techniques were employed, including triangulation,
to study seven entrepreneurs in local context. Data collection was conducted over a 3-year
period. Open interviews explored the cause and effect relationship of embeddedness and the
entrepreneurial process. Analysis of the data used the constant comparative method, looking
for explanatory themes from the respondents’ own account of their situation.
The research highlights that the entrepreneurial process is value-gathering, but process
cannot be treated in the purely isolated economic sense. It is sustained by, and anchored in,
the social context. The entrepreneurs were all embedded in the local area. Although there was
no common mechanism for embedding and the entrepreneurs had become embedded in
different ways, being embedded was clearly important. Embedding enabled entrepreneurs to
recognise and realise opportunities.
Embedding realised opportunities which ‘‘fitted’’ the specific needs of the local situation.
Embeddedness also created a contextual competitive advantage. Social embeddedness was
found to be a process of becoming part of the structure. However, it is more than simply
developing social networks. Embeddedness involves: understanding the nature of the
structure, enacting or reenacting this structure which forges new ties, and maintaining both
the link and the structure. As a process, this entailed developing credibility and acquiring
knowledge of how business is conducted. In turn this impacted on the entrepreneurs’
activities and influenced the way in which their businesses were established and managed.
The contribution of our research lies in its illustration of how entrepreneurs embed as a
mechanism to pursue and exploit commercial opportunities. Consequently, it emphasises
the social aspect of entrepreneurship, in particular, the existence of socio-economic roles.
The research demonstrates that opportunity recognition and realisation are conditioned by
the dynamics of the entrepreneur and the social structure. Social embeddedness enabled
access to latent resources and resources otherwise not available to the entrepreneur.
Nonetheless, these opportunities were found to exist within the structure but only became
manifest by the action of entrepreneurial agency.
The implications of our research are that it demonstrates the need to understand and
appreciate how the social context influences and impacts upon entrepreneurial activity.
2. Introduction
Embeddedness, identified as the nature, depth, and extent of an individual’s ties into the
environment, has recently been commented upon as a configurating element of general
business process (Whittington, 1992; Uzzi, 1997; Dacin et al., 1999). On the premise that
entrepreneurship is the creation and extraction of value from an environment, being or
becoming embedded must impact upon the entrepreneurial process. This paper considers
embeddedness in an attempt to further our understanding of the entrepreneurial process. A
qualitative approach ethnographically explores the embedding of seven rural entrepreneurs.
Giddens’ (1979, 1984) views on structuration are used as a theoretical framework to explore
the link between the entrepreneur (as agent) and the social context (as structure).
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487468
The findings confirm that the productive information and resources gathered through being
embedded compensated for environmental constraints and facilitated the entrepreneurial
process (Chell and Baines, 2000). In detail we found that in some instances, local knowledge
provided a key factor of profitability. We argue, therefore, that embedding provides a
mechanism for bridging structural holes in resources and for filling information gaps.
Interestingly, we also found that being embedded actually creates opportunities. These
opportunities exist within the local structure but only become manifest by the action of
embedded entrepreneurial agency. This seems important because these opportunities were
unlikely to be available to others not embedded. Entrepreneurial embedding, therefore, creates
a link between the economic and the social spheres. This social bond enables entrepreneurs to
more effectively exploit economic opportunity. The paper’s contribution lies in its illustration
of the importance of the social aspects of entrepreneurship, in particular, the influence and
impact of social context, and the development of a model of embedding which may have
wider application.
3. The relationships between entrepreneurship, structuration, and embeddedness
3.1. Entrepreneurship
The literature highlights the difficulty of defining the terms, entrepreneur and entrepren-
eurship (Gartner, 1988; Carland et al., 1988; Bygrave and Hofer, 1991; Johannisson and
Senneseth, 1993; Rosa and Bowes, 1993). Questions arise about the more traditional methods
used to conceptualise the entrepreneur (Chell, 1985) and problems about perceiving the
entrepreneur as being a separate and distinct entity (Gartner, 1985). These debates suggest
that if entrepreneurship is to be understood, researchers need to direct attention from dealing
with the individual in isolation and examine the process involved in creating new ventures
(Gartner, 1985; Bygrave, 1989; Hofer and Bygrave, 1992; Sarasvathy, 1997).
As a process, entrepreneurship has been described as complex; a contextual event and
the outcome of many influences (Gartner, 1988). Taking the view that entrepreneurship is a
process presents the dynamics of the individual and the context, (from which the business
is drawn and of which the business becomes part) (Gartner, 1985; Scott and Anderson,
1994; Solymossy, 1997). However, a difficulty with studying context is that they vary;
different situational and social variables interact and affect the individual (Cooper and
Dunkelberg, 1981; Aldrich, 1979; Gartner, 1985; Castrogiovanni, 1991, 1996; Sutcliffe,
1994). Nevertheless, the process of entrepreneurship draws from both the individual and the
context (Anderson, 2000). According to Young (1998), economic actions between actors do
not occur in a vacuum but are conditioned by ongoing structures of social relations.
Young’s view is that the social context influences economic outcomes. This view is
supported by a number of other researchers. For example, Aldrich and Zimmer (1986)
remarked that entrepreneurship is embedded in a social context, channelled and facilitated,
or constrained and inhibited by the people’s position in a social network with the
entrepreneur being dependent upon the information and resources provided by social
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 469
networks (Carsrud and Johnson, 1989). Johannisson et al. (1994) illustrate how entrepre-
neurs build networks that blend business and social concerns (Johannisson, 1995, p. 226).
Gibb and Ritchie (1981, p. 193) argued that ‘‘entrepreneurship can be wholly understood in
terms of the different types of situations encountered, and the social groups to which they
relate.’’ Although entrepreneurship may be influenced, and may even arise from within a
social structure, a conceptual difficulty is locating the entrepreneurial actor in the structures
of society, since the foregoing has shown that entrepreneurs cannot be simply treated as
isolated economic agents.
3.2. Structuration
Giddens’ (1984) theory of structuration is well established and offers an approach to deal
with this conceptual difficulty. While little use of Giddens’ work on structuration has been
made within the field of entrepreneurship, his ideas have emerged in the area of management
studies (Whittington, 1992; Dacin et al., 1999). Applying structuration to the study of
entrepreneurship enables us to recognise how social structures affect and encourage
entrepreneurial activity, particularly in terms of resource availability or restraint.
Giddens’ view of structuration deals with the duality of structure and agency. Giddens
accords structure a formative position in social action, but also recognises the agents’
freedom within the structure, a freedom to modify the structure. Giddens (1984, p. 2)
argues, ‘‘in interpretative sociology actions and meanings are accorded primacy in the
explication of human conduct ... for functionalism and structuralism however, structure
has primacy over action.’’ Giddens notes that both conceptions are flawed since
interpretative sociologies are founded on an imperialism of the subject, while function-
alism and stucturalism are founded on an imperialism of the social object, the under-
socialized and oversocialized entrepreneur, respectively. He goes on to point out that
human social activities are recursive, that agents reproduce the conditions that make
these actions possible. Since social systems involve regularised relations of interdepend-
ence between individuals or groups they can best be analysed as recurrent social
practices. Social systems, the situated activities of human objects, exist syntagmatically
in the flow of time. Structures are necessarily the products of systems and are
characterised by the absence of a subject. Embedding mechanisms, however, allows us
to link structure and agency in a dynamic relationship. It is argued here that to
understand entrepreneurship, we must take account of both structure and agency; we
can then appreciate how societal influences shape entrepreneurial agency and how agency
redefines or develops structure.
In this paper, we narrow the concept of structuration to the notion of embeddedness to
explore how entrepreneurs use structure in the creation and operation of their businesses.
We are not testing structuration, but using it as a theoretical approach to explore links
between the entrepreneurial agent and the structure. We are not attempting to develop a
theory of social embeddedness, but are exploring the nature of embeddedness to gain
insight into the entrepreneurial process. This will allow us to probe Staber’s (1998)
perspective that social embeddedness is a variable, and its causes and consequences are
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487470
contingent on circumstances which may be highly space-specific. Our objective is to
identify the types of transactions that occur between the entrepreneur and his/her social
environment (Long, 1977).
3.3. Entrepreneurship and embeddedness
Uzzi (1997, p. 1) argued that research into embeddedness can help to advance under-
standing of how social structure affects economic life. He referred to embeddedness as ‘‘a
puzzle that, once understood, can furnish tools for explicating not only organisational puzzles
but market processes’’ (Uzzi, 1997, p. 22). In principle, the point about embeddedness is that
actors are said to be embedded in concrete, ongoing systems of social relations (Granovetter,
1985). Granovetter (1985) argued that behaviour is so constrained by ongoing social relations
that to construe them as independent is a misunderstanding. As Carsrud and Johnson (1989)
note, the new business development process is strongly affected by social contacts or
linkages, which in fact form the patterns of social interaction. Burt (1992) describes this as
bridging ‘‘structural’’ holes.
Social embeddedness is relevant to entrepreneurship because it helps the entrepreneur
identify social resources, an essential step to founding organisations (Hansen, 1995).
Furthermore, being embedded within the social context means access to more support during
the entrepreneurial process but also a likelihood of increased entrepreneurial activity (Schell
and Davig, 1981). However, embeddedness can also act as a constraint. Uzzi (1997, p. 17)
identified conditions when embeddedness can be turned into a liability, for example, the
unforeseeable exit of a core network player; institutional forces rationalising markets; even
overembeddedness stifling economic action when social aspects of exchange supersede
economic imperatives.
If entrepreneurship is embedded in a social context, then it must involve and draw on
society. These factors may play a role in the way in which value is, and can be, extracted in
terms of resource availability and opportunity perception, thus shaping the entrepreneurial
event. The argument proposed here is that when examining the entrepreneur (i.e., the
individual/or ‘‘agent’’), the context (i.e., the ‘‘structure’’) has to be taken into account, since
the social whole is preeminent over its individual parts (Cassell, 1993). Or to fit this into
entrepreneurial terminology (Gartner, 1985), ‘‘who is the entrepreneur?’’ is indeed the wrong
question. Thus, the extent to which the entrepreneur is socially embedded and how he/she is
embedded (that is to say, their congruence with the structure), will affect their ability to draw
on social and economic resources. This will impact upon the nature of the entrepreneurial
process and influence the entrepreneurial event.
However, while every process of action is a production of something new, at the same
time all actions exist in continuity with the past, which supplies the means of its initiation
(Cassell, 1993). According to structuration theory, in order to enact a social practice,
participants must draw on a set of rules. These rules can also be seen to structure and to
shape the practices they help organise. Agents draw on rules in the enactment of actions,
but the capacity to modify the rule is an ever-present possibility. At each point of structural
reproduction, there is also the potential for change. Hence, our structural analysis should
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 471
penetrate below the level of surface appearances to comprehend both continuity and
change. Again, embedding mechanisms should provide the conceptual tool to comprehend
this dynamic.
The lack of a social theory of the entrepreneur has been recognised as inhibiting our
understanding of entrepreneurship (Sargut, 1999). However, from a synthesis of the literature,
we have produced the following model as a way of conceptualising the relationship between
the entrepreneur and social structure, using structuration as our theoretical orientation and
embeddedness as mechanism.
From the forgoing it appears that embedding is important for entrepreneurs, but that the
mechanisms and nature of embedding are under-researched. In consequence, this research is
concerned with the questions, what is the nature of social embeddedness and how does it
effect the entrepreneurial process?
4. Methodology
4.1. The context
Due to the complexities of the relationship between entrepreneurship, structuration,
and embeddedness, highlighted in Fig. 1, this paper concentrates specifically on one
particular context, the rural, to identify contingent variables. Although rural businesses
have been studied (e.g., Blackburn and Curran, 1993; Keeble et al., 1992), few have
considered the social aspects. A benefit of using rurality as a context is that social
process is easier to observe and social influence is likely to be more transparent
(Anderson and Jack, 2000). To paraphrase Koestler (1964), the smallness of the area
should have made it easy to survey trends, which in other places appear confused and
diluted by size. The particular rural context selected was the Highlands of Scotland,
where an estimated 2000 new businesses were created between 1997 and 1998 (High-
lands and Islands Enterprise, 1998).
Fig. 1. Agency and structure.
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487472
4.2. Methods adopted
Using a qualitative ethnographic approach (Morgan and Smircich, 1980) for data
collection, seven established entrepreneurs were purposefully selected from remote rural
areas (see Table 1 for background details). A qualitative approach was used because we
were dealing with soft issues, which are not amenable to quantification, searching for the
meanings which lie behind actions (Hammersley, 1992). Further, our objectives were related
to understanding, rather than measuring (Oinas, 1999). The data collection was conducted
over a 3-year period, with some respondents being interviewed twice and others several
times. The interviews varied in duration from a couple of hours to many hours while the
direction and the length of interviews were determined by the form of the emerging data.
Ethnographic techniques of open interviews were employed to explore the cause and effect
relationship of embeddedness and the entrepreneurial process. We also gathered rich
information about the history and background of the entrepreneur and the firm from
nonentrepreneurial sources (Denzin, 1979). This material represented a resource for
comparison with, and triangulation of, the emerging research themes. We felt that if we
could reach an understanding of the ‘‘how’’ question, analysis would allow us to address the
broader theoretical issues.
The analysis of the data explored themes in the responses of entrepreneurs using the
constant comparative method (Silverman, 2000) and analytic induction (Glaser and Strauss,
1967). While the entrepreneurs are not representative of the entrepreneurial universe, they do
provide useful data on embedding. The methodological techniques provided sufficient depth
of data to allow a meaningful analysis of the entrepreneurial process in context, to explore
embeddedness, and to gain an in-depth understanding of the role of each respondent. It also
established the level of embedding for each respondent and allowed us to compare this with
perceptions of the local community. Quotes from the data are used to provide valuable
supplements, to add voice to the text, and to help categorise the data (Wolcott, 1990). We also
attempt to link the practices with the background of the respondents, inductively, and
demonstrate veracity by telling a convincing story (Steyaert and Bouwen, 1997).
Our approach is justifiable on a number of counts; our concern for validity and reliability
aided the development of analytic insights (Wiseman, 1979). This reflects Chandler and
Hanks’ (1994) suggestion that longitudinal and qualitative studies are useful methods to
explore the way resource capabilities are developed and environmental opportunities are
identified. Dacin et al. (1999, p. 3) referred to embeddedness research as being charac-
terised by taking on really rich empirical contexts and by getting ‘‘dirty’’ hands (Hirsch
et al., 1990); in qualitative work you try to make sense out of the social world of the
people studied by attempting to reconstruct their view of their world (Wiseman, 1979). We
recognise that these research techniques have some inherent limitations. The study area was
restricted, and the small number of study firms and the methodology employed inhibit
generalisability (Larson, 1992; Chandler and Hanks, 1994). However, the value of the
research design lies in its capacity to provide insights, rich details, and thick descriptions
(Geertz, 1973) to produce a grounded model which can generate hypotheses for further
testing (Larson, 1992).
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 473
Table 1
The entrepreneurs in social context
Business and
year established
Background and
experience prior
to start-up
Locational
relationship
Spouse’s
origin
Spouse’s
participation
Reason for
entrepreneurship
in the rural area
Ian Professional
service — 1981
12 years in professional
services. Established
rural branch office for
employers which he then
purchased.
Rural incomer 1973
(age 28) but intended
to return to city
Moved to the
rural with
husband, Ian
Housewife but with
very active local
connections
Professional and
ambitious, offered
partnership in city
but chose rurality
because of lifestyle
and perceived
opportunity
Anne Clothes retail
outlets — 1987
Marketing qualification
and experience in an
unrelated industry.
Has always lived
in rural
Also local Owns technical
business
Wanted to establish
business and family
(including business
partner) owned several
businesses within the
area, providing local
business knowledge
George Hotel — 1993 5 years in hotel industry Rural incomer 1990
(age 22)
Established
local family
Partner in their hotel Wanted to stay in area
and family familiar
with trade; security
Jane Glass blowing
studio — 1994
Formal qualifications.
Experience of craft
industry; 2 years in
glass blowing studio
Family moved to area
1974 (Jane age 4). Left
for university but
wanted to return.
Moved to the
rural when
Jane returned
Full partner in
business
Wanted to establish
business in the area,
which was seen to be
inspirational for design
and creativity
John Electrical contracting
and retailing — 1993
14 years as an electrician,
employed by an electrical
contractor
Rural incomer 1987
(age 30)
Established
local
Works in business Chose to stay in the
rural area due to
lifestyle and spouse’s
wishes
Peter Construction
company — 1977
Employed by the original
construction company for
15 years as administrator
Born and brought up
locally
Also local Housewife Wanted to stay in the
local area and saw
potential for growth
of activity
Fiona Fruit business — 1993 Qualifications and
experience in
fashion and making
clothes
Family moved to area
1961 (Fiona age 1). Left
to gain qualifications but
anxious to return.
From established
local family
Sometimes works in
business but also has
other business interests
Tried a number of
ventures to allow her
to live locally
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487474
5. Discussion
5.1. The entrepreneurs in social context
Table 1 describes the entrepreneurs, their business and the social context. It shows that the
businesses, previous experience, length of time in the local area and connections varied
among the entrepreneurs. Although Storey (1994) suggests that entrepreneurs tend to start-up
businesses in the same industry in which they had experience, for our respondents, previous
employment was not necessarily related to their own venture. Nevertheless, previous
employment provided background knowledge, experience of working in a business, and
initial contacts. For instance, Anne had no direct experience of the fashion trade (except as a
customer), but general experience had made her acutely aware of the importance of marketing
and customer relations.
Respondents had varying degrees of familiarity with the rural environment. Significantly,
none of the respondents wanted to move from the area, instead their experiences had led to
each respondent locating his/her business in the rural. In spite of the structural limitations
associated with rural business locations (O’Farrell and Hitchens, 1988; Townroe and
Mallalieu, 1993), for these respondents the ‘‘rural’’ was an attraction. So, locational choice
appears to contradict the rationale of profit maximisation, but may represent an optimisation
of all benefits. The table also demonstrates diversity of entrepreneurial motivations. None-
theless, it is clear that all respondents had chosen to develop strong bonds to the local
context. Furthermore, these bonds had influenced the entrepreneur’s decision to establish a
business. The later section attempts to develop this aspect by demonstrating how each
entrepreneur recognised the opportunity, describing its viability and his/her personal
perspectives of entrepreneurship.
5.2. Entrepreneurial process: recognition, viability, and perspectives
Although each business was different and involved a variety of issues and risks, what is
clear from Table 2 is that the ‘‘local,’’ at some level, was important to the entrepreneurial
activity. Moreover, the entrepreneurs attributed local factors to their success. This took the
form of the local providing the inspiration for the venture (Jane) ‘‘a lot of people were
puzzled as to why we moved up ... it’s amazing, you see the Northern lights ... it’s just
brilliant and I wouldn’t want to live anywhere else ... sometimes I wonder if we struggle with
the business just so that we can stay here. Living up here is the most important thing ... I
wouldn’t have wanted to set the business up anywhere else.’’ The local also provided support.
(Peter)‘‘In a rural area you have the advantage that, with no disrespect, you get a better class
of citizens. I always find people brought up in the country are something special and very
dependable, very loyal. The stories I have heard about the Central Belt are absolutely horrid
... horrific ... We employ a lot of people from the local area. They’re very dependable and
loyal.’’ These factors clearly impacted upon the motivation to build a local business. The
entrepreneurs could all have worked and lived elsewhere, but personal and professional
motives influenced their locational decisions. Keeble (1993) refers to the quality of life being
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 475
Table 2
Entrepreneurial process: recognition, viability, and perspectives
Opportunity recognition Location and viability Markets Advantages Disadvantages
Ian Original business
closing but great
potential outside
existing contracts
Minimal capital investment;
liked the area, people liked
Ian, hence customer base
increased through reputation
Initially small but have
now developed in quality
and extent
He enjoys flexibility
and freedom in ‘‘doing
the job’’
Flexibility also means
lack of structure and an
open-ended commitment
Anne Recognition and the
realisation of local
market
potential for a quality
outlet
Organic growth, family
support, intimate local
knowledge turned to
business advantage;
business partner provides
support, business acumen,
and knowledge
Has expanded existing
outlet and developed
another
She and her family
would benefit directly
from her hard work
Does not enjoy people
management and business
maximisation
George Saw potential for
good management
Application of new
marketing and management
Immediate area and
increasingly tourists
Control of own life,
security for family
Long hours away from
young family
Jane Was inspired by
physical environment
and saw possibility
of using this in product
design
Unique creative skills which
were locally supported
60% trade UK and
international; 40% local
Satisfied her need for
autonomy and wish to
live locally
Remoteness for technical
support; she dislikes
managing finance and the
erratic income
John Not really opportunity
originally but emerging
as he became established
Developed reputation
for reliability and
trustworthiness by
association with mentor
Customer pulled expansion,
business changed in nature,
created retail outlet
Directly realises benefits
of his integrity and effort
Overwhelming demands
on time
Peter Offered opportunity to
purchase shares in an
old
established business
with
good reputation
Specific rural area
opportunities, employees
and ability to find
good staff
Joinery and construction in
local market; manufacture
and supply of windows
to UK
Entrepreneurship
provides security for
his family; he controls
his own destiny
Saw no disadvantages
at all
Fiona The opportunity was
suggested to them
Based upon local
knowledge, local
contacts; location enhances
product
Very local market She realised her
determination never to
work for anyone else
Managing volume of
work and hours
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487476
important to people who live in rural areas. For each entrepreneur, moving away from the
area was an unattractive alternative. Perhaps more interestingly, the entrepreneurs all had
recognised that there was an opportunity within the local area and used the local environment.
This supports the views of Smallbone et al. (1993) who point out that opportunity recognition
arises from within rural areas rather than outside. However, the activities also provided
something of real benefit to the local community, which highlights reciprocity. The attraction
of the local environment was not just about producing a local living, but also about adding to
the local.
A further feature highlighted in Table 2 is the variation of markets served. Ian, Anne, Jane,
and Peter’s businesses serve markets beyond the local area. John is gradually expanding
beyond the local area as his reputation grows and expands. The nature of Fiona’s product
means that she specifically deals with the local market. However, such is the demand that
Fiona finds it difficult to keep up with local requirements. George’s reputation has grown
through local customers and tourists. Ian explained, ‘‘it’s just a small local business that
initially was very much based around the main town but now we operate in a 50 mile radius.’
So, although each business was initially established to serve the local market, over time
markets have expanded beyond the immediate local area. This seems to support the notion of
embedding as process over time.
Table 2 also highlights the respondents’ personal perspectives of entrepreneurship.
Although the views of the entrepreneurs illustrated in Table 2 may not be untypical of
entrepreneurs in general, what is interesting is that several indicated that entrepreneurship
would provide security for the family, despite the risks associated with such activity. These
points highlight how entrepreneurial perceptions of risk and uncertainty are moderated by
self-confidence. The perspectives also demonstrate that risk assessment is subjective.
George’s venture was extremely risky since the business had no established customers or
trading record, apart from the bankruptcy of the previous owner! The hotel had been closed
for almost a year and was in a poor state of repair. However, for George, becoming his own
boss reduced the uncertainty, ‘‘I didn’t see it as risky, I knew this place would do well, it was
just a matter of pulling it all together ... the opportunity we had been waiting for ... to build
a secure future for our family.’’ George saw entrepreneurship as providing security for his
family and guaranteeing long-term employment; he was in control. Peter’s venture was also
risky because it involved construction in a small and remote area. Yet, Peter’s interpretation of
the venture was reduced uncertainty because he knew the area and the industry. Anne’s
venture involved substantial capital for stock. With the financial support of her family, she
decided to purchase premises, ‘‘it’s an investment of our time and effort but its for ourselves
and the family isn’t it?’’ Ian had initial contacts and contracts with the local council, but they
were almost complete and new business had to be gained to survive. Ian was fully aware of
this but ‘‘knew’’ the customer base was increasing and could continue to do so. He was aware
of potential but knew this would rely on his skills. Entrepreneurship provided Ian with
flexibility, but at the same time, this flexibility became a disadvantage. Although he could
decide when he wanted to take time off, he worked during evenings and at weekends to
achieve this. Ian’s view was ‘‘at the end of the day the buck stops here.’’ Fiona and Jane saw
establishing their own businesses as the only possible route to autonomy. (Jane) ‘‘There was
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 477
no choice. It was the only thing we wanted to do.’’ Although their ventures required limited
external finance, they had to ensure an immediate market.
Thus, for the entrepreneurs, location provided advantages rather than disadvantages.
However, these were not conventional economic advantages but were more to do with the
social aspects of the area, for example, they knew the area, were known, and had local
contacts to support their activities. The ways in which viability was produced involved social
factors and embeddedness. In a word, their businesses were embedded in the locale. They
drew value from the local structure and in doing so, added to the structure.
5.3. Embeddedness and the process of embedding
All the entrepreneurs were embedded within the local context as Table 3 illustrates.
However, there was no clear pattern to the actions which resulted in embedding. Embedded-
ness had been achieved in different ways and had different implications for the business and
the way it was operated. George and Anne were known through their family ties; they both
had experience and knew the area, which provided them with intimate knowledge; they had
established connections and could call on people. George’s in-laws were familiar with the
hotel trade and could be relied on for support. Anne’s family was unfamiliar with the fashion
industry but had extensive business knowledge, experience and acumen, were well regarded
within the local community and provided both financial and moral support. Anne’s
embedding actions include holding fund-raising fashion shows for the local area, loyalty
cards for local shoppers and keeping her customers up-to-date with new stock. Thus,
customers felt that Anne was genuinely interested in them as individuals.
Ian and John’s situations are particularly interesting. They are not local and yet sought to
embed themselves within the social context in different ways. Ian described how people tend
to belong to one club or the other; they socialise in the same areas in which they work and
live, and frequently with the same people. A quote from Ian helps to clarify this, ‘‘I came
home in a taxi with someone with whom I do business on Saturday night because we both
happened to be at a wedding. But the wedding happened to be the wedding of the son of
another local who we both have to contact through our work. We were both at his daughter’s
wedding as well, but he’s just a guy I work with and got to know through work and through
Round Table we just happened to be at this wedding so you’ll mix your social and your work
very much that way.’
The Company, which originally employed Ian, had suggested that he join various local
clubs and offered to pay his fees. However, he said he would be joining these clubs anyway,
and felt he knew enough about the area to realise that it was important to be seen to pay his
own fees. These clubs provided Ian with a way to become embedded at both a social and a
professional level. Yet, according to Ian, he has never joined anything to develop a business
association. He joined because he was interested in pursuing the social activity. Nevertheless,
he does say that, ‘‘you will develop a business association because you develop a rapport with
people and they get to know you as an individual and on a personal level.’’ Ian argued that if
you join these clubs purely to gain business contacts, this would simply not work in the local
area. Ian insists that the relationships he developed were not fostered to gain information. He
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487478
Table 3
Embeddedness and the process of embedding
Mechanism and nature
of embedding
Embedding
outcomes
Implications
for business
Comments from
local people
Ian Range of social activities,
including joining clubs for
social reasons (not to overtly
develop contacts)
Understood and realised
how business was
conducted — cannot
develop contacts purely
for the sake of business
Business conducted on a
face-to-face basis; no
advertising; unique
marketing opportunity
‘‘does a good job ... works hard
and long hours ... can be trusted’’
Anne Family and being local,
enhanced by community
activities and good customer
relations; business benefits the
local community
People know her; people
trust her
Profitable business expansion ‘she’s doing really well for
herself ... she lets me know
when she has something in.
She always knows what will
suit me’’.
George Through marriage and by
getting to know other people
Strong sense of belonging
with intimate local
knowledge; customer
loyalty
Knowledge of reliability
and creditworthiness;
local knowledge provided
a framework for information
‘‘he’s a good lad ... did a
great job at Wendy’s wedding’
Jane Established local, sharing vision
and ideas for the community
General practical and
moral support from
community; seen to
promote natural beauty
of area
Locals want to see the
business do well because
it celebrates their place;
locals felt a vested interested
‘‘they’re such a nice young
couple ... deserve to do well’’
John Embedded through a ‘‘mentor’
but personalised these ties
Business comes from
word-of-mouth; recognised
how business was
conducted
Business growth; not
price-sensitive; repeat and
regular business through
word-of-mouth
‘‘he’s a nice guy ... will
always help you out’’
Peter Established local; empowered
local employees
Channels to new local
business; understanding
local business context
Known for quality work and
fair employee practices;
because of quality and fair
employee practices is first
choice for potential customers
‘‘he’s a good man and
really fair ... once a Jones
man, always a Jones man’’
Fiona Maintaining local links; using
local labour
Product fits local market;
seen as the local supplier
and worthy of support
Majority of customers are
local; retains these customers
and adds new customers on their
recommendation
‘‘she’s always on the go but
always cheery ... you have to
get into the shop early to get
her fruit. It goes so quickly’’
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 479
described how within a small rural community everyone tends to know everyone else. ‘‘There
is a way of doing business locally which involves being fair, not forcing yourself onto
someone else and not making their acquaintance purely for the sake of generating business
contacts.’’ Business is conducted very differently and on a personal basis. This indicates that
for Ian embedding is not ‘‘extractive,’’ i.e. mining the local context for connections. It seems
to be a reciprocal process of becoming accepted and also learning about and accepting the
local ‘‘rules.’
Similarly, John is not local, but he became embedded in a different way to Ian. Initially,
this was through a local mentor who was well known and highly respected. He took John
under his wing and encouraged people to contact John and because the locals trusted his
judgement, they did so. This helped John to become better known and to develop a customer
base. John also married a local. However, John’s personality and demeanor have also been
important. He is a likeable chap and has always done his best to get on with people by
participating in village events. Clearly, the local community is important to John, ‘‘the people
in the village have been a lot more supportive than ever I thought they would have been ...
they’ve made the business grow and turned it into what it is more than I have really. I may be
in the background stirring things up but certainly they are the main people that it’s all down to
really ... The location, that’s why I wanted to start here, it was needed.’
Peter has always lived in the area. This has helped him to understand and appreciate the
local context. Peter has become both well respected and regarded as an individual, as a
businessman and as an employer. Peter discussed the ways he discovers what is happening
at a local level. He commented on how ‘‘we have an underground in the rural area ... if
there’s something happening someone will know about it. We have contacts in most places
and most departments, which obviously I can’t name.’’ Clearly, this ‘‘underground’’ is
important to Peter and informs his business activities. Peter also uses the knowledge of his
staff and their local social relations, ‘‘to be quite honest I find advertising (for staff) a waste
of time, we do it through personal contacts. All I have got to do is go to the factory and
say to Alan or Martin, I’m needing a couple of guys. They’ll come back to me in a few
days. That’s the way we’ve done it and it always works. But we don’t pinch staff from
other local employers.’’ Thus, Peter is also aware of how his staff can help him realise
opportunities. Moreover, even if the staff comes from another local business, Peter himself
is not actually being seen to ‘‘pinch’’ them. Thus, he retains his reputation and respect at a
professional and an individual level.
6. Interpretation and analysis
6.1. Entrepreneurship and the social context
Although there was no common mechanism for embedding and the entrepreneurs had
become embedded in different ways, being embedded was clearly important. The results of
embedding actions involved gaining and acquiring local knowledge, credibility and resour-
ces. The locals knew the individuals, often referring to them on first name terms. Through
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487480
being embedded, the entrepreneurs seemed to take pride in either being local or becoming
local and all wanted to have a close local relationship. However, this seemed to be at a
personal level rather than through business, each wanted to be recognised as an individual.
This reflected onto their businesses, which were personally associated with the entrepreneurs.
Previous research has shown that an entrepreneurial motivation is the production of prestige
(Anderson and Jack, 2000). However, prestige from the view of the individual entrepreneur
can be relatively superficial. In contrast, being embedded, as the triangulating comments in
Table 3 indicate, suggests a more profound respect for the individual in context. Through
embeddedness, the entrepreneurs also appreciated how business was conducted in the area,
the local rules and opportunities for business activity. John and Ian, being outsiders,
appreciated this more sharply. They had recognised the need to become embedded for two
reasons. Firstly, they realised that business was conducted in a specific way and that
embedding would provide a better understanding of these local rules. Secondly, they
recognised the need for the locals to get to know them as individuals as a precursor to
business links.
Each individual chose to become an entrepreneur by recognising an opportunity within
the local context. Within the entrepreneurial process, the context and the local environment
played an important role. While this does not necessarily differentiate these entrepreneurs
from those in other environments, it is apparent that none of the entrepreneurs wanted to
simply earn a living from rurality but offered some sort of trade-off and local benefit. They
were all providing something which they considered the local community needed and
would be beneficial; but equally they drew upon the locale to support their business. This
goes beyond ‘‘normal’’ business activity. Hence, structure and agency appear to be in a
dynamic relationship.
Each felt that they knew, or could develop knowledge about, the local area. This helped
them understand the market place and its requirements, the labour market and business
opportunities. They knew both the limitations of available resources and the local potential.
This knowledge empowered them with the confidence that the business would work. So
being embedded had specific benefits for the business operation. Two further components,
which the research highlights in the process of embedding, are knowledge and trust:
knowledge about the entrepreneur and trust in them, coupled with knowledge about the
local context.
6.2. Embeddedness and its effect on entrepreneurial activities
Being embedded within the social structure of the area provided the entrepreneurs with
intimate knowledge, contacts, sources of advice, resources, information and support. This
indicates that by being embedded, it was easier to recognise and understand what was
required and available. These perceptions of the entrepreneur, in part developed by the
structure, are important in recognising the business opportunity and potential. The entrepre-
neurs appeared to have a vision which contributed to their success; they convinced others
because they knew their venture would work. But they could only do so by being
contextually aware through embeddedness.
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 481
6.3. The embedding process
We propose the following model as a way of conceptualising the relationship between the
entrepreneur, structuration, and embeddedness. This model builds upon that presented in
Fig. 1 but illustrates how our findings can help understand the relationship. Furthermore, it
views this relationship as a dynamic structure and illustrates the interactive context in which
entrepreneurship occurs.
Fig. 2 highlights that our research has illustrated that identifying entrepreneurial oppor-
tunities occurs within a specific context. However, to identify the opportunity and realise its
potential, the entrepreneur needs to know and understand the context. To do so, the
entrepreneur has to be socially embedded. Social embeddedness enables the entrepreneur
to understand the specifics of the local structure and to achieve the entrepreneurial outcome.
These actions form part of the entrepreneurial process because the entrepreneur is embedded
in the context (i.e. it is the structure which shapes the context). In turn, the structure is
changed by the entrepreneur which forms the raw material for the next round of entrepren-
eurial activity.
6.4. Value extraction and value production
The analysis shows that value is both extracted and produced, and that this is facilitated
through the entrepreneurs’ embeddedness. Value is extracted through the way the entrepren-
eur draws on the environment in establishing and developing the venture, but value is also
produced by the establishment of the venture and grounded in its contribution to the local.
Hence, we see a circular process of embeddedness: drawing from (the local environment) and
giving to (the local environment).
Fig. 2. The structuration of entrepreneurship: structure and agency in a dynamic relationship.
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487482
7. Conclusions
Examining the entrepreneur within the context of rurality illustrates that embeddedness is
an important factor of the entrepreneurial process. The entrepreneurs were all embedded in
the local and this influenced the way in which their businesses were established and managed.
The entrepreneurial process is ongoing and reflects changes in the local context. The
entrepreneurial process is about value-gathering, but this research highlights that it cannot
be treated in the purely economic sense. It needs to be sustained by, and anchored in, the
social context, particularly the local environment. However, while our research highlights the
advantages of social embeddedness, it could also be a disadvantage. Embeddedness involves
relationships, but relationships can be damaging or creative (Johannisson, 1987). For
example, failing to conform to expectations or implicit rules may sour relationships and
become hindrances to business operations. Therefore, the social context does not always
contribute to the venture; social and moral obligations can also constrain.
All seven entrepreneurs illustrate examples of local opportunities, which ‘‘fitted’’ the
specific needs of the local situation. In these instances, they recognised the need
(opportunity) through being embedded, which in turn helped them develop a contextual
competitive advantage. For the entrepreneurs, the appeal of establishing their business was
influenced by social factors; they had family in the area, their children had made good
friends, they liked the way of life and the social side. The opportunities were contextual in
that each required knowledge of the structure of the local context. Embeddedness facilitated
this process and helped to cement the entrepreneurs into the local environment by providing
a way of understanding the structure. Thus, they were able and enabled to recognise and
realise opportunities.
Embeddedness is a process of becoming part of the structure. However, it means more than
simply developing social networks, although it is through these that social endorsement and
acceptance occurs. Embeddedness is a process of becoming part of the structure. The
embedding process is:
understanding the nature of the structure
enacting or reenacting this structure (Johannisson, 1988 and Weick, 1969 refer to this as
‘environment’’) which forges new ties
maintaining both the link and the structure
The evidence suggests that the level of embeddedness in the local environment is
determined by the networks, ties and relationships of the entrepreneur. Thus, social
networks provide the mechanism for becoming embedded. Embedding is a two-way process
of gaining credibility, knowledge and experience. Reciprocity provided the entrepreneurs
with knowledge, contacts and resources, but this was only achieved when the locals knew
the entrepreneurs.
A theoretical construct of structuration is that the future is anchored in the past. That is,
the past sets the conditions for the future but not deterministically. Thus, in the entrepren-
eurial process, the local environment acts as a socio-economic context whereby social
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 483
relationships impact upon economic outcomes. The process of embedding is about establish-
ing those social relationships which enable the entrepreneur to become part of the local
structure. Embedding is a way of joining the structure; by joining the structure one enacts it.
Johannisson et al. (1984) referred to how the personal network can help the entrepreneur to
operationalise a context and its own unique logic — i.e., the values, attitudes, and action
rationales which are taken for granted by the members as vehicles to success —
incomprehensible to outsiders. In Weick’s (1969) terms through understanding this logic
the entrepreneur enacts the environment. In our study, being socially embedded enabled the
entrepreneur to understand the local structure and also become a part of it. Thus, the
entrepreneurs were presented with a unique competitive advantage: social embeddedness
allowed them to become ‘‘a part of the structure.’’ As a consequence, the structure becomes
enabling and is thus a dynamic relationship. Structure does not empower but it can be
characterised as a milieu of opportunities.
We have shown how opportunity recognition and opportunity realisation are conditioned
by the dynamics of the entrepreneur and the social structure. Being socially embedded
enables access to latent resources and resources otherwise not available to the individual
entrepreneur. However, this study shows that in addition to entrepreneurial facilitation, being
embedded creates opportunities. The opportunities exist within the structure and only become
manifest by the action of entrepreneurial agency. Thus, we see how Gidden’s notion of
structuration provides a lucid account of entrepreneurial action and structure. Through
embeddedness, entrepreneurial action converts ‘‘limited’’ resources into a ‘‘rich envir-
onment.’’ Conversely, it can also produce constraints (Anderson and Jack, 2000).
The contribution of our research lies in its illustration of how entrepreneurs embed as a
way to pursue and exploit commercial opportunities. The findings from this study support the
view of Dacin et al. (1999, p. 38) that ‘‘economic rational behaviour is not only grounded in
wider social structures and meaning systems but also generative of change and variation
within these.’’ We would also agree with Uzzi (1997) that we need to understand the
influence and impact of social relationships and embeddedness on economic activity. Our
findings also illustrate the accuracy of Burt’s (1992) structural holes thesis. The entrepren-
eurial application of embedding has been shown to provide the mechanism for bridging these
structural holes.
8. Implications
While this research has demonstrated that entrepreneurship is embedded within a social
context, further research is needed to test the model in other contexts. An implication for
practitioners is the importance of the social context. There are also a number of other areas
for research: the role of social capital as an embedding mechanism (Anderson and Jack,
2000); the extent to which networks provide a mechanism for embedding; the nature of the
entrepreneurs’ search for status within the local environment; the impact of the constraints
of embeddedness, particularly in terms of failure. Our sampling procedure prevents us from
proposing that the more embedded an entrepreneur becomes, the greater the number of
S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487484
opportunities which will arise, but the strengths of the links of our respondents certainly
suggest such a correlation. Clearly, this is worth exploring in future research.
Acknowledgments
An earlier version of this paper was presented at the Ninth Annual Global Entrepreneur-
ship Research Conference, New Orleans, April 1999. We would like to thank Prof. Akihiro
Okumura for his helpful critique of our paper, the reviewers of the Journal of Business
Venturing and our colleagues. We also thank the Carnegie Trust for the Universities of
Scotland who supported some of the research.
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S.L. Jack, A.R. Anderson / Journal of Business Venturing 17 (2002) 467–487 487
  • ... It is therefore surprising that the idea of social embeddedness and its role in business cooperation has not been more broadly applied in tourism research. So far, only a few papers have directly analysed the role of social embeddedness in the tourism sector (Czernek, 2014;Ingram, Roberts, 2000;Jack, Anderson, 2002). In the literature, these social bonds and their role in cooperation are usually stressed with no direct reference to Granovetter's concept. ...
    ... In the literature, these social bonds and their role in cooperation are usually stressed with no direct reference to Granovetter's concept. Frequently the social embeddedness of tourism entrepreneurs has been referred to indirectly by analysing aspects such as: interpersonal relationships (Beritelli, 2011;Jack, Anderson, 2002), communication (Saxena, 2006), trust (Bramwell, Lane, 1999;Czernek, Czakon, 2016;Grangsjo, 2006;Munar, Jacobsen, 2013;Nunkoo, Ramkisson, 2011a, 2011bStrobl, Peters, 2013) the specificity of small and medium sized enterprises (SMEs) (Czernek 2017;Ritchie, Ritchie, 2002), or the asymmetry of power and authority (Nunkoo, Ramkisson, 2011a;Reed, 1997), etc. Moreover, the results presented in the literature often lack a more detailed, thorough analysis of the social context, including the concrete interpersonal relationships of the researched entities. ...
    ... This also refers to empirical works on tourism, where social embeddedness might be of a special significance, as the sector is dominated by SMEs which offer complementary goods and services and often operate in small territories where entities usually know one another (see e.g. Czernek, 2017;Jack and Anderson, 2002;Smith, 2006). Thus, in this case, the establishment of cooperative relationships and the role of the social context appears to be crucial in the process. ...
  • ... Partindo do desenvolvimento teórico-conceitual proposto por Shane e Venkataraman (2000), diversos autores procuraram explorar a temática do processo empreendedor, elaborando conceitos para uma visão processual do empreendedorismo (LEYDEN; LINK, 2015). A noção de processo empreendedor contempla funções, atividades e ações individuais e/ou coletivas voltadas para a identificação de oportunidades e a criação de (novos) negócios como resposta a essas oportunidades (BYGRAVE, 2007;JACK;ANDERSON, 2002). Logo, o processo empreendedor passa a ser interpretado como um processo construído a partir de uma natureza cumulativa de etapas de utilização e exploração de recursos que converge para a criação de um novo empreendimento através de uma ideia, de estudos de viabilidade conceitual do negócio, da delimitação do empreendimento e do início de suas atividades e operações (HABER; REICHEL, 2007). ...
    ... Partindo do desenvolvimento teórico-conceitual proposto por Shane e Venkataraman (2000), diversos autores procuraram explorar a temática do processo empreendedor, elaborando conceitos para uma visão processual do empreendedorismo (LEYDEN; LINK, 2015). A noção de processo empreendedor contempla funções, atividades e ações individuais e/ou coletivas voltadas para a identificação de oportunidades e a criação de (novos) negócios como resposta a essas oportunidades (BYGRAVE, 2007;JACK;ANDERSON, 2002). Logo, o processo empreendedor passa a ser interpretado como um processo construído a partir de uma natureza cumulativa de etapas de utilização e exploração de recursos que converge para a criação de um novo empreendimento através de uma ideia, de estudos de viabilidade conceitual do negócio, da delimitação do empreendimento e do início de suas atividades e operações (HABER; REICHEL, 2007). ...
    ... Portanto, o debate sobre processo empreendedor contempla o nexo entre a ação de indivíduos empreendedores e a estruturação e exploração de oportunidades de negócio (DAVIDSSON, 2015;ECKHARDT;SHANE, 2003;SHANE, 2012). De acordo com essa perspectiva, os empreendedores seriam indivíduos que, orientados por suas ideias e motivações, delimitam processos de criação de negócios através da identificação de oportunidades (JACK; ANDERSON, 2002). Trata-se de valorizar o papel desempenhado por essas motivações na orientação de situações de abertura de empresas (HESSELS; VAN GELDEREN, THURIK, 2008), e de ressaltar os atributos pessoais dos empreendedores nesse processo (NASSIF; GHOBRIL; SILVA, 2010). ...
  • ... The concept of embeddedness is pivotal in understanding the decline and survival of the silver industry. Developed in the context of entrepreneurship studies, the embeddedness perspective is a heuristic device that understands entrepreneurship and small businesses as closely intertwined with their social contexts and institutional environments (Granovetter, 1985;Jack & Anderson, 2002). From an embeddedness perspective, the aim of this paper is to investigate how the owners of Kotagede's silver workshops responded to challenges emerging from crises unfolding between 1996 and 2006, and how decisions taken at the time led to the survival of many individual businesses, but also the demise of the silver industry. ...
    ... In entrepreneurship studies, there is a growing interest in the concept of embeddedness, particularly for research at the intersections of economics, sociology, anthropology, and organization sciences. From an embeddedness perspective, entrepreneurship and small enterprises are understood as contextualized social phenomena (Drakopoulou Dodd & Anderson, 2007;Granovetter, 1985;Jack & Anderson, 2002;Kalantaridis, 2009;Su & Chen, 2017;Swedberg, 2012). Economic activities, the entrepreneurial process, and the entrepreneur are seen as socially embedded, as social relations are considered valuable to firm creation and, "the art of running a business" (Ulhoi, 2005, p. 941). ...
    ... Economic activities, the entrepreneurial process, and the entrepreneur are seen as socially embedded, as social relations are considered valuable to firm creation and, "the art of running a business" (Ulhoi, 2005, p. 941). Such social embeddedness is relevant because it helps the entrepreneur identify the necessary resources for founding a firm (Jack & Anderson, 2002), or further developing the enterprise (Drakopoulou Dodd & Anderson, 2007). In this vein, embeddedness has become an important concept in development literature to consider the resources that networks and institutional environments offer to individuals and organizations (e.g., Su & Chen, 2017;Trupp, 2015). ...
    Article
    Full-text available
    The aim of this paper is to explore ways in which small tourism-based enterprises can offer a crisis-resilient pathway to sustainable development. Based on a mixed-embeddedness framework, this paper explores the multiple strategies that small enterprises in the silver souvenir industry of Kotagede (Yogyakarta, Indonesia) applied to cope with hardship during the Indonesian decade of crisis (1996-2006). The data on which this paper builds stem from qualitative research conducted in Yogyakarta over a time span of 20 years. This paper makes two contributions to the current literature. The first contribution is to offer empirical, longitudinal, primary data on small-firm performances against the background of fluctuations in the tourism industry. The second contribution is conceptual, arguing that an embeddedness approach, sensitive to location-specific characteristics, promises a better understanding of small tourism enterprises as crisis-resilient development path - ways. In doing so, this paper also asserts that small businesses, due to their embeddedness in household economies and subcontracting arrangements that include rural labor, have the capacity to become agents of the United Nation’s Sustainable Development Goals.
  • ... When considering community effects, entrepreneurship literature tends to focus on resources and social networks but often has little to say about how communities might shape the particular resources sought and to what end the resources are employed (Dahl & Sorenson, 2012;Freeman & Audia, 2006;Hernandez, 2014;Jack & Anderson, 2002). While good progress has been made in mapping out how social networks facilitate access to opportunities, knowledge spillovers, and other local resources that new ventures need the focus on resources and networks too often neglects variations of community logics within communities. ...
    ... (Uzzi, 1996;Andersson, Forsgren, and Holm, 2002;Laursen, Masciarelli, and Prencipe, 2012). What our results suggest instead, is that local founders and alliances increase sales-consistent with other studies on embeddedness (Hagedoorn, 2006;Jack & Anderson, 2002;Uzzi, 1996) but that scholars should also take the community into account, as being in a local industry or a rural area can decrease sales as venture seek employment stability. ...
    Conference Paper
    Full-text available
    In this study, we explore how institutional complexity-the existence of conflicting logics-shapes the strategic orientation of new ventures. Drawing on a dataset of Japanese ventures, we explore how firms exhibit strategic orientations associated with stakeholder versus shareholder logics as exhibited by the pursuit of employment growth versus the maximization of performance. In the context of large urban environments where a Western shareholder logic became dominant over the traditional Japanese stakeholder logic, we find that while new ventures tend to embrace the shareholder logic, a variety of initiatives associated with community engagement enable firms to embrace the conflicting stakeholder logic. However, these effects are moderated by the existence of a founder-CEO who is from an urban context where the shareholder logic is dominant. Conceptualizing community engagement and founder habitus as different forms of embeddedness, we show that community engagement does not foster an employment-focused strategic orientation unless aligned with the logics of the founder. We discuss the implications of our findings for scholarship at the interface of institutions and entrepreneurship, and how the content of embeddedness shapes the effects of logics and the strategic orientations of new ventures.
  • ... Specifically, pairwise comparisons revealed that articles that combined mode of opportunities and environments (e.g. Berglund et al., 2016) An article that combined more than two conceptual areas was Jack and Anderson (2002). These scholars examined entrepreneurs, opportunities, and the environment through the lens of Giddens' (1979) structuration theory. ...
    ... Our analysis of the 'opportunities'-themed articles revealed that while some topics like the pursuit of opportunities were covered frequently (e.g. Jack & Anderson, 2002), other topics like moral and ethical dilemmas in opportunity exploitation (e.g. Chung, 2006) received much less consideration. ...
    Article
    Qualitative research is becoming increasingly popular in organizational studies. There is growing consensus that qualitative research contributes positively to the diversity of academic inquiry in entrepreneurship, advancing rich and novel insights about entrepreneurial phenomena. We conduct the first large-scale synthesis of the qualitative entrepreneurship research literature. Based on a sample of 460 articles published across 45 quality journals, we offer an in-depth analysis of the state of qualitative research in entrepreneurship and unearth specific patterns in common practices of published qualitative investigations. Our analysis reveals several potentially fruitful avenues for the continued application of qualitative approaches in entrepreneurship research (e.g. entrepreneur-opportunity nexus). Suggestions on why and how to use qualitative research are provided, and recommendations are offered to guide future qualitative studies to advance better understanding of entrepreneurial phenomena.
  • ... The cultural context has been argued to influence the development of entrepreneurial competences (Drakopoulou & Hynes, 2012;Welter, 2010), but it is also interesting to follow the development of social structures in CEE countries and relate this development to the transformative nature of entrepreneurship. Similarly, it is interesting to explore the view of the social embeddedness of entrepreneurs' behaviours, where the action is hindered or facilitated because of its social context (Jack & Anderson, 2002;Kurczewska et al., 2014). ...
  • ... In effect, improvements that promote the sustained economic vitality of small service firms can advance the environmental quality and well-being of society. In this sense, small service firms represent open systems that are embedded within and that are in continuous interaction with the environment and society in which they operate; they are not isolated business units (see Håkansson & Snehota 2006;Jack & Anderson 2002;Spence, Schmidpeter & Habisch 2003). ...
    Book
    Full-text available
    Sustainable marketing research has made great efforts in exploring ways to integrate customers’ social and environmental concerns into marketing strategy. Although recent developments in the field of stakeholder marketing have contributed to its shift from being customer-oriented to having a broader stakeholder orientation, sustainable marketing continues to be grounded in the basic premises of the marketing concept. In this study, I argue that this new theoretical development has not successfully addressed the two primary limitations of sustainable marketing: namely, its highly reductionist and rational nature. While the former is demonstrated by the belief that sustainability can be both studied and approached from the perspective of individual firms and consumers, the latter is evident in the excessive reliance of sustainable marketing on technical, scientific and managerial expertise to address environmental and social issues. Although several studies have drawn attention to these limitations, few studies have offered alternative approaches to sustainable marketing. In this dissertation, I work towards a theoretical and methodological framework that uses sustainable marketing as a threshold concept to critically evaluate and question the assumptions embedded in both marketing theory and professional practice. Accordingly, I theoretically draw upon relational social constructionism, cultural marketing and critical marketing studies and methodologically on action research. In particular, the multi-stakeholder perspective on sustainable marketing I outline in this dissertation emerges from a link established between the theoretical premises of stakeholder marketing, the relational perspective on stakeholder theory and the market approach to marketing. The framework is illustrated by empirical findings from two action research studies: one focussing on sustainable tourism product development in a small business context and the other focussing on the use of problem-based learning to promote sustainability learning among Masters-level business students. This dissertation makes several contributions. It offers a more comprehensive understanding of sustainable marketing by shifting the analytical focus to (1) the market as a complex web of stakeholder relationships and interactions and (2) sustainability as a set of meanings and moral values that are socially constructed through the discourses and practices available within a particular market context. By theorising sustainability as a social construction, this dissertation contributes to considering sustainability as a cultural meaning that is continuously redefined through complex and dynamic multi-stakeholder relations and to developing a forward-looking understanding of an environmentally enlightened and socially responsible marketing approach. The latter effect is achieved by promoting awareness of the realities of a specific market and encouraging (future) business professionals to challenge those realities and the basic assumptions, discourses and practices that shape them. This dissertation is divided in two parts: Part I (Summary) and Part II (Articles). Part I discusses the theoretical and methodological premises, empirical context and research contributions of this study; Part II includes five articles that have been published in peer-reviewed academic publications.
  • ... Being tightly embedded in a research context allows qualitative researchers to better appreciate how unfolding events are shaped by the temporal, spatial and historical context in which the research object is situated (Bansal et al., 2018). This approach also enables a better understanding of the lived experiences of entrepreneurs and how their interactions play out in context and place (Jack, 2005;Jack & Anderson, 2002;McKeever et al., 2015). Having observed such contextual variation, researchers can then in turn elaborate and refine a theory by specifying how and when variations in context affect entrepreneurial processes and outcomes. ...
    Article
    Full-text available
    This editorial aims to advance the use of qualitative research methods when studying entrepreneurship. First, it outlines four characteristics of the domain of entrepreneurship that qualitative research is uniquely placed to address. In studying these characteristics, we urge researchers to leverage the plurality of different qualitative approaches, including less conventional methods. Second, to help researchers develop high-level theoretical contributions, we point to multiple possible contributions, and highlight how such contributions can be developed through qualitative methods. Thus, we aim to broaden the types of contributions and forms that qualitative entrepreneurship research takes, in ways that move beyond prototypical inductive theory-building.
  • ... Entrepreneurship is a process of extracting and contributing value that is anchored within a community's particular socioeconomic conditions, within which the enterprise is embedded (Colbourne, 2017 ;Jack and Anderson, 2002 ;Kenney and Goe, 2004 ). Community-based entrepreneurial ventures and social entrepreneurs both apply market-based approaches to addressing pressing socioeconomic challenges to initiate social change. ...
    Chapter
    This chapter seeks to examine the role that financial institutions, governments and businesses comprising the entrepreneurial ecosystem play in encouraging or discouraging Indigenous social entrepreneurs. Using stakeholder theory (Freeman, 1984 , 2004 ), social entrepreneurship theory (Anderson, Honig and Peredo, 2006 ; Bornstein and Davis, 2010 ; Dees, 1998 , 2001 ) and stewardship theory (Hernandez, 2008 , 2012 ), we argue that the stakeholders within the mainstream entrepreneurial ecosystem, financial institutions, governments and businesses often fail to properly consider the values of Indigenous peoples and Indigenous social entrepreneurial enterprises. We describe the case of the Hupacasath First Nation’s rejection of the construction of a natural gas plant in their community that resulted in the development of a successful social venture that respected their values, culture and traditions (Sayers and Peredo, 2017 ; Jones, 2007 ). Financial institutions were asked to fund a small run- of- the- river hydro project led by the Hupacasath First Nation in British Columbia that respected the community’s values with respect to the waterways, air and fisheries within their reserve and traditional territories. In the end, the project was rejected by major banks but supported by the community’s own bank, the government of Canada, a government funding agency and a syndicate of credit unions in British Columbia (Jones, 2007 ). Using the lessons learned from this case, we suggest ways in which financial institutions, governments and businesses can improve their assessment of Indigenous social entrepreneurial projects as well as identify future directions for research.
  • ... Here entrepreneurs and their practices-entrepreneuring-are embedded in society (Granovetter 1985;Jack and Anderson 2002). Haugh and Talwar (2016) suggest that the concept of entrepreneuring shifts from considering entrepreneurship as an economic activity that may have social outcomes, to a process with a variety of outcomes. ...
    Article
    We are interested in how morality can be sustained in entrepreneurial practice. We examine the interesting case of the Hutterites, a communal society who practice community entrepreneurship – entrepreneuring by the community and for the community. Arguing that culture provides values and that morals are cultural artefacts – we show how ethics determine the entrepreneurial practices of this remarkably successful entrepreneurial society. Our analysis explains how in this close-knit society, cultural morals and ethics of practice are perfectly aligned, embodied in practice and determine how entrepreneurship is practiced. The result is an economically viable society that preserves its ancient way of life and combines piety and profit. We demonstrate how cultural values shape entrepreneurial practice and how enterprising in this community is a change mechanism, yet also maintains social stability.