Entrepreneurship at the Margins of Society: Founding Dynamics in Gray (Sex Shops) and Black Markets (Mafia)

Abstract

Institutional theory and organizational ecology have long proposed alternative (albeit not always contradictory) processes to interpret founding and creation of a novel organizational form. Much of the debate has dealt with the issue of how legitimation processes shape such important events or acts. Empirical research on both sides is rich with interesting results, while much of the controversy regards how legitimation is empirically captured and the ways it unfolds over time.

Recently, within organization ecology this specific issue has received increasing attention in the search for a theory of forms and identities. A central piece of the proposed theory links identities to specific audiences or constituencies, both internal and external, which act by attributing legitimation to novel constructions. The new formulation has originated different efforts aimed at better understanding how audiences develop and how they are shaped by wider social movements. Existing research has mainly been dealing with organizations (and forms), which appear to be legitimate (albeit not legitimated) from their inception, benefiting from the generalized acceptance of business organizations in modern societies. Limited attention has been devoted to analyzing contrasted forms, i.e. organized forms of action which act at the border or outside the border of established economic and social action. I contend that it is by analyzing these extreme cases that a clearer interpretation of legitimacy and legitimation processes can be achieved. By analyzing the evolution and the principal dynamics of three populations that are operating in gray and black market, I propose a critique to existing theories of legitimacy.

Citation

Solari, L. (2007), "Entrepreneurship at the Margins of Society: Founding Dynamics in Gray (Sex Shops) and Black Markets (Mafia)", Ruef, M. and Lounsbury, M. (Ed.) The Sociology of Entrepreneurship (Research in the Sociology of Organizations, Vol. 25), Emerald Group Publishing Limited, Leeds, pp. 337-368. https://doi.org/10.1016/S0733-558X(06)25010-9