The Rites of Passage of Business Failure: A Socialized Sensemaking Approach

Abstract

Business failure is often described as a Rites of Passage for entrepreneurs. But what does this actually mean? This chapter returns to the original Rites of Passage material, from cultural ethnographers in the early twentieth century. By doing so, the author re-conceptualizes contemporary business failure as the Rites of Business Failure comprising a three-stage transitional process of separation, transition, and incorporation, which has a more socialized and a better understood role in society. Taking a sensemaking perspective, the author portrays the need for greater support for entrepreneurs as they experience business failure and re-establish their life. The author proposes many of the challenges entrepreneurs face over the Rites of Business Failure can be addressed through tailor-made training programs, networks, mentors, and role models which can all be utilized to assist people after the setback of business failure. Theoretically, the chapter contributes to literature on sensemaking and business failure. Practically, it holds implications for policy makers and practicing entrepreneurs.

Citation

Byrne, O. (2021), "The Rites of Passage of Business Failure: A Socialized Sensemaking Approach", Todt, G., Backmann, J. and Weiss, M. (Ed.) Work Life After Failure?: How Employees Bounce Back, Learn, and Recover from Work-Related Setbacks, Emerald Publishing Limited, Leeds, pp. 59-79. https://doi.org/10.1108/978-1-83867-519-620211005