The Sociology of Entrepreneurship: Volume 25

The sociology of entrepreneurship is a blossoming field of research, but its scholarly contribution has been critiqued for its lack of coherence and intellectual distance from the sociological mainstream. In this article, we critically examine the theoretical presuppositions of the field, trace its historical origins, and attempt to situate the sociology of entrepreneurship within the sociological canon. We place special emphasis on the contribution of Max Weber, whose early work provides a useful template for a comprehensive approach to understanding the context, process, and effects of entrepreneurial activity. We conclude by locating contemporary approaches to entrepreneurship – including the contributions in this volume – within this neo-Weberian framework.

Using a life course perspective, we develop a theoretical model of how parents can influence their children's propensity to enter self-employment. We draw on the sociological, economic, psychological, and behavioral genetics literatures to develop a model in which parental influence occurs in different ways, depending on someone's stage in their life course. We review and summarize existing findings for parental influences on entrepreneurial entry using a three-part life course framework: childhood, adolescence, and adulthood. We also analyze new data from the Panel Study of Entrepreneurial Dynamics on the extent to which children were involved in their parents’ businesses. From our review, we propose strong effects from genetic inheritances and parenting practice (during childhood); moderate effects from reinforcement of work values and vocational interests (during adolescence); and little influence from financial support but stronger effects from other tangible means of support (during adulthood).

Insights into the origins of entrepreneurial activity are gained through a study of alternative mechanisms implicated in the tendency for children of the self-employed to be substantially more likely than other children to enter into self-employment themselves. I use unique life history data to examine the impact of parental self-employment on the transition to self-employment in Denmark and assess the different mechanisms identified in the literature. The results suggest that parental role modeling is an important source of the transmission of self-employment. However, there is little evidence to suggest that children of the self-employed enter self-employment because they have privileged access to their parent's financial or social capital, or because their parents’ self-employment allows them to develop superior entrepreneurial abilities.

An extensive literature in organizational theory discusses how established organizations shape and maintain their boundaries but offers little guidance as to how organizational boundaries emerge in the first place. This paper examines boundary formation in business startups using a nationally representative dataset of U.S. nascent entrepreneurs. We propose several distinct roles for individuals entering into entrepreneurial activity, distinguishing between “insiders” (owner-managers) who commit both time and financial resources to these startups and “outsiders” (including passive investors and advisors) who offer more limited resource commitments. Two important criteria demarcating organizational insiders and outsiders in emergent organizations are functionality and perceived trustworthiness. Our results suggest that boundary formation is more often based on a potential member's trustworthiness, as perceived by peers, than functionality, emphasizing considerations such as transaction cost minimization and uniqueness of resource contributions. We propose several mechanisms that may account for this result among nascent entrepreneurs, including a lack of economic sophistication, calculative trust, and the importance of social solidarity for founder recruitment.

We review the empirical literature on ethnic economic enclaves after the concept was formulated 25 years ago. The balance of this literature is mixed, but many studies reporting negative conclusions were marred by faulty measurement of the concept. We discuss the original theoretical definition of enclaves, the hypotheses derived from it, and the difficulties in operationalizing them. For evidence, we turn to census data on the location and the immigrant group that gave rise to the concept in the first place – Cubans in Miami. We examine the economic performance of this group, relative to others in this metropolitan area, and in the context of historical changes in its own mode of incorporation. Taking these changes into account, we find that the ethnic enclave had a significant economic payoff for its founders – the earlier waves of Cuban exiles – and for their children, but not for refugees who arrived in the 1980 Mariel exodus and after. Reasons for this disjuncture are examined. Implications of these results for enclave theory and for immigrant entrepreneurship in general are discussed.

Like many other cosmopolitan cities, Washington, DC has a Chinatown, a site of leisure and consumption, based on the commodification and marketing of ethno-cultural diversity. The successful transformation of an ethnic precinct into a tourist attraction depends on supportive economic and social infrastructure as well as on the flourishing of small-businesses, commodifying ethnic features. For sure, this Chinatown does not represent the nodal point of a vibrant community. On the contrary, it is artificially kept alive by city planners and a handful of self-appointed Chinese spokespersons through its inclusion in DC's regulatory structures that strongly support and promote ethnic theming.

We examine the origins, acceptance, and spread of academic entrepreneurship in the biomedical field at Stanford, a university that championed efforts at translating basic science into commercial application. With multiple data sources from 1970 to 2000, we analyze how entrepreneurship became institutionalized, stressing the distinction between factors that promoted such activity and those that sustained it. We address individual attributes, work contexts, and research networks, discerning the multiple influences that supported the commercialization of basic research and contributed to a new academic identity. We demonstrate how entrepreneurship expands from an uncommon undertaking to a venerated practice.

Sociological studies of entrepreneurship focus on social and technical innovations in business. Using an illustration from molecular plant biology and the historical evolution of the term “entrepreneur,” I make a case for the theoretical and methodological importance of studying entrepreneurs and their ventures outside the scope of traditional business. Then, considering the scientific lab as a self-consciously entrepreneurial venture, I use the population of molecular biology labs studying the plant Arabidopsis thaliana to demonstrate a relationship less directly measurable among start-ups in business: diverse sources of funding accompany original activities and ideas within a venture. This is not, however, what predicts lab success. Lab size drives success, but hinders originality. Moreover, I show that established institutions in science are usually the ones that become innovations in business.

How do organizations act as entrepreneurs and what are the outcomes of their innovations? This paper intersects two broad areas of organizational research: the sociology of entrepreneurship and the study of organizational forms. A case study of Kaiser Permanente's role as an institutional entrepreneur in the creation of the health maintenance organization form illuminates the benefits and pitfalls of institutional entrepreneurship – in this case, the act of turning identity into form. Examining organizations as institutional entrepreneurs also raises questions and challenges for future research about both entrepreneurs and models of organizing.

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.