Why a Sociologist Studies Entrepreneurship

Why a Sociologist Studies Entrepreneurship
Category: Commentary
Published: June 25, 2014
Updated: July 30, 2020
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When I attend entrepreneurship conferences or give talks at business schools, I’m often asked why an organizational sociologist has an interest in entrepreneurship. I once had a hard time answering them, but I eventually developed an answer. Recently I expanded on that answer in an interview conducted by Cornell University Center for the Study of Economy and Society.

Many of the phenomena that interest organization scholars are actually much easier to study in an entrepreneurial context, where things are fresh, new and small. In large corporate settings, researchers are often overwhelmed by complexity and find it very hard to pin down what is happening.

By contrast, start-ups constitute an instant organizational laboratory with thousands of replications every day. Moreover, the selection logic forming the theoretical core of evolutionary theory shows itself every day as new ventures form and disband.

I use an evolutionary approach in my organization studies because I find it a very helpful framework for approaching the study of entrepreneurship. It is an overarching framework permitting comparison and integration of other social scientific theories.

As a metatheory, it encompasses theories as diverse as population ecology (Hannan and Freeman 1989), new institutionalism (Scott 2008), resource dependence (Pfeffer and Salancik 1978) and transaction cost economics (Williamson 1994). At the heart of evolutionary thinking is the assumption that a struggle by entrepreneurs and organizations to obtain scarce resources, both social and physical, drives evolutionary processes (Aldrich and Ruef 2006). Competition among social actors shapes the struggle to obtain resources ahead of competitors or to avoid competition altogether.

In fact, the primary motivation of many entrepreneurial activities, from marketing to inter-organizational alliances, arises from organizations’ attempts to shield themselves from competitive pressures.

Evolutionary accounts rest on identifying the selecting forces that interact with particular variations to produce organizational and population change. Compared to person-centric accounts, selection arguments can seem maddeningly indirect and impersonal.

Perhaps the most difficult premise to convey is that selection derives from the consequences of actions, not the intentions of actors. Individual differences across actors are clearly still important, as some people are more highly skilled than others at judging, envisioning and reshaping selection environments. Nonetheless, the consequences of action are what count. Because entrepreneurship researchers often overlook this feature of evolutionary models, it bears repeating.

Competitive struggles drive entrepreneurs and organizations to create new strategies, routines and structural elements; to select those elements that prove effective; and to copy or extend those selected elements to other areas. Some of these new elements may require cooperation with other organizations.

Therefore, the dynamics of interactions between organizations and their environments include the processes of variation, selection and retention. Variations in strategies and structures that give units at these levels advantages in extracting resources from their environments will be objects of positive selection.

New types of organizations and organizational forms may emerge when entrepreneurs respond to specific threats and opportunities in their environments; organizations that are efficient at taking advantage of those opportunities and countering those threats tend to survive and be imitated by existing organizations or new entrants.

This whole process is simply much easier to observe when you are looking at new ventures, where thousands of experimental trials occur every month and documentation of their activities is constantly improving.

References

Aldrich, H. E. and M. Ruef (2006). Organizations evolving. London, Sage Publications.

Hannan, M. T. and J. H. Freeman (1989). Organizational Ecology. Cambridge, MA, Harvard University Press.

Pfeffer, J. and G. R. Salancik (1978). The External Control of Organizations: A Resource Dependence Perspective. New York, Harper & Row.

Scott, W. R. (2008). "Approaching Adulthood: the Maturing of Institutional Theory." Theory and Society 37: 427-442.

Williamson, O. E. (1994). Transaction Costs Economics and Organization Theory. The Handbook of Economic Sociology. Williamson, O. E., Ed. Princeton, NJ, Princeton University Press: 77-107


Howard E. Aldrich
Howard E. Aldrich
Kenan Professor of Sociology / Sociology / University of North Carolina at Chapel Hill
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Cite this Article
DOI: 10.17919/X9QG63
Aldrich, Howard E. "Why a Sociologist Studies Entrepreneurship." FamilyBusiness.org. 25 Jun. 2014. Web 8 Nov. 2024 <https://eiexchange.com/content/12-why-a-sociologist-studies-entrepreneurship>.
Aldrich, H. (2014, June 25). Why a sociologist studies entrepreneurship. FamilyBusiness.org. Retrieved November 8, 2024, from https://eiexchange.com/content/12-why-a-sociologist-studies-entrepreneurship


Comments (2)
James Beal
James Beal 2014-06-25 14:25:34
This article challenged my blunt assumption that being an entrepreneur means bringing more fight than flight. After reflection, I agree that I have been in more early stage business planning meetings, where we redefined our market niche not just according to our organizational strengths, but also by where there was an apparent lack of strong competition. This reminds me of the importance of market differentiation as well as choosing a great business location (e.g., not right next to a competitor). It's an interesting point, the idea of avoiding competition versus overcoming it.
Howard E. Aldrich
Howard E. Aldrich 2014-07-01 11:41:04
One of the most amazing discoveries I made, early in my career of interviewing hundreds of small business owners, was how often they answered the question "where are your nearest competitors?" by saying "oh, I don't have any." Whether I was interviewing retail & service businesses in Boston or Bradford (UK), this was a pretty standard answer. I quickly learned to keep my mouth shut, rather than pointing out to them that just around the corner, down the street, or a few blocks away, there was a business selling exactly the same goods/services that they were! Such myopia is one among many reasons why the life of a small business -- to quote Thomas Hobbes -- is often "nasty, brutish, and short."