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Institutional Theory and Entrepreneurship:
Where Are We Now and Where Do We Need
to Move in the Future?
Bruton, Ahlstrom & Li (2010)
Article Review
Ferran Giones
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Introduction
The article is a review of existing entrepreneurshipliterature
that employs institutional theory, part of aspecial issue in
ET&P.
Article review method
Institutional theory provides lenses to study theimpact on the
industry and in entrepreneurialsuccess of issues such as: culture,
legal environment,tradition and history, and economic
incentives
The use of Institutional Theory in entrepreneurshiphas reached a
saturation point.
It needs an assessment of its contributions andimplications.
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Institutional Theory
Is concerned about how groups and organizations securetheir
positions and legitimacy by conforming to the rules
and norms of the institutional environment (Scott, 2007).
Institution: formal rule sets, ex ante agreements, shared
interaction sequences, taken for granted assumptions that
organizations and individuals are expected to follow.
Three categories of institutional forces:
Regulative: legislation and industrial agreements and
standards.
Normative: values and norms rooted in society.
Cognitive: subjective and constructed rules and meanings
that
limit appropriate beliefs and actions.
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Entrepreneurship and Institutional Theory
Entrepreneurship can be better understood byfinding out what was
institutionalized enabling and
constraining entrepreneurship.
Which activities, beliefs and attitudes have come to
acquire taken-for-granted or rule-like status in
theentrepreneurship environment.
Three streams:
1. The Institutional Setting and Entrepreneurship
2. The Legitimacy and Entrepreneurship
3. Institutional Entrepreneurs
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The Institutional Setting and Entrepreneurship
Institutional environment influence not only in entre rates but
also onthe resulting trajectories of entrepreneurial
initiatives.
Examples of the paperwork to set up a new venture.
The Legitimacy and Entrepreneurship
Organizational structures, procedures and personnel may be used
tobuild and demonstrate an organizations acceptability of
keyconstituencies.
Institutional Entrepreneurs (relevant contribution)
Represents the activities of actors who have an interest in
encouraginga particular institutional arrangement.
Leverage resources to create new institutions or to transform
existingones.
Collective attempts to infuse new beliefs, norms and values into
socialstructures.
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Three problems
1. Different streams of institutional theory:
Socio/organization (legitimacy struggles) vs
economic/politic(governance systems).
2. Focus on culture: influence inconsistent over time.
3. Single country studies: Difficult to assess whether the
impact is applicable to a wide set
of environments or is idiosyncratic from the country sample.
Future directions:
Overcome some of the existent problems. Use larger samples and
spans of time.
Further study the evolution of institutions and its influences
with theindividuals behavior.
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Entrepreneurship and Institutional Theory
