Entrepreneurial Behavior: A Reconceptualization and Extension Based on Identity Theory

• Author: Marc Gruber,Ian C. MacMillan
• Date: 01 September 2017
• Published date: 01 September 2017
• DOI: http://doi.org/10.1002/sej.1262

Entrepreneurial Behavior: A Reconceptualization

and Extension Based on Identity Theory

Marc Gruber

1

*and Ian C. MacMillan

2

1

College of Management of Technology, Ecole Polytechnique Fédérale de

Lausanne, Lausanne, Switzerland

2

The Wharton School, University of Pennsylvania, Philadelphia,

Pennsylvania

Research summary: Entrepreneurial behavior is core to our understanding of entre-

preneurship. Yet, research progress is hindered because most studies adopt a tradi-

tional perspective of the construct that is embedded in economic rationality and

focused on for-profit ventures. Drawing on identity theory, we propose a reconceptua-

lization that emphasizes the “identity relevance”of entrepreneurial behaviors, allows

for different meanings that founders associate with entrepreneurship, and views foun-

ders as behaving in ways that they deem appropriate. Importantly, this perspective

accounts for the behaviors not only of entrepreneurs who start ventures strictly out of

economic self-interest, but also those who launch ventures because of concern for

others—either in their community or in society at large. We elaborate on this argument

and discuss ideas for future research.

Managerial summary: We suggest that a concept of entrepreneurial behavior predi-

cated on the purely rent-seeking entrepreneur ignores the increasing, and increasingly

important, number of entrepreneurs who start enterprises for more than pure economic

rent generation. Using identity theory permits us to parse modern entrepreneurs into

three major types, namely the traditional seeker of rent, the entrepreneur who seeks to

aid the community, and the entrepreneur who seeks to aid society at large. We show

that using an identity perspective on entrepreneurial behavior allows us to explain very

different economic and social outcomes by entrepreneur social identity type and posit

the influence of entrepreneurial types in society on the evolution of a macroeconomic

cycle. Copyright © 2017 Strategic Management Society.

‘Ever more people today have the means to

live, but no meaning to live for.’

–Victor Frankl, The Unheard Cry for

Meaning (Frankl, 2011: 12)

Few constructs in the history of entrepreneurial

thought have enjoyed similar length and level of

scholarly attention as the “entrepreneurial behav-

ior”construct. Going back to the earliest contribu-

tions by Richard Cantillon in the eighteenth

century, numerous studies have sought to advance

understanding of what characterizes entrepreneurial

behavior and, in particular, how it is different from

the behaviors of other actors in the business

world—such as the behaviors of managers in estab-

lished organizations (Gartner, Bird, & Starr, 1992;

Gartner & Carter, 2003). Much of the received lit-

erature on entrepreneurial behavior defines the con-

struct as comprising those behaviors and actions

that are required to start and grow a new organiza-

tion (Bird, Schjoedt, & Baum, 2012), thereby

adopting a perspective of entrepreneurship that is

embedded in economic rationality and focused on

the creation of for-profit ventures—an observation

Keywords: entrepreneurial behavior; identity theory; social

entrepreneurship; appropriate behavior; homo economicus

*Correspondence to: Marc Gruber, Ecole Polytechnique Féd-

érale de Lausanne, Station 5, CH-1015 Lausanne, Switzer-

land. E-mail: marc.gruber@epfl.ch

Copyright © 2017 Strategic Management Society

Strategic Entrepreneurship Journal

Strat. Entrepreneurship J., 11: 271–286 (2017)

Published online 15 September 2017 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/sej.1262

that may not be so surprising given the field’s roots

in economic thought.

Yet, despite significant advances in our under-

standing of the construct and of the important

micro- and macro-level outcomes that are associ-

ated with entrepreneurial behavior (Casson, 2005),

research on the topic has reached an impasse. This

is because entrepreneurial behaviors are often con-

flated with any commercial behavior performed by

entrepreneurs when launching and growing their

ventures (such as performing market studies or

conducting internet searches), which makes it more

difficult to grasp the essence of the phenomenon.

Furthermore, these developments are exacerbated

by the fact that the field of entrepreneurship has,

over the course of the past two decades, extended

in its scope and now encompasses “nontraditional”

firm-creation activities that the founders engage in

and that are not solely for self-reward, but also

couple economic rent generation with the genera-

tion of benefits for others–in other words via social

entrepreneurship activities that “address a social

problem and generate revenues in so doing…pref-

erably net revenues”(MacMillan & Thompson,

2013: xiv). Given that the behaviors of these social

entrepreneurs blend behaviors from different insti-

tutions (Katre & Salipante, 2012) and, in particular,

connote logics that reach beyond traditional cost-

benefit calculus and economic rationality

(Battilana, Sengul, Pache, & Model, 2015; Fau-

chart & Gruber, 2011; Miller, Grimes, McMul-

len, & Vogus, 2012), it has become more difficult

to clearly articulate what are and what are not

entrepreneurial behaviors and, more fundamentally,

to explain when and why entrepreneurs engage in

behaviors that are primarily “other oriented.”

We, thus, believe revisiting the construct and

the very basis on which it has been founded is

required. In this article, we propose that an identity

perspective—in particular, insights offered by

social identity theory and role identity theory

(cf. Stets & Burke, 2000)—can help scholars in

their quest to better understand entrepreneurial

behavior. An identity perspective allows one to

move beyond traditional views embedded in eco-

nomic rationality when seeking to understand

entrepreneurial behavior because it emphasizes that

people behave and act in ways that they deem

appropriate for themselves in a particular context

(such as new firm creation). Notably, because an

individual’s identity or sense of self is crucial to

his/her values, feelings, and beliefs and because

individuals strive to behave and act in ways that

are consistent with the meanings inherent in their

identity (Hogg & Terry, 2000), identity theory is

able to establish a key theoretical link between the

entrepreneur’s identity and his/her behaviors in

new firm creation. In other words, an identity per-

spective views behaviors as being “identity rele-

vant”and related to the self-worth people seek to

obtain from becoming firm founders. A set of

recent publications (Fauchart & Gruber, 2011;

Murnieks & Mosakowski, 2007; Powell & Baker,

2014, 2017; Wry & York, 2017) has applied an

identity perspective to shed light on different entre-

preneurial phenomena. This emerging body of

work offers important initial evidence on how

founder identities are linked to behaviors, actions,

and decisions in new firm creation.

In the following, we briefly review the tradi-

tional view on entrepreneurial behavior that has

dominated research on the topic. We then discuss

how an identity perspective can advance research

on entrepreneurial behavior and present several

promising avenues for future research. We con-

clude by showing how an identity perspective not

only complements, but can also (on occasion)

substitute for traditional perspectives on entrepre-

neurial behavior. From a broader perspective, our

work contributes to a rising movement to adopt a

wider view of value creation via entrepreneurial

action, one that encompasses other types of

values such as personal satisfaction, contentment,

social welfare, or sustainability (e.g., Amit, Mac-

Crimmon, Zietsma, & Oesch, 2001; Cooper &

Artz, 1995; Dean & McMullen, 2007; Patzelt &

Shepherd, 2011). This movement is also evident

in the management literature, where social out-

comes have received increased attention in recent

years (e.g., Grant, 2007, 2012; Grant, Dutton, &

Rosso, 2008).

Traditional Perspectives on

Entrepreneurial Behavior

Behavior is a broad concept. According to the

Merriam-Webster dictionary, behavior is defined as

“anything that an organism does involving action

and response to stimulation”(Merriam-Webster,

2017). This broad understanding is also evident in

existing definitions of the “entrepreneurial behavior”

272 M. Gruber and I. C. MacMillan

Copyright © 2017 Strategic Management Society Strat. Entrepreneurship J., 11: 271–286 (2017)

DOI: 10.1002/sej.1262