Organizational Roles and Transitions to Entrepreneurship

This paper asks how we can predict entrepreneurship, an individual’s participation in the founding of a new organization. We advance a model that combines aspects of two distinct perspectives on entrepreneurship: the social structural view that sees context as the driving force in new venture formation, and the perspective that each founding is an idiosyncratic event attributable to the charisma of the entrepreneur. We propose that the organizational context of an individual either accelerates or retards the likelihood of entrepreneurship - depending on the individual’s role in the organization. The effects of role hinge, we argue, on the founder’s charismatic identity, and the decoupling of this identity from the organization as it ages and grows. We test our model on a dataset created from responses to a career history survey administered to all alumni of a major U.S. business school. Our findings support the proposition that organizational properties that affect the likelihood of becoming an entrepreneur do so in opposite ways for organizational members and founders. Members of organizations become increasingly unlikely to engage in entrepreneurship as their organization ages and grows. By contrast, as an organization develops, its founder is increasingly likely to leave and start a new venture. We discuss how our theory and results demonstrate the value of a socilogical perspective on entrepreneurship.