The effects of embeddedness on the entrepreneurial process

Embeddedness is an important factor in theentrepreneurial process. It is argued that, in order to fully understandentrepreneurship, the entrepreneur should not be considered in isolation but aspart of the local structure. Using Giddens' theory of structuration to developthe concept of entrepreneurship as an embedded socio-economic process, it isdetermined that social structures influence and encourage entrepreneurialactivity, especially in terms of resource availability and constraint. Also,embedding offers a way of bridging structural holes in resources and forfilling information gaps. A qualitative methodology is applied, using ethnographic techniques,including triangulation, in order to study seven entrepreneurs in a localcontext. Data are collected over a three-year period, and consist of interviewsinvestigating the cause and effect relation of embeddedness and theentrepreneurial process. To analyze the data, the constant comparative methodis used, looking for explanatory themes in the respondents' accounts of theirindividual situations. The findings suggest that the entrepreneurs were all embedded in the localenvironment, and this influenced the way in which their businesses wereestablished and managed. The evidence also suggests that the level ofembeddedness in the local environment is determined by networks, ties, and therelationships of the entrepreneur. Embeddedness presupposes: (1) understandingthe nature of the structure; (2) enacting or reenacting the structure thatcreates new ties; and (3) maintaining both the link and the structure.Consequently, opportunity recognition and opportunity realization depend on thedynamics of the entrepreneur and the social structure. (CBS)

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