Knowledge that Transforms

Research Summary Entrepreneurs make critical decisions in uncertain environments where information is limited, outcomes are difficult to predict, and multiple goals often compete. Yet, existing research offers scattered insights into how entrepreneurs dynamically adapt to such contexts and how their decisions are shaped by behavioral and cognitive foundations such as judgment, intuition, and experience. We shed light on these phenomena by exploring how decision‐making is influenced by factors at multiple levels, from individual traits and family dynamics to team interactions and organizational structures. A key aspect of our inquiry focuses on how entrepreneurs manage uncertainty by balancing economic goals, such as growth and profitability, with non‐economic objectives like social impact, sustainability, or knowledge advancement. By integrating these perspectives, this work offers a conceptual framework that connects antecedents, processes, and outcomes of entrepreneurial decision‐making under uncertainty and competing goals, providing a promising roadmap for future research. Managerial Summary Entrepreneurs often make decisions in uncertain environments, where they must contend with limited information and competing goals. This work explores how entrepreneurs balance economic objectives, such as profit, with non‐economic ones, like satisfying various stakeholders, achieving social impact, and sustainability. It highlights the role of individual, family, team, and organizational factors in shaping these decisions, offering novel insights into how entrepreneurs can manage trade‐offs, adapt feedback‐based strategies, and recalibrate priorities over time. For owners, managers, and business leaders, understanding these dynamics can lead to better decision‐making, improved risk management, enhanced strategic alignment, increased innovation, and a more balanced approach to growth.

Research Summary Entrepreneurs use strategic framing to gain support for their novel ventures, products, and services. A key challenge entrepreneurs face is that audiences often contest frames that introduce novel ideas, especially when these ideas disrupt audiences' mental and business models. Such contestation can hinder novel ideas from being accepted, a risk that is amplified when entrepreneurs face contestation from multiple audiences. We lack understanding, however, of how contestation from multiple audiences shapes the strategic framing of novel ideas. We study this question at Tony's Chocolonely, a social enterprise that faced such contestation when introducing “slave‐free” chocolate. By showing how the social enterprise reacted to contestation from multiple audiences in different ways, we uncover novel mechanisms of frame change and stability. Managerial Summary Entrepreneurs use strategic framing to gain support for their novel ideas, products, and services. In so doing, they must navigate resistance from different audiences, especially when entrepreneurs introduce novel ideas that disrupt the status quo. Audience resistance can hinder novel ideas from gaining momentum. We do not know, however, how entrepreneurs can navigate resistance from multiple audiences. Our study examines how Tony's Chocolonely, a social enterprise fighting child labor in the chocolate industry, navigated resistance against its “slave‐free” chocolate from diverse audiences. Our study reveals novel insights into how audience resistance shapes entrepreneurs' strategic framing of novel ideas.

Research Summary This research investigates how corporate entrepreneurs' emotional reactions to the business impact of a crisis interact with psychological climates to drive engagement in opportunity formation. Drawing on affective events theory and psychological climate theory, we posit that positive emotional reactions increase engagement in opportunity formation when the psychological climate for initiative is strong, and negative emotional reactions increase engagement when the psychological climate for psychological safety is strong. Conversely, these relationships become negative when these climates are weak. An analysis of data from an eight‐wave longitudinal investigation involving 126 corporate entrepreneurs supports our predictions. By uncovering how corporate entrepreneurs' emotional reactions interact with climates for initiative and psychological safety, we illuminate the affective foundations of opportunity formation and show how organizations can foster climates that channel emotions into entrepreneurial action. Managerial Summary This study examines how corporate entrepreneurs' emotional reactions to crises interact with psychological climates to shape entrepreneurial actions. Our findings demonstrate that organizations should cultivate climates characterized by high personal initiative and psychological safety among middle managers. Managers' perceptions of such climates effectively harness both positive and negative emotional reactions for productive entrepreneurial actions, thereby facilitating corporate entrepreneurship. These insights are particularly marked for firms in disrupted industries, where conventional business approaches become obsolete in a crisis. Absent such organizational climates, managers' emotional reactions can discourage them from taking initiative on new opportunities, making it more difficult for the organization to transform and adapt.

Research Summary Different types of affective climates—norms related to the experience, expression, use, and regulation of emotions—have been shown to impact organizational outcomes. However, we know less about how these climates emerge. This study investigates the emergence of affective climates through a 22‐month longitudinal multiple‐case study of five early‐stage start‐ups. Our analysis revealed that an affective climate of high authenticity emerged in start‐ups through three key mechanisms: the interaction between positive and negative emotions, constructive meta‐emotions, and interpersonal emotion regulation characterized by emotional validation and problem‐solving. Our findings contribute to the understanding of affective climate emergence and offer nuanced insights into how founders, managers, and teams can cultivate constructive emotional dynamics in highly uncertain, fast‐paced environments. Managerial Summary We explore how affective climate emerges through a longitudinal case study of five start‐ups. Affective climate describes norms and assumptions concerning the experience, expression, use, and regulation of emotions. Research suggests that an affective climate of high authenticity—meaning that members feel free to express their actual emotions—contributes to creativity and performance while reducing burnout. However, prior research offers few insights into how and why different affective climates emerge in start‐ups. We find that managers and founders may shape their organization's affective climate toward high authenticity by fostering positive emotions, through an accepting attitude toward their own negative emotions, and by validating employees' emotions. By doing so, managers and founders can foster healthy emotional dynamics in their start‐ups.

Research Abstract We study how providing knowledge about “how to do entrepreneurship” influences women's pre‐entry decision to enroll in micro‐entrepreneurship training in poverty settings. We carry out a field experiment study with unemployed women in rural India, randomly exposing them to “founding templates” that depict simple and replicable business set‐ups and practices. We find that exposure to founding templates, especially those that exemplify social support rather than self‐dependence, significantly increases women's sign‐ups to entrepreneurship training. We also find that increased sign‐ups are accompanied by enhanced perceived ease of starting a business. These results shed light on what motivates women in the pre‐entry stage and offer insights on how to increase enrolment, ultimately broadening women's participation in entrepreneurship in poverty contexts. Managerial Abstract Micro‐entrepreneurship training is a widely used intervention to support women's participation in entrepreneurship in poverty settings. While existing research predominantly focuses on assessing the impact of such interventions, we ask when women are motivated to sign up for training in the first place. Our study involved a full‐day information workshop, targeting unemployed women in rural India and providing them with frameworks and practical examples of replicable business setups and practices. Results indicate that access to templates, especially those that exemplify social support rather than self‐dependence, significantly boosts women's confidence and motivation to consider entrepreneurship as a viable option. We thus identify a key institutional lever for broadening the funnel of women's entry into training and entrepreneurship.

Research Summary Building on prior research about the heterogeneous impact of labor shocks on individuals' propensity to start businesses, we explore how local labor market frictions affect individuals' selection into platform‐based entrepreneurship. Combining detailed data from a large online retail platform with sectoral employment statistics across labor market areas in the United States, we show that entrepreneurs entering the platform during larger local employment declines in related sectors developed more effective customer strategies and maintained stronger sales performance. These entrepreneurs focused more on customer appeal, matched social media channels with the platform's predominant user base, and lowered prices over time. Managerial Summary This article examines how local labor market frictions in sectors relevant to a digital platform shape the heterogeneous entry of individuals into platform‐based entrepreneurship—a class of entrepreneurship that became popular with “creator economy” business models where individuals rely on digital infrastructures to access potential customers and monetize their creative labor. We find that entrepreneurs who started platform‐based businesses in deteriorating local employment conditions generated significantly higher sales by being more attuned to customers' needs and wants. We show that these entrepreneurs emphasized customer‐related activities, chose more effective social media channels, and set lower prices after operating for a few periods. Our findings highlight the importance of customer‐related competitive advantages in platform‐based entrepreneurship.

Research Summary Extant studies suggest that a particular set of means, once in place, prompt entrepreneurs to enact effectual decision‐making. However, little is known about how such effectual means are developed, particularly when entrepreneurs' primary means are digital capital rather than pre‐existing effectual means. To address this gap, our qualitative research examines an emerging phenomenon in which young people engage in side‐hustling through social media. Our findings reveal that entrepreneurs develop effectual means by leveraging digital capital through browsing, consulting, and imitating. This developmental process is significantly streamlined by digital capital's generativity, recommendability, and multimodality, with its cost‐effectiveness dynamically assessed to determine the continuity of development. Drawing on these findings, we discuss implications for effectuation theory and entrepreneurship studies. Managerial Summary Entrepreneurs are known to rely on their established means for effectual decision‐making. However, little is known about how entrepreneurs make effectual decisions when they possess digital capital but have underdeveloped means for effectuation. This study explores how young side‐hustlers on social media build means for effectuation through browsing, consulting, and imitating. The generativity, recommendability, and multimodality of digital capital significantly enhance this developmental process, while cost‐effectiveness is continuously assessed to determine whether to proceed. We develop a process model that illustrates how entrepreneurs leverage and optimize digital capital to drive effectuation in the digital age.

Research Summary We investigate public support and venture capital (VC) investment in academic startups. Government support may enable follow‐on investment by providing a quality signal to investors. This signal is especially important for academic startups, which face large funding gaps due to their complexity, cutting‐edge nature, and uncertainty regarding the founders' management capabilities and commitment. Using a panel of startups in Germany, our analyses confirm that academic startups are more likely to obtain follow‐on VC investment after receiving public support than non‐academic startups. Further, this effect is limited in time, lasts longer for academic startups, is concentrated in high‐tech manufacturing firms, and is stronger for investments from business angels. Our findings have implications for policymakers seeking to foster academic entrepreneurship through policy programs and VC investment. Managerial Summary Obtaining seed and growth capital is essential for potentially highly innovative startups. We show that startups that obtain public support are more likely to receive VC funding and that this effect is stronger for startups with academic founders, approximately twice as large. We further show that this benefit is limited in time, concentrated in the high‐tech manufacturing industry, and more salient for business angel financing than for investment by independent VC funds or corporate VCs. For founders of academic startups, our results imply that acquiring public support might enhance the chances of attracting follow‐on financing.

Research Summary Existing research offers conflicting evidence on how corruption affects entrepreneurship. We adopt a contingency approach highlighting the role of generational imprinting. Drawing on imprinting and generational research, we argue entrepreneurs develop distinct generational imprints shaped by the environment during their formative years. Using a proprietary dataset of Chinese private firms, our findings suggest that in corrupt environments, market‐generation entrepreneurs with a transactional imprint tend to outperform their premarket‐generation counterparts in the short run, as the latter's principled imprint likely limits public relations spending. Personal life experiences—rural living and higher education—attenuate the influence of the transactional imprint, narrowing intergenerational differences in firm performance. Our study advances research on corruption and entrepreneurship by integrating institutional, generational, and individual‐level perspectives to explain how corruption affects entrepreneurs differently. Managerial Summary The relationship between corruption and entrepreneurship remains contested. Our study takes a novel angle by examining generational differences among entrepreneurs. We suggest that the distinct environments entrepreneurs experienced during adolescence shape their value orientations, leading to variation in firm performance in corrupt environments. Using a dataset of Chinese private firms, we show that, in corrupt environments, younger‐generation entrepreneurs with a transactional orientation (i.e., transactional imprint) tend to outperform older‐generation entrepreneurs with a principled orientation (i.e., principled imprint) in the short run. However, this performance gap narrows among those who lived in rural areas or received higher education. Our work highlights the crucial role of institutional environments in shaping entrepreneurs' values across generations and advocates for initiatives that cultivate more ethically grounded entrepreneurial mindsets.

Research Summary The emotional rollercoaster of entrepreneurship is characterized by encounters with challenges that impede venture progress. Consequently, resilience, which is reflected in the ability to maintain functioning through such challenges, has become of particular interest to scholars. Existing research emphasizes the ability of resilient individuals to use positive emotions to overcome challenges. Yet, scholarship has largely overlooked the role of affective fluctuations in resilience processes, which is problematic for entrepreneurs facing the chahighs and lows of venturing. This daily diary study of technology entrepreneurs reveals that those who are more resilient report smaller day‐to‐day fluctuations in their affective state over the course of two working weeks. This finding suggests that theory on self‐regulation may serve as an important key in understanding the microprocesses underlying resilience. Managerial Summary Entrepreneurship is often considered an emotional rollercoaster. For this reason, many entrepreneurs are interested in understanding resilience and its role in managing the ups and downs of business venturing. This research examines the relationship between resilience and fluctuations in affect by studying entrepreneurs over the course of two working weeks, as they confront a challenge in their venture. The results show that entrepreneurs who are more resilient also report smaller changes in affect day‐to‐day. This suggests that entrepreneurs looking to enact resilience may need to turn the emotional rollercoaster of entrepreneurship into a train ride.