Knowledge that Transforms

Research Summary We explore how CEO sensegiving through framing influences incumbent firm response to business model innovation. Our historical analysis of Borders and Barnes & Noble (B&N) in the US bookselling industry after the entry of Amazon.com reveals that although both CEOs framed Amazon's entry as an opportunity, they did so in strikingly different ways. Their opportunity framing differed on four dimensions—intensity, concreteness, future orientation, and inclusiveness—closely associated with specific patterns in the respective incumbent's response: separation between the old and new business model for Borders and blending of the old and new models for B&N. Our study highlights the role of multidimensional and sustained opportunity framing for blending actions contributing to business model innovation in established firms over time. Managerial Summary What role do CEOs play in how established firms react to new entrants with innovative business models? We examined how the CEOs at B&N and Borders framed the opportunity provided by the new online business model introduced by Amazon and found significant differences in their framing that influenced how the two firms adapted to it. The more intense, concrete, future‐oriented, and inclusive framing by B&N's top managers contributed to a successful blending of the traditional store‐based and the new online model, while at Borders the business models were kept separate. Our study shows the importance of multidimensional and sustained framing of digital opportunities over time for the successful integration of new business models.

Research Summary Extant research in neuroscience suggests that human perception is multimodal in nature—we model the world integrating diverse data sources such as sound, images, taste, and smell. Working in a dynamic environment, entrepreneurs are expected to draw on multimodal inputs in their decision making. However, extant research in entrepreneurship has largely focused on how entrepreneurs or investors develop insights from data in a single mode. A few studies that have used a multimodal approach either simplify the multimodal data (MMD) into a few constructs or manually analyze the data without fully utilizing their potential. Such oversimplification limits the insights that can be gained from MMD. In this paper, we offer a framework to guide researchers to analyze and integrate MMD, capturing various cues embedded in the entrepreneurial process. We illustrate how applying machine learning algorithms to MMD can engender a robust, reliable, and scalable approach for researchers to effectively capture the elusive yet critical aspects of entrepreneurial phenomena. We also curate a set of data and algorithm resources for researchers interested in leveraging MMD in their studies. Managerial Summary Entrepreneurs operate in fast‐paced and complex environments where success often relies on the ability to make sense of diverse and rich information, which ranges from explicit observations (e.g., what they see and hear) to more subtle contextual cues. Yet, most entrepreneurship research focuses on analyzing data in a single mode, such as only texts or numbers. Our research highlights the importance of embracing multimodal data ( MMD ) that combines various formats like audio, image, video, and text, to better understand and explain entrepreneurial decision‐making. We introduce a practical framework and a set of machine learning techniques that help managers and researchers alike harness the richness of multimodal data. Rather than simplifying or manually analyzing multimodal data, our approach allows for scalable, systematic, and reliable insights into the entrepreneurial process. For practitioners, this means better tools for evaluating pitches, tracking team dynamics, or sensing market trends in real time. To support adoption, we also provide a curated set of MMD sources and algorithms that organizations can leverage to make more informed strategic decisions.

Research Summary Sustainable new ventures seeking to tackle grand challenges such as climate change or biodiversity loss through new business models face the difficult task of reconciling social and ecological goals with profit. To provide a better understanding of how founders balance such tensions and develop viable business models, this longitudinal case study traces the evolution of business models in six nascent sustainable ventures. We find that depending on the founding team's cognitive configuration (i.e., narrow vs. paradoxical), sustainable new ventures develop business models along two alternative paths. Reflecting different approaches to business model design in terms of what is done, how it is done, and when it is done, these trajectories explain why some ventures survive beyond the proof‐of‐concept phase while others do not. Managerial Summary Our study of six sustainable new ventures provides several insights for entrepreneurs on creating viable business models that meet social, ecological, and commercial goals. Founders should pursue a patient, experimental approach to business model design, avoiding early commitments while seeking stakeholder feedback for deeper insights into the challenges at hand. Furthermore, the team's mindset (narrow or paradoxical), influenced by members' value concepts (idealistic or pragmatic), determines the venture's design path. Teams with a paradoxical mindset, simultaneously integrating social, ecological, and economic goals, are more likely to navigate beyond the proof‐of‐concept phase successfully. Moreover, having idealistic and pragmatic perspectives within the team fosters cognitive diversity, which is crucial to dealing with complex challenges effectively.

Research Summary We evaluate the role of cultural tightness–looseness as an explanation for cross‐cultural variation in new firm formation rates. Modeling cultural tightness–looseness as an antecedent for individual entrepreneurial dispositions and informal institutions, we examine its impact on the number of new limited‐liability companies registered per 1000 people and the rate of new entrepreneurs in the working‐age population. Our findings show that cultural tightness–looseness explains 56% of the variation in new firm formation rates in a sample of 156 nations, and 71% of the variation in the rate of new entrepreneurs in the 50 US states, with greater cultural looseness corresponding to higher rates of entrepreneurship, on average. This effect is robust to various model specifications, measures, and controls for other cultural dimensions. Managerial Summary Our study examines how cultural tightness–looseness impacts new firm formation rates across nations and US states. We find that cultural looseness, characterized by flexible social norms, significantly influences entrepreneurial activity. Specifically, it explains 56% of the variation in new firm formation rates across 156 nations and 71% of the variation in new entrepreneur rates in the 50 US states. Nations and states with looser cultures tend to have higher rates of entrepreneurship. These findings are robust across different model specifications, measures, and control variables. Managers and policymakers should consider the strength and enforcement of social norms as factors in fostering new firm formation.

Research Summary Business incubators are among the most widely implemented instruments to foster entrepreneurship. Yet empirical evidence on their effectiveness remains fragmented and often contradictory. Limited research systematically compares how different types of incubators influence multiple venture performance outcomes, including innovation, survival, growth, profitability, and employment. In this meta‐analysis of 39 empirical studies encompassing 55,219 firms, we synthesize the relationship between business incubation and different venture performance dimensions. Our results reveal a significant positive overall effect, moderated by the types of support mechanisms provided and the incubators' ownership identities. We find strong positive effects on innovation and a modest but statistically significant effect on growth, whereas effects on survival, profitability, and employment are weaker and, in part, statistically insignificant. Managerial Summary Policymakers regularly invest in incubators, yet uncertainty remains about which models deliver meaningful value to supported firms. Drawing on evidence from 39 studies covering more than 55,000 firms, this meta‐analysis shows that incubators can improve innovation and firm growth, while effects on survival, profitability, and job creation are limited or inconsistent. Incubator design and governance are central drivers of support effectiveness. Programs that emphasize bridging—that is, linking startups to investors, customers, and expert networks—generate stronger outcomes than models focused primarily on buffering, such as subsidized space or administrative support. Private and university incubators outperform public models, which often face bureaucratic constraints. These findings provide guidance on how managers and policymakers can align an incubator's support model and governance with the specific outcomes they seek to achieve.

Research Summary We investigate family CEO birth order as an antecedent of family firms' CSR behavior. Despite psychology literature recognizing it as a key predictor of individual behavior, birth order has been largely neglected in management research. Drawing on behavioral economics and evolutionary psychology—specifically, the Family Niche Model—we identify economic and social preferences as two competing channels through which birth order effects propagate to CSR behavior. An unbalanced panel dataset of 550 firm‐year observations from 84 family firms between 2010 and 2022 reveals a negative relationship between family CEO birth order and CSR behavior, pointing to the dominance of the economic channel, whereby the higher risk tolerance among later borns manifests. This relationship is positively and negatively moderated by family CEO sibship size and age, respectively. Managerial Summary We examine the role of family CEO birth order in shaping family firms' CSR behavior considering that individuals' economic and social preferences are strongly influenced by their birth order. The results show that family CEO birth order negatively relates to CSR behavior. We argue that this relationship is driven by higher risk tolerance among later‐born family CEOs, who are consequentially less inclined to adopt CSR behavior as a risk‐mitigating strategy. The relationship is attenuated by family CEO sibship size and amplified by CEO age. Our study cautions family firms concerned with CSR to carefully consider the implications of birth order when selecting family members for the CEO position. Concurrently, family CEOs should be aware that their early family experiences may affect their CSR decisions.

Research Summary Collecting fine‐grained, longitudinal data to study new venture creation (NVC) is critical but empirically challenging given the partly invisible, collective, and highly discursive nature of NVC. This article offers the ethnography/accelerator approach as one powerful solution to this problem. This approach theorizes the implications raised by the invisible, collective, and highly discursive nature of NVC as challenges of accessibility, multivocality, and reflexivity. It provides a framework articulating these challenges with key ethnographic insights to advance data collection and theory building, before discussing five implications of this approach for NVC research and providing recommendations and points of caution. Managerial Summary Explaining how to create, organize, and operate a new venture is critical but raises important methodological challenges. Early‐stage ventures have no operating history, the stakeholders collaborating with entrepreneurs are geographically dispersed, and entrepreneurs' stories are often examined uncritically. The ethnography/accelerator approach suggests overcoming these challenges by using business accelerators as a research setting to apply ethnographic methods and collect reliable data. It provides guidance for enabling the full‐time immersion of the researcher into this setting, allowing the collection of finely‐grained data capturing the day‐to‐day practices and interactions at the heart of new venture creation and the views of the entrepreneurs, mentors, investors, policymakers, and the like playing a pivotal role in this process.

Research Summary Drawing on social cognitive theory, this study develops and tests a model to clarify the boundary conditions and mechanisms through which coworker entrepreneurship influences employee entrepreneurship. Two time‐lagged field studies support our predictions: employee moral attentiveness moderates the effect of coworker entrepreneurship on employee entrepreneurship, with coworker entrepreneurship reducing employee entrepreneurship among those with high moral attentiveness and increasing it among those with low attentiveness. Additionally, deontic injustice mediates the negative relationship when moral attentiveness is high, while vicarious learning mediates the positive relationship when attentiveness is low. These findings indicate that interpersonal influence in organizations is much more complex than the simple “Monkey see, Monkey do” explanation of social learning and emphasize the need to integrate moral and justice considerations into entrepreneurship research. Managerial Summary This study provides a comprehensive understanding of the dual impact of coworker entrepreneurship on employee entrepreneurship. It suggests that employees characterized by high moral attentiveness are more likely to perceive deontic injustice when witnessing coworker entrepreneurship, thus prompting resistance to imitating such behavior. Conversely, employees with low moral attentiveness are prone to engage in vicarious learning, potentially leading them to mimic their coworkers' entrepreneurial actions. These findings highlight crucial factors that may deter employees from replicating their coworkers' entrepreneurial endeavors and offer valuable insights for managers seeking to mitigate the negative influence of coworker entrepreneurship and its spread within organizational contexts.

Research Summary Across three studies ( N = 300, 141, 188), we apply impression management theory to examine if and how entrepreneurs can strategically disclose risk while facilitating beneficial audience perceptions. In the crowdfunding context, we show that intentionally packaging positive information with risk disclosures—a strategy we describe as “compensation”—enhances financing outcomes. Furthermore, we conducted two follow‐up randomized experiments ( N = 141, 188) to test intervening mechanisms (i.e., perceived authenticity, project quality) and boundary conditions (i.e., information specificity, gender) of the relationship between compensation and crowdfunding performance. Our research has implications for the strategic disclosure of risk, extends our understanding of contextual factors that influence the effectiveness of impression management tactics, and provides guidance for entrepreneurs engaged in crowdfunding efforts. Managerial Summary Should early‐stage entrepreneurs disclose risk to potential investors? In our study, we examine the effects of making the choice to disclose risks associated with a new venture. While risk disclosure may harm financing efforts, we reveal that using a tactic we call “compensation”—in which risk disclosures are packaged with information meant to mitigate the risk—enhances financing efforts for early‐stage entrepreneurs by cultivating perceptions of authenticity. Furthermore, we found that the benefit of this tactic appears to be even greater for female entrepreneurs than male entrepreneurs. Overall, our research shows that entrepreneurs should disclose risk, but should take care to do so in a specific manner.

Research Summary Our qualitative study of five corporate venture capital (CVC) units reveals that CVC is organized along one of two distinct pathways—order‐taker or free‐bird. Our two‐pathway model deconstructs the heterogeneity within CVC designs and provides detailed insights into the processual nature of CVC search mechanisms. We find evidence that the locus of problem formulation influences the chosen search behavior. While order‐takers respond to predefined corporate‐led problem formulation, free‐birds allow the venture market to guide search behavior. Differences in search processes can thus be attributed to the pursuit of distinct problem‐solution pairs. Implications for CVC and organizational search literature are discussed. Managerial Summary Organizations search for new knowledge and technologies using corporate venture capital (CVC) units. Despite growing evidence of heterogeneity in CVC designs, managers continue to have limited insights for designing and running such CVC units. In contrast to previous recommendations to use structural attributes and/or institutional logics to design and manage CVCs, we provide managers an organizational search lens which reveals significant variations in how corporations search for new ventures. We identified two extreme CVC designs driven by the locus of problem formulation (internal vs. external): order‐takers—who respond to a predefined and corporate‐led problem formulation approach, and free‐birds—who shape the problem formulation guided by venture market dynamics. We point to design differences across popular CVC subprocesses which can be handy for managers.