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Entrepreneurship Theory and Practice Vol. 33 No. 3 2009

The Life Cycle of an Internet Firm: Scripts, Legitimacy, and Identity

Israel Drori1; Benson Honig2; Zachary Sheaffer3

1 College of Management Academic Studies, School of Business Administration. He is an organizational ethnographer who focuses on the emergence of new industries and transnational entrepreneurship. · 2 Betty and Peter Sims Professor of Entrepreneurship at Wilfrid Laurier University, Waterloo Canada. He is president of the Canadian Council for Small Business and Entrepreneurship (CCSBE) and director of the NeXt research center. · 3 Open University of Israel and the Ariel University Centre. Sheaffer specializes in corporate downtums including crisis, decline, downsizing, and business failure.

Abstract

We study, longitudinally and ethnographically, the construction of legitimacy and identity during the life cycle of an entrepreneurial Internet firm, from inception to death. We utilize organizational scripts to examine how social actors enact identity and legitimacy, maintaining that different scripts, both contested and consent–oriented, become the source of action for acquiring legitimacy and creating organizational identity. We show that scripts enable entrepreneurs and other social actors to invoke a set of interactions within and outside the organization. Scripts construct values and interests, form social bonding and consented actions, and eventually shape and reshape the individual and institutional contexts of identity and legitimacy. We found that the strategic action of organizational members in pursuing and enacting their preferred scripts depends on their position and role in the organization. We observed that the institutionalization of simultaneously competing scripts created a path–dependent process leading to organizational conflict and eventual failure.

DOI
10.1111/j.1540-6520.2009.00323.x
Volume
33
Issue
3
Pages
715-738
Language
en
Sources
openalex crossref

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