Theorising entrepreneurship: an institutional theory perspective

Scholarship in entrepreneurship has taken an institutional turn recently. This is in large part because entrepreneurship scholars have emphasised the need to understand the context of entrepreneurial process. There have been numerous theoretical and empirical attempts to explore entrepreneurship from an institutional theory perspective (see Ruef & Lounsbury, 2007; Thornton, 1999; Sine & David, 2010; Tolbert et al., 2011). Institutional theory allows for understanding the deeper and more resilient aspects of social structures by taking into account the processes by which structures, including rules, norms, and routines, become established as authoritative guidelines for social behaviour (Scott, 1987). Institutional theory has proved to be a useful theoretical foundation for examining a wide array of topics in different domains of organization and management studies (Di Maggio & Powell, 1991). It is traditionally concerned with how various actors and organizations attain and secure their positions and legitimacy by conforming to the rules and norms of the institutional environment (Scott, 2007). As a theoretical lens, it allows for reading of complexities and subtleties involved in the process of entrepreneurship, which is characterised by the contextual embeddedness of entrepreneurs’ actions. For the purpose of this Handbook, institutional theory offers a useful framework to study several sub-domains of entrepreneurship by highlighting importance of institutions as facilitating or constraining structures.