the social construction of entrepreneurship: narrative and dramatic processes in the coproduction of...

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March, 2005 185 A social dimension to business development and inertia is currently acknowledged in several accounts of learning, business models, vision building, and innovation, and through more general concepts of networking, social capital, and embeddedness. Here a construc- tionist perspective is developed to improve our understanding of the interactions between entrepreneurs and stakeholders in all of these areas. This identifies narrative and dramatic processes that describe how notions of individual and collective identity and organization are coproduced over time. A framework is created to show how selective and emotional processes that produce storylines, emplotment, and narrative structure support sense making and action making. Introduction Understanding of the formation and development of organizations is frequently approached in two apparently contrary principles. The first relates opportunity realiza- tion to vision, self-belief, and adaptive learning (Bird, 1988; Rae & Carswell, 2000, 2001; Van de Ven, Huston, & Schroeder, 1984). The second relates organizational reliability and efficiency to accountability, legitimacy, path dependency, and inertia (Baron & Hannan, 2002; Baron, Hannan, & Burton, 1999; DiMaggio & Powell, 1983; Hannan & Freeman, 1984; Meyer & Rowan, 1977; Meyer & Scott, 1992). These two principles of adaptation and inertia are often juxtaposed sequentially. Hannan and Freeman (1984) argue that after an initial period of experimentation and learning, inertia increases with the age, size, and complexity of the organization. Punctuated equilibrium models (Gersick, 1991) describe alternating periods of learning and routinization. These may be normative-linear models (Greiner, [1972] 1998; Leontiades, 1979) or empirically derived P T E & The Social Construction of Entrepreneurship: Narrative and Dramatic Processes in the Coproduction of Organizations and Identities Stephen Downing 1042-2587 Copyright 2005 by Baylor University Please send correspondence to: Stephen Downing at [email protected].

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March, 2005 185

A social dimension to business development and inertia is currently acknowledged inseveral accounts of learning, business models, vision building, and innovation, and throughmore general concepts of networking, social capital, and embeddedness. Here a construc-tionist perspective is developed to improve our understanding of the interactions betweenentrepreneurs and stakeholders in all of these areas. This identifies narrative and dramaticprocesses that describe how notions of individual and collective identity and organizationare coproduced over time. A framework is created to show how selective and emotionalprocesses that produce storylines, emplotment, and narrative structure support sensemaking and action making.

Introduction

Understanding of the formation and development of organizations is frequentlyapproached in two apparently contrary principles. The first relates opportunity realiza-tion to vision, self-belief, and adaptive learning (Bird, 1988; Rae & Carswell, 2000, 2001;Van de Ven, Huston, & Schroeder, 1984). The second relates organizational reliabilityand efficiency to accountability, legitimacy, path dependency, and inertia (Baron &Hannan, 2002; Baron, Hannan, & Burton, 1999; DiMaggio & Powell, 1983; Hannan &Freeman, 1984; Meyer & Rowan, 1977; Meyer & Scott, 1992). These two principles ofadaptation and inertia are often juxtaposed sequentially. Hannan and Freeman (1984)argue that after an initial period of experimentation and learning, inertia increases with the age, size, and complexity of the organization. Punctuated equilibrium models(Gersick, 1991) describe alternating periods of learning and routinization. These may benormative-linear models (Greiner, [1972] 1998; Leontiades, 1979) or empirically derived

PTE &The Social Constructionof Entrepreneurship:Narrative and DramaticProcesses in theCoproduction ofOrganizations andIdentitiesStephen Downing

1042-2587Copyright 2005 byBaylor University

Please send correspondence to: Stephen Downing at [email protected].

accounts of less predictable patterns of upheaval and convergence (Hendry, Arthur, &Jones, 1995; Hurst, 1995; Pitcher, 1997; Tushman, Newman, & Romanelli, 1986). Theproblem with many explanations of the development of small firms according to Frankand Lueger (1997) is that: “Development analyses frequently focus on changes in vari-ables and results of development processes. The process taking place between the twomeasuring points, however cannot be examined empirically” (ibid. p. 36).

We can illustrate this charge briefly by considering the major variables in recentexamples of the adaptation and inertia principles. Rae and Carswell (2000, 2001) explainthe process of organizational development by reference to the self-efficacy, values, per-sonal theory, and relationships of the entrepreneur. Whilst Baron et al. (1999), refer toentrepreneurs’ organizational models or blueprints that reflect different assumptions aboutthe control, selection, and attachment of employees (see Figure 1). Although the firstapproach stresses the adaptation of the firm and the second stresses the inertia of the firm,both approaches effectively make central recourse to the idea of a business model, whichis a set of expectations about how the business will be successful in its environment (Fora fuller account of the sense in which a business model is used here, see Bettis and Prahalad’s [1995] concept of the dominant logic.).

In the former approach the model is conceived as a “personal theory” that is a productof the entrepreneur’s active learning from experiences and relationships. In the latter theorganizational model is described in detail, but the authors are more circumspect aboutits origins. It is said the model may be an outcome of the visions, values or strategy offounders or the economic, social, and cultural forces brought to bear on firms by venturecapitalists, accountants, governments, and others. The authors note, “Our results demon-strate that those blueprints affect the pace of business bureaucratization, but they do notresolve the thorny issue of the distinctive contributions made by founders and other actorsin building and changing organizations.” (Baron et al., 1999, p. 542).

186 ENTREPRENEURSHIP THEORY and PRACTICE

RelationshipsValues

Self-efficacy Personal theory

OrganizationalReliability and

Efficiency

OpportunityRealization/vision

Attachmentassumption

Control assumption

Selection assumption

Organizationalblueprint or model

Adaptivelearning

Pathdependency Routinization

Inertia

Figure 1

Principles of Adaptation and Inertia Theorized in Process of OrganizationalDevelopment

This article addresses this “thorny issue” directly by focusing on the way in whichentrepreneurs and stakeholders coproduce business models that is “the process takingplace between the two measuring points” (Frank & Lueger, 1997). Currently this processis unclear, the authors noted immediately above refer to personal theory and businessmodels but the explanation of the development of business models remains at a high levelof abstraction. A relatively vague interaction between values, self-belief, and relation-ships or strategy and stakeholders is posited to produce change or continuity in businessmodels. Frank and Lueger’s (1997) response to what they saw as this imprecision in the-orizing about firm development, is to focus on the rules that underpin the “social order”of the firm. They propose analyzing the social order in terms of a complex set of multi-dimensional rules with economic, political, cultural, and reflexive dimensions consistentwith Giddens’ (1986) structuration theory. They suggest that the social order of the firm(the development object) is maintained by the constant reproduction of rules foractions/routines and generative rules that specify conditions under which rules for actioncan change (the development logic). These rules are in turn said to be subject to anotherset of rules (called development dynamics), which determine the way in which the socialorder adapts to economic, social, technical, and legal forces in the environment of thefirm. This approach recommends qualitative research into “. . . rules that are establishedin the interactions within a business and between a business and its environment” (Frank& Lueger, 1997, p. 61).

This article shares Frank and Lueger’s (1997) goal to elucidate the social order ofthe firm, and to show how this changes over time in a way that is consistent with Giddens’structuration theory. However, the focus here is not on abstracting types of rules estab-lished in interactions, but rather showing how the narrative and dramatic dynamics ofthe interactions selectively and creatively produce and transform the rules and resourcesof the social order. The argument for moving beyond Frank and Lueger’s (1997) analy-sis of rules in this way lies within the theory they are trying to operationalize, namelyGiddens’ structuration theory. Structuration theory is a synthesis of many sources, includ-ing Garfinkel’s (1967) concept of “knowledgeable” actors and Goffman’s (1974) under-standing of the dramatic enactment of notions of self and institution in “the interactionorder” (1983). Thus Giddens talks about “rules and resources” as structures drawn uponby actors to reproduce and transform social order; the “duality of structure” refers to theway in which the same structures enable and constrain action (adaptation and inertia). As Tsoukas (1994) explains, actors in organizations have to constantly reconcile the particular event or contingency they face, with the institutionalized body of policies andrules. They do this by reference to stories that summarize custom and practice and help to “pigeon hole” the current experience in the “correct” category thereby enactingor constituting the thing that has been “described.” In later work this leads Tsoukas (1996)to conclude that these socially constructed realities (Berger & Luckmann, 1967) resem-ble “distributed knowledge systems” and Weick and Roberts’s (1993) concept of “collective mind.” He stresses that tacit and explicit knowledge and individual and social knowledge is inseparable and that the challenge for research is to appreciate “. . .the character of the firm as a discursive practice: a form of life, a community, in whichindividuals come to share an unarticulated background of common understanding”(Tsoukas, 1996, p. 23).

Notions of entrepreneurs’ personal theory or organizational model suggest “an unar-ticulated background” but do not offer a detailed account of how this develops througha community of stakeholders. The analysis of narrative and dramatic processes devel-oped here shows how this is sustained and transformed in interactions over time. It offers

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a view of the way in which social order and transformation is rooted in joint sense-makingand identity-making work amongst people. These social processes logically precede andunderpin accounts of organizational development couched in terms of punctuated equi-librium and changing business models as the result of the interplay of markets, culture,and large institutionalizing forces or networking, relationships, and personal learning.Currently within studies of entrepreneurship there are examples of work that show a sen-sitivity toward the joint social construction of reality through interaction and the dualityof structure, but they lack any holistic analysis of the processes involved. Examplesinclude some discussions of social capital, networking and social embeddedness, andstudies of entrepreneurial vision and innovation. The framework developed later in thisarticle provides a singular approach to advancing studies in all of these areas.

Thus the framework extends understanding of social capital (Coleman, 1988) asdependent on reciprocal social contracting to sustain mutually developed obligations,expectations, and sanctions (Starr & MacMillan, 1990). It extends the insight that thisrequires relationships that create “human moments” in which individuals are able toempathize with each other and jointly participate in making meaning prior to helpingeach other (Baker, 2000). It builds on understanding that entrepreneurship is embedded(Granovetter, 2000). That is, influenced by cultural understandings constituted throughethnicity and kinship, which create localized meanings and bases for trust and solidaritythat “are shaped by and in turn shape structures of social interaction” (Granovetter, 2000,p. 256).

The framework developed here provides holistic concepts to investigate entrepre-neurship as an intensely social activity based on culture as suggested by Lavoie (1991)and the anthropological study of Lindh de Montoya (2000). Here culture is viewed as anopen-ended process of communication that shapes economics, politics, and social insti-tutions. It follows that entrepreneurs are skilled at reading and influencing the “conver-sations of mankind” (Lavoie, 1991, pp. 49–50). “Entrepreneurial acts then,” Lavoieconcludes, “are readings of and contributions to different conversations, and successfulentrepreneurs can join these conversational processes and move them in particular direc-tions.” (Lindh de Montoya, 2000, p. 343). Lindh de Montoya (2000) illustrates that theconversation is a multidirectional process and that stakeholders are active not passive inthe process. They show that opportunity identification is rooted in a close understandingof the local culture. “But trust relationships are constantly in flux. . . . (and) exist withinan ongoing process of renegotiation and redefinition” (ibid. pp. 347–348). Whilst Freddy(a focal entrepreneur) is seen as skilful at exploiting cultural codes and social obligations,so are his suppliers and customers. Over time there is a “tug of war” for the destinationof profit. “Like the discovery of the profit niches themselves, the discussion over andeventual destination of these profits is culturally embedded” (Lindh de Montoya, 2000,p. 349).

Jack and Anderson (2002) reach a similar conclusion as they use Giddens’ struc-turation theory to illustrate the concept of embeddedness. They find that “Embedding isa way of joining the (local) structure; by joining the structure one enacts it” (Jack &Anderson, 2002, p. 484.) Two other subject areas in entrepreneurship that show a sensi-tivity to language that could be usefully developed by the analysis of dramatic narrativeprocesses developed in this article can be mentioned briefly. These are the study of inno-vation (see Hill & Levenhagen, 1995), and the creation of support for entrepreneurialvisions through use of metaphor, dramatic skills, integrity, audience involvement, andlocal knowledge (see Mintzberg, 1989, p. 122).

Figure 2 attempts to summarize some of the main points from this introduction. Itsketches the nature of the contribution this article seeks to make and highlights some of

188 ENTREPRENEURSHIP THEORY and PRACTICE

the areas in entrepreneurship where this perspective could add value. Thus the contribu-tion is the shaded area in the center of the figure: titled narrative and dramatic processesamongst entrepreneurs and stakeholders. This is perceived to be a gap in understandingand is represented as a “hole” in the “donut” of several current approaches to entrepre-neurship. Currently the significance of these processes is suggested by some approachesto entrepreneurial social embeddedness, social capital, networking, vision building, andinnovation but it remains a marginal consideration and is not well theorized. Immedi-ately around the area of contribution is located the personal theory and organizationalmodels identified in a discussion of approaches to organizational development based onprinciples of adaptation and inertia. It was suggested that these concepts resemble thenotion of a dominant logic but that the way in which these concepts relate to the socialorder was poorly specified. We saw that it has been suggested that the rules underpin-ning the social order can be identified, but it was argued here that narrative and dramaticprocesses determine how rules are appropriated and interpreted selectively and creatively,it follows that these offer a better way of studying the process of organizational devel-opment. Thus the “development logic” of organizations (Frank & Lueger, 1997) is viewedas having a narrative structure that is subject to narrative and dramatic processes. Henceperiods of organizational transformation and inertia can be explained by reference to nar-rative and dramatic processes.

Here we describe a holistic framework or approach to studying the narrative and dra-matic processes amongst entrepreneurs and stakeholders that could be used in studies inall of these areas. It will be suggested that three related processes are observable: story-lines, emplotment, and narrative structuring. It is argued that these processes identifyregular patterns in the interactions of entrepreneurs and stakeholders that express emo-tions, establish identities and understanding, and enable coordinated actions. The nextsection shows the broad theoretical sources upon which this article’s analysis of narra-

March, 2005 189

Narrative & Dramatic

processes amongstEntrepreneurs

& Stakeholders

Dominant logic

Social order

VisionReliability

AdaptationInertia

Netw

orkin

g

Soc

ial e

mbe

ddendness Vision buildingInnovation

Social capita

l

Figure 2

A Narrative Contribution to Entrepreneurship

tive and drama in interactions is based. This is followed by an elaboration of the narra-tive and dramatic framework. A discussion section then highlights some of the applica-tions of the framework for studies of entrepreneurship by revisiting some of the areasraised in this introduction. The conclusion offers a brief summary and suggestions forfuture development.

Narrative and Dramatic Processes in the Coproduction of Organization and Identities

The broad theoretical roots of the approach to narrative and drama in this article arefound in the seminal work of Berger and Luckmann (1967) and the central claim thatreality reflects a dramatic enactment of roles within communicative networks. This suggests that identity (individual and collective) is produced simultaneously with institutions. “Institutionalization occurs whenever there is a reciprocal typification ofhabitualized actions by types of actors” (Berger & Luckmann, 1967, p. 72). Two quota-tions go some way to illustrate these points.

“The institution, with its assemblage of ‘programmed’ actions is like the unwrittenlibretto in a drama. The realisation of the drama depends upon the reiterated performancesof its prescribed roles by living actors. The actors embody the roles and actualise thedrama by representing it on a given stage. Neither drama nor institutions exists empiri-cally apart from this recurrent realisation.” (ibid. p. 92)

“The significant others in the individual’s life are the principal agents for the main-tenance of his subjective reality. Less significant others function as a sort of chorus. Wife,children, and secretary solemnly reaffirm each day that one is a man of importance, or ahopeless failure; maiden aunts, cooks and elevator operators lend varying degrees ofsupport to this” (ibid. p. 170).

The nature of this socially constructed reality or ontology is held to be a dialecticalprocess comprising three “moments,” respectively “externalisation, objectivation andinternalisation” (Berger & Luckmann, 1967, pp. 78–79). This describes how over timesubjective meanings from typified ways of doing things take on an external, objectivecharacter that acts back on the producers of these meanings. Reification, the way human-ity loses sight of the ways in which social order is a human product and the way it actsback on human consciousness is understood to be widespread. As soon as social arrange-ments have become objectivated, “the possibility of reification is never far away” (ibid.p. 106). The significance of this is that the structure of social order is viewed as “sedi-mented” or “crystalline” both enabling action and constraining action. As such the per-spective is very well placed to study inertia and change in organizations. It is also quiteconsistent with the duality of structure proposed by Giddens (1986).

Further insight into the dramatic qualities of the coproduction of identities and insti-tutions is found in much of Goffman’s extensive writing (Goffman, 1959, 1961, 1968,1970, 1974, 1981, 1983). This explores the dynamic, multiple, fluid, flexible, and fragilenature of realities and identities sustained in role-based interactions. So for example, thesense of reality and sense of self sustained in interaction can change rapidly as actorschange the “frame” of sense making or change the emotional “key” for sense making,producing understanding that is more or less serious (Goffman, 1974). Goffman alsoshows how routine everyday interaction is animated by frames and genres imported frompopular culture, like television and advertising (Goffman, 1974). Whilst Goffman refusedto be classified (as a social constructionist or any other category of thinker) he doesacknowledge the influence of “dramaturgy” (Goffman, 1959) and one can see the per-

190 ENTREPRENEURSHIP THEORY and PRACTICE

vasive influence of dramatism (Burke, 1945) in this work.1 Burke (1945) summarizeddramatism as a perspective where “drama is employed, not as a metaphor but as a fixedform that helps us discover what the implications of the terms ‘act’ and ‘person’ reallyare” (ibid. p. 448). Burke suggests actors structure effective performance of the dramaof interaction by use of a narrative structure known as the pentad. The five elements ofagent, purpose, scene, agency, and act are used over time, to establish a tension and atransformation in an original situation. Goffman (1959) makes it clear that he is not sayinglife is like theater, rather, theatrical techniques “involve use of real techniques—the sametechniques by which everyday persons sustain their real situations” (Goffman, 1959, p. 247). Thus Goffman’s work is based in a “performative” understanding of language,where utterances constitute as well as describe action. It demonstrates reflexivity, the waythat language is constitutive of action, words help formulate actions and situations theydo not just describe situations. It also demonstrates indexicality the way that meaning isalways filled in by people in different contexts.

Rom Harré’s development of Goffman’s dramatistic approach in a linguisticallyinformed constructionist psychology is another key source for the framework developedin this article. Harré sought to create an “explanatory” “psychology of action” that repu-diated a naïve theory of personality based on supposed fixed traits. In its place, perfor-mative competence in interactions is conceived as ability to interpret scenes and scriptsand “explicit knowledge of style and skilled manipulation of persona” possessed by indi-viduals (Harré, Clarke, & de Carlo, 1985, p. 143). Davies and Harré (1991) develop thisapproach by arguing conversations develop storylines in which actors position themselvesand each other. This positioning process is key to the development of identities (a diver-sity of selves), because stories position actors as various sorts of characters, taking certainactions and embodying specific moralities.

Davies and Harré (1991) argue that although storylines are jointly produced, posi-tioning may be reflexive, positioning oneself, positioning another, or reciprocal. Themeanings taken from positioning are often unintended, people may oppose positioning,feel powerless to resist or may not even understand them, due to the diversity of indi-vidual’s past experiences and the complexity of social typifications, and the connotationsof language and metaphors. The positioning concept is presented as an advance overGoffman’s concepts of framing because it is thought to be clearer and unlike frames nottranscendent i.e., existing independently of conversation. The development is also viewedas a move away from an overly structured “Burkian kind” (p. 54) of analysis in favor ofa “poststructuralism (that) shades into narratology” (p. 46).

Another seminal source supporting the ideas developed by the framework in thisarticle is Polkinghorne (1991). Polkinghorne (1991) draws on sources in cognitive psy-chology to explain the way in which human consciousness of time and identity is createdthrough a narrative structure. It is held sense making and identity are constructed througha gestalt that fits parts and wholes together. The parts–whole structuring is largelyachieved through the iterative best-fitting together of remembered episodes (parts) intoplots (wholes). In life this process of “emplotment” (Ricoeur, 1984) occurs whether ornot we verbalize a life story. Subconsciously we are always looking for a plot, to bringnarrative coherence and meaning to the events in our lives. “Emplotment is a procedurethat configures temporal elements into a whole by ‘grasping them together’ and direct-

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1. Although Goffman has attracted criticism from both opponents and supporters of dramatism he seems tohave a sophisticated understanding of the perspective (Burns, 1992; Downing, 1993; Drew & Wooton, 1988).Giddens (1989) argues that if Goffman’s analysis is extended in time and space it is the basis of a theory ofagency.

ing them toward a conclusion or ending” (Polkinghorne, 1991, p. 141). Because there areoften many projects in our lives that do not cohere easily together or interfere with eachother, we may need multiple subplots to integrate our sense of self and meaning in life.When major life events, like divorce, retirement, or business failure undermine an exist-ing narrative emplotment of beliefs and understandings, individuals feel angst, despair,and a loss of identity. The role of most psychotherapy after Freud is held to be to helpindividuals find a new narrative that makes sense of the individual’s life. Life stories arenot limited to self-centered accounts of “Who I am”; they will often expand to includeloved ones, partners and communities, and this is attractive because it extends an indi-vidual’s identity beyond the constraints of their own birth and death.

This section has shown that there is a coherent line of social constructionist theoriz-ing that views a crystalline or flexible sense of reality as a product of interactions thatconstitute identities and institutions or organizations. It has also highlighted the three con-cepts that this article develops into a holistic framework to analyze the interactions ofentrepreneurs and their stakeholders; that is the concepts of narrative structure, storylines,and emplotment. The next section shows how these concepts have been developed andinterpreted to provide a framework that accounts for patterns in the expression of emo-tions, identities, understandings, and coordinated actions over time.

A Framework for the Analysis of Narrative and Dramatic Processes in Entrepreneurship

Within organization studies there is a large body of work concerned with the signif-icance of stories in organizations. It needs to be noted that whilst social constructionism(Berger & Luckmann, 1967) is a central reference in much work in an interpretativeapproach (Alvesson & Willmott, 1992; Putnam & Pacanowsky, 1983) many other influ-ences beyond dramatism pervade this interest in stories. The influence of symbolic inter-actionism (Blumer, 1969) (a more subjectivist philosophy that pays little attention to theobjectivated and constraining nature of social structure) is often apparent, as is the influ-ence of ethnomethodology (Garfinkel, 1967) and conversation analysis (Sacks, 1992).Other significant influences on the development of readings of organizational conversa-tions, talk, discourses, texts, and stories include Saussure (1974) Barthes (1957), Lyotard(1986) Foucault (1984) and Derrida (1978) but these are clearly beyond the scope of thisarticle. Instead the focus of the argument here is that there is merit for entrepreneurshipstudies in developing understanding of the way in which organizations and identities arecoproduced by further narrative and dramatistic analysis. Thus the key concepts identi-fied in the previous section, namely storylines, emplotment, and narrative structure, willbe developed and shown to be linked aspects of people’s interaction, which are signifi-cant in the formation and development of organizations.

The nature of the linkage made here and the scope of the contribution can be intro-duced by reference to recognized debates and foci within social constructionist accountsof the nature and significance of stories in organizations. For there is considerable debateon both the definition of a story or a narrative and the precise influence these have onorganization, identities, and coordinated action. Tietze, Cohen, and Musson (2003) high-light the debate between Boje (1991, 1994, 2001) and Gabriel (1995, 2000). The formerstresses the collective, dynamic, and fragmented nature of stories in organizations, whichis “antenarratives” that are continuously in flux. The latter stresses these fragments or“terse tales” do not properly constitute a story, which is held to be a much more holis-tic, plotted and purposeful and complete individual achievement. Tietze et al. (2003) also

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highlight the major contribution of Weick (1995) creating a focus on stories as the basisfor causality in both retrospective sense making and prospective enactment processes.The framework that is offered here (which has been developed in a grounded fashion)draws on these three aspects (collective storylines, emplotment, and causal narrativestructure) and links them with other qualities in a distinctive manner. Although there aredifferences, the perspective developed here is closer to that of Boje and Weick in that theprimary focus is on the collective, interactional and process aspects of stories, and theterms stories and narrative are used interchangeably. Six numbered points are made hereto introduce the nature of the perspective proposed.

(1) The perspective is a narrative and dramatic view. With the notable exception ofCzarniawska (see for example, Czarniawska, 1997, 1998, 1999) many writers on narra-tive often lose sight of the embodied, visceral, uncertain, engaging, dramatic quality ofsocial life as it is constructed through narratives. (2) It is a longitudinal process view,predicated on the assumption that the nature of the narrative dramatic processes interactand vary consistently over time. (3) It is a view of the way in which narrative dramaticprocesses over time construct a crystalline social ontology, which demonstrates theduality of structure/the constraints on agency. (4) It is a view of the emotional and eval-uative selective basis of narrative and dramatic processes. (5) It is a view of the possi-ble (but not necessary) integration of individual and collective narratives and dramas. (6)It is a view of the transformation of generic plots into local, contextualized narrativestructures.

This perspective is now distilled into definitions and a short discussion of the con-cepts of storylines, emplotment, and narrative structuring. The previous section identi-fied these as key narrative dramatic processes influencing how people coproduceidentities and institutions (coordinated organizational actions). This section shows howthese concepts have been developed and integrated. Figure 3 attempts to show this frame-work schematically.

Storylines

Storylines are emotionally resonant stories that are remembered and repeated. Theyreflect actors’ positioning of individual and collective identities and understanding ofactions and events.

Downing (1997) identified storylines as emotionally positive and emotionally nega-tive remembered and repeated stories by drawing upon Collins’s (1988) analysis of socialmovements. Downing (1997) also used Kirk’s (1970) analysis of the content of myths tosuggest that storylines would often have underlying themes of entertainment, problemsolving, evaluative comparisons, and legitimacy. Here the concept is extended, by incor-porating the argument that notions of individual and collective identity are positioned instorylines (Davies & Harré, 1991). Surprisingly Davies and Harré (1991) offer no defi-nition of a storyline (as their focus is on positioning) so this would appear to be a con-flict-free integration. The development is also warranted in the light of Martin et al.’s(Martin, Feldman, Hatch, & Sitkin, 1983) analysis of the content of organizational storiesthat concludes that stories express tensions between individual and organizational values.That it is stories allow stakeholders to explore and enact notions of individual and col-lective identity. The usage in Downing (1997) and here differs from Boje’s (1991) useof the storyline concept in one significant respect. Thus whilst it is accepted that for someperiod of time storylines will be in a state of flux, as stakeholders put different interpre-tations onto events, it is argued, that eventually over time the storylines will take on an

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objectivated, typified, taken for granted character (Berger & Luckmann, 1967; Tsoukas,1994). Although in principle storylines may always be reinterpreted, in practice groupsof stakeholders are less likely to do this with the passage of time. Put another way, theemotional resonance of storylines will gradually recede as other actions and newer sto-rylines express more emotional momentum.

Emplotment

Emplotment is a largely unconscious process of iteratively ‘fitting’ aspects of story-lines into tacit plots with an expected pattern and conclusion.

Downing (1997) suggested how the emotional momentum in storylines could beenacted in plots. This analysis drew on literary criticism where a plot is a fairly abstractand generic patterning or structuring of action (Toolan, 1988). When one knows the plot,one knows, roughly, how things will turn out in the end—whether characters will fail,fight, succeed or fall in love. With different plots we expect a particular pattern of winnersand losers to emerge. One authority (Barthes) has said that we have “a language of plot”within us before we approach any particular story (Toolan, 1988, p. 27). Thus Downing(1997) argued that plots are hidden or tacit dimensions of stakeholders’ interactions. Storylines help enact action because the emotions therein form a basis to select plots thatshape current behavior and expected outcomes. Following the extended argument above,that storylines also express the positioning of identities we can also note, following Polkinghorne (1991) that the emplotment process also reflects human consciousness oftime, sequence, and identity. Czarniawska (1999, p. 66) stresses that plots transform merechronology into causality, as does Somers (1994). Somers (1994) also supports the ideadeveloped here, that the selection of plots is fundamentally an emotional or evaluative

194 ENTREPRENEURSHIP THEORY and PRACTICE

Figure 3

Narrative and Dramatic Processes amongst Entrepreneurs and Stakeholders

process expressing notions of identity. Thus different plots offer “hypotheses” aboutcausality between events but actors’ selection of plots is made through “evaluative criteria” or ideas such as “husbands as breadwinners” or “union solidarity” (Somers,1994).

The idea that we are socialized to enact plots (Campbell, 1993; May, 1975; Polkinghorne, 1991) develops Goffman’s (1974) observation that we habitually draw ongenres from popular culture and advertising in our daily interactions. Given space con-straints this article will briefly describe just four plots derived from the literary criticismof Frye (1957) and developed by Kilduff and Abolofia (1989). These are related to genresof romance, tragedy, melodrama, and irony. In the romantic plot labeled a quest here, ahero challenges the status quo, engages in various adventures, has setbacks, but ultimatelysucceeds in re-establishing harmonious relationships. In the tragic plot labeled a down-fall here, the hero is overwhelmed largely by fate or external events. In a melodramaticplot labeled a contest, the hero is engaged in a struggle personifying right and wrong orthem and us, which culminates in a battle where good triumphs over evil. In an ironicplot labeled a scam, the hero is revealed to be less than he claimed, and is found to beincompetent, perhaps a con-man. These plots are very fundamental sense-making devices,which most people readily recognize. Campbell (1993) has said that the romantic plot isthe “monomyth,” which is the first story that appears in human mythology and fromwhich all other stories can be seen to depart. Lyotard (1986) has identified a similar plotas the modern metanarrative of progress. Some of the appeal of the romantic plot or questis suggested by Frye (1957) who says it is closely linked to wish fulfillment, and Lymanand Scott (1975) who show it is imbued with a sense of adventure and excitement.

Narrative Structuring

Narrative structuring is the process by which plots that have been tacitly selected aredeveloped by elaborating and contextualising the structure.

A narrative structure provides chronology and perspective (Riessman, 1993; Toolan,1988). A narrative structure refers to elements that allow us to perceive a story; it holdsthe story together and allows us to recognize an account as meaningful. The simplest nar-rative structure is “a beginning, a middle an end.” Emplotment provides a tacit genericnarrative structure. It is held here that this generic and emotive patterning is insufficientfor actors to construct identities and action so they need to further develop the narrativestructure by making it explicit and contextualized. This important consideration is absentin Downing (1997). Whilst there are alternative conceptions of narrative structure, thisarticle adopts Burke’s (1945) pentad. This suggests that over time, individuals structureeffective performance of the drama of interaction by creating a tension and a transfor-mation in the five elements of agent, purpose, scene, agency, and act (See M. Gergen[1992] for an alternative narrative structure suggested for organizational analysis). Thusthe argument is that groups of stakeholders and entrepreneurs elaborate and contextual-ize a tacit plot by recourse to the elements of the pentad. The narrative structure providesa degree of narrative integration; the extent of integration amongst actors in any givensituation is an empirical question. Some integration is assumed in the constructionist perspective, as seen in sedimented typifications, but this should not be mistaken for uniformity of meanings. The whole framework presented here is based on selectiveappropriation of contested and multiple meanings. Different storylines reflect competingevaluations of actions and identities; emplotment is based on a selective appropriationof actions and identities from storylines; and narrative structuring involves a selective

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working-up of a cause–effect logic. Different groups of stakeholders may enact compet-ing social dramas by drawing on different aspects of storylines, selecting different plots,and elaborating different narrative structures. Thus the framework shows shared meansof making events intelligible rather than imputing shared meanings. Following Weick(1995) these processes are seen as facilitating enactment and retrospective sense making.As a means of abbreviation in the discussion below the framework will be referred to asthe SENSE process or SENSE framework, an acronym standing for Storylines, Emplot-ment, Narrative Structuring Enactment.

The linkages made in this framework find support in Somers (1994) argument that areframed narrativity has four dimensions, these are: relationality of parts (storylines),causal emplotment (emplotment), and selective appropriation and temporality, sequenceand place (narrative structuring). Figure 3 attempts to show schematically the integratedaspects of the framework that have been presented. As the following discussion indicatesthe figure is a necessary simplification. The vertical lines attempt to show how one groupof actors might select events or actions from storylines, how these enable actors to tacitlylocate a plot, and how they then become elaborated in a narrative structure. The emplot-ment zone is shaded to indicate that unlike storylines and narrative structure this is a tacitor unconscious process. Figuratively five points in the narrative structure are shown toillustrate the elements of the pentad. Again figuratively isolated “points” taken from sto-rylines have become points surrounded by circles of extra signification and meaning whenthey are elaborated in the narrative structure.

Discussion: The Social Construction of Entrepreneurship

The social construction of entrepreneurship arises from universal processes of socialconstruction—the narrative dramatic means by which actors coordinate actions and iden-tities. Entrepreneurship like the rest of social life is a collaborative social achievement.The interactions of entrepreneurs and their stakeholders sustain and transform the natureof entrepreneurship. The actors involved draw upon their experience and knowledge ofinstitutionalized and canonical forms to make and remake what “small business” entails.Innovation, risk taking, and creativity are aspects of most economic definitions of entre-preneurship, but as yet the fundamental ways in which entrepreneurs apply these con-cepts to the social process of “new world making” (Czarniawska & Wolff, 1991) is poorlyunderstood. However, the processes of “reality construction in, between and around orga-nizations is poorly understood in organisation studies generally” (Karreman & Alvesson,2001, p. 60). It is held here that the process of integrating storylines with tacit plots thatare elaborated through a contextualizing narrative structure offers a practical way forwardfor research on processes of social construction. It could be argued further that becausethe entrepreneur and his or her stakeholders offers us a scene of a smaller more man-ageable size and complexity than large organizations it is extremely well placed to leadthe development of understanding of social construction. Chia (1996) reminds us that thefield of entrepreneurship has an inherent need for “intellectual entrepreneurship” andSwedberg (2000) argues that we need “practical knowledge” (Hayek, [1945] 1972) tobetter understand “the concrete ways in which entrepreneurs locate and exploit opportu-nities” (Swedberg, 2000, p. 10). The rest of this section aims to give a brief indicationof how use of the storylines–emplotment–narrative structure framework could achievethese twin goals.

The SENSE framework offers a singular understanding of the social order as it isvariously manifest in the concepts of social embeddeness, social capital, social networks,

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business models, entrepreneurial personal theory, vision, and innovation. All of these con-cepts can be viewed as products of entrepreneurs’ and stakeholders’ narrative and dra-matic interactions. Each of these arenas reflects sense making and action making that issubject to actors integrating storylines with plots, contextualized in a narrative structure.The relative play of different storylines, plots, and narrative structure offers new insightsinto institutionalization and agency, or processes of cultural reproduction and creativity.The SENSE framework locates these dynamics in the positioning of individual and col-lective identities and the expression of emotions through narrative and dramaticprocesses.

Hence the SENSE framework can be used to rigorously analyze business develop-ment or inertia that is currently rather poorly “explained” by the presence or absence ofsocial capital or social networks, or by the effectiveness or ineffectiveness of businessmodels, personal theory, vision, or innovation. For any given social order we can ask;what is the narrative structure sustained by different actors? i.e., How are they makingsense and making action through the elements of the pentad? (How are they enactingagent, purpose, scene, agency, and act?) How many different narrative structures are thereamongst different groups of actors? What tacit plot does the narrative structure elaborateand contextualize? Which events and actions have been selected from storylines to sustainthis particular plot and narrative structure? Which agents or identities have been mostinfluential in this process? How were individual and collective identities characterized?Which emotions appear to have been most influential in the process? Which identities,emotions, and plots have been forgotten or excluded from today’s narrative structure?How has the SENSE process changed over time?

Such empirical questions raise important theoretical debates about the nature of emo-tions, power, and narrative integration. Here it is only appropriate to make a few briefobservations. The emotions (positive and negative feelings) that help generate storylinesand guide the tacit selection of plots and via evaluative themes shape the narrative struc-ture can be thought of as rhythms in the body, located in bodily experiences (Damasio,1994). How emotional rhythms interact with narratives (following, leading, growing orsubsiding for example) is an empirical question, but we might expect to find the influenceof identity, values, relationships, and fantasy (Gabriel, 1995, 2000; Karreman & Alvesson, 2001). Emotions are central to Gergen’s (1995) theory of relational power. Here,socially constructed local realities or ontologies produce understandings of what is rightand good, and those who feel excluded from the social construction process are moved tosubvert this ontology with an alternate reality, with competing notions of what is right andgood. In other words these dynamics of inclusion and exclusion privilege participation insignificant organizing narratives. In Gergen’s (1995) view organizations need to be goodat both developing local ontologies and listening to and adapting to alternative realities.Examination of the SENSE process should show how this is or is not achieved by entre-preneurs and their stakeholders. For example, periods of routinization and major adapta-tion or crisis may correspond with periods of consensus and conflict around the plot andnarrative structure amongst groups of stakeholders. The interplay of emotions and rela-tional power between groups is directly linked to the sense of drama theorized in con-structionism. In so far as interpretations of the past, current, and future differ the absenceof narrative integration ensures social drama. The narrative integration achieved in anynarrative structure is a shared means of making events intelligible and does not necessar-ily imply shared meanings. Narrative structures are temporally and spatially bound phe-nomena. We should expect entrepreneurial firms to be associated with conflict anduncertainty as much as progress and harmony. In other words, engagement in downfalls,contests, and scams should be as familiar as engagement in quest plots.

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It follows that it could be productive to view the “development logic” of the firm(Frank & Lueger, 1997) as a narrative structure created through the SENSE process. Thisclaim can be illustrated by reflecting further on the contrasting principles of adapta-tion/active learning and inertia/routinization highlighted at the start of this article (Baron& Hannan, 2002; Baron et al., 1999; Gersick, 1991; Rae & Carswell, 2000, 2001). It wasnoted in the introduction, notions of personal theory and organizational models used toexplain adaptation and inertia resemble the concept of “dominant logic” (Bettis & Prahalad, 1995; Prahalad & Bettis, 1986). The dominant logic is a prize-winning conceptin the strategy field that is conceived as a cognitive filter that logically precedes organi-zational learning. It reflects managers’ experience, but is largely unrecognized by man-agers themselves, it is stored via shared schema, mind-sets, or cognitive maps, and ismanifest in “the way in which managers (in a firm) conceptualise the business and makecritical resource allocations” (Prahalad & Bettis, 1986). As such managers’ belief struc-tures and frames of reference are intimate aspects of the dominant logic. Bettis and Prahalad (1995) argue that the dominant logic “is inherently non-linear, with impact oftenout of proportion to its inherently subtle nature” (ibid. p. 11). It should be thought of asan emergent property of a complex system alongside features like political coalitions andinformal structure. It reflects a local equilibrium and change in the dominant logicrequires unlearning, which is unlikely to occur without a substantial organizationalproblem or crisis. The SENSE framework provides a systematic approach to investigat-ing the development, transformation, and variations within the shared schema, mind-sets,or frames of reference that underpin the dominant logic, or personal theory or organiza-tional models of small businesses. This approach is a significant development over Raeand Carswell (2000, 2001) because the authors view “life stories” as a method for theresearcher to capture individual learning. Here the SENSE framework is a systematicapproach for capturing the collective positioning of identities and actions that establishontology and precede collective learning or inertia. This also extends current accountsof inertia beyond reliance on political interests (Baron & Hannan, 2002; Baron et al.,1999) or conformance to externally legitimated templates (DiMaggio & Powell, 1983;Meyer & Rowan, 1977).

Beyond specific studies of learning and inertia in small firms the SENSE frameworkcould equally be applied in broader studies of social capital and networking, and orga-nizational development involving shared visions and innovation. Most of these topicsshare an interest in how trust is created (for example, see Larson, 1992; Larson & Starr,1993; Nahapiet & Ghoshal, 1998). From the narrative view developed here, trust couldbe considered as an outcome of a skilled interaction that is manifest in the coproductionof storylines and narrative structure and the coproduction of notions of identity and orga-nization. This view is quite consistent with the view that learning organizations copro-duce visions (Senge, 1993) and very successful companies coproduce their businessmodels by an extended iterative process of dialogue and action (Collins, 2001). Downing(2000) argued that only the quest plot would be able to sustain the trust needed to supportlearning or innovation to create a distinctive or core competence. This was because itwas argued that different plots were associated with different core emotions: the questwith satisfaction/happiness, the downfall with fear, the contest with anger, and the scamwith sadness. The consistency with which specific emotions are expressed with particu-lar plots, the consequences for trust, innovation, learning, and shared vision represent significant questions for future research.

We saw in the work of Lavoie (1991) and ethnography of Lindh de Montoya (2000)a keen appreciation of entrepreneurship as intensely social activity, embedded in localcultures, ethnicity, and gender. The SENSE process provides a consistent approach to

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exploring just how entrepreneurs and their stakeholders participate in interactions thatmake new worlds, or confirm established ones—locally and globally. The universalisticclaims of narrative theory offer great scope for international comparative studies andstudies of gender-related differences in entrepreneurship. The SENSE framework couldbe used systematically to establish national and gendered variations in entrepreneurialidentities and organizations. It could also be used to examine the way in which actorslike governments, regulators, nongovernmental organizations (NGOs) or media legit-imize new ways of socially constructing entrepreneurship. For example, furnishing con-cepts like social enterprise and sustainable enterprise. Agency depends in mostcircumstances on legitimacy. Until they are confirmed socially, entrepreneurs may appearto be cranks or misfits—once confirmed they appear visionary. We might suggest that formany entrepreneurs there is a fine line between the status of misfit and visionary, “failure”and “success.” For many these identities may be produced by their skilful participationin narrative and dramatic processes as much as the objective qualities of their productsor services.

Conclusion

This article has developed a consistent constructionist perspective that has identifiedthe narrative and dramatic processes amongst entrepreneurs and their stakeholders as aneglected but important subject of study. The SENSE framework was presented as a wayof understanding regular patterns of interaction amongst entrepreneurs and stakeholdersthat jointly produce entrepreneurial identities and organizations. The framework showshow storylines are selectively integrated with tacit plots that are elaborated and contex-tualized by a narrative structure. Initial comments have been given on how theseprocesses could enhance studies of business development and inertia, business modelsand learning, social capital, networking, vision building, and innovation.

Future conceptual development of the ideas in this article could usefully focus on“narrative voice” or rhetoric and the reflexivity of entrepreneurs, stakeholders, andresearchers. This article has focused on regular patterns and flows in narratives amongstpeople. Emotional, identity and relational power based influences on these flows havebeen uppermost in the discussion. Another influence on this flow is rhetoric (Eccles &Nohria, 1992; Fairhurst & Sarr, 1996) can also be analyzed as narrative voice (Pentland, 19992). Downing (1993) found evidence that rhetorical skills defined within adramatistic framework did distinguish between a small group of successful and less suc-cessful entrepreneurs and were related to self-efficacy. The integration of rhetoric withinthe SENSE process should offer an enriched and credible analysis of the duality of struc-ture and agency.

A narrative dramatic perspective is well placed to consider the reflexivity of actors,but due to space constraints this issue has not been an integral part of the argument. Aca-demics help constitute the canonical forms that provide typifications for entrepreneursand stakeholders to appropriate in narrative structures and development logics. This is

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2. Although Pentland draws upon an understanding of the elements of narrative that is similar to that devel-oped here, he takes them in an explicitly structuralist direction for analysis of organizational processes. Appar-ently believing that factors like technology are a generative mechanism independent of social constructionhe makes distinctions between aspects of narrative that can and cannot be considered “deep structure.” Theseimplications and the suggestion that researchers can create “whole stories” by assembling different partici-pants views are rejected by the poststructuralist assumptions here.

neatly illustrated in the “personal theory” of one entrepreneur studied by Rae and Carswell (2000) where an entrepreneur is quoted as saying:

“One of my favourite theories of business is that all businesses go through a cycle,and after a while lethargy sets in: you know it all, you’ve done it all before, you havegot to be right and that leads to deterioration and at that stage a good entrepreneurhas to identify that and has to do something about it” (ibid. p. 223).

As Jeffcutt (1994) has noted academics also construct identities and research projectsin plots like those described here. Thus a richer understanding of the duality of structureand agency would arise from a larger cast of reflexive actors in the social drama of entre-preneurship.

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I would like to thank Dalvir Samra-Fredericks for her suggestions on the structure of this article and the twoanonymous reviewers who provided challenging questions and feedback on the first draft.

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