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Entrepreneurship as a Collective Phenomenon1

by Bengt Johannisson, SIRE, Växjö University, 351 95 Växjö, Sweden

Tel: +46-470-708513, Fax: +46-470-821 23, E-mail: bengt.johannisson@ehv.hv.se

Abstract

Although there is an increasing consensus within the research community that

entrepreneurship should be perceived as an organising process involving many, little attention

has been paid to the genuinely collective features of entrepreneurship. Here entrepreneurship

is presented as a phenomenon that is as much the outcome of a joint effort as an individual

endeavour. Different images of collective entrepreneurship are introduced and categorised.

Theoretical implications include reconsideration of what unit of analysis to focus when

researching entrepreneurship. The conclusive lesson for practitioners is that measures should

encourage self-organising of entrepreneurial activity by supporting contexts and networking

rather than individual ventures.

A Tale of Two Twin and Contrasting Organisations

At the advent of those times that were to make Sweden into an important IT nation, two firms

were born the same year with the same vision: to provide small businesses with inexpensive

administrative software. The two firms both over the years grew to successful medium-sized

business and at the beginning of the new millennium they both organised about 400 people.

1 An earlier version of this paper was presented at RENT XII, Lyon, France. 26-27 November l998.

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Both are very visible on the market, often using spectacular means for promotion. In both

cases the path to success was creative organising, although enacted in constrasting patterns.

Inspired by the notion of ‘bunsha’ launched by the Japanese entrepreneur Kuniyasu Sakai,

Bert-Inge Hogsved, the founder of Hogia, split its operations and workforce into about

25 independent companies, each employing only between 10 and 25 people. He spends every

morning at the computer, using the internet to co-ordinate the overall business activities. The

managing directors of the corporate units proudly promote their businesses both internally

and externally. Bert-Inge Hogsved is heavily involved in community life, e.g. being on the

board of one of Sweden's major universities of technology. He and his wife Åse created

Sweden's the first computer museum, now donated to the university.

The other company, Scandinavian PC Systems (SPCS) was originally constructed as a

decentralised structure. The core original firm, founded by two partners, only employs about

50 people. The rest of the production personnel is employed by independent 'partner' firms,

most of them located within the same region. This virtual organising based on a bundle of

partnerships has created a very flexible and cost-efficient boundary-crossing organisation. In

l999 one of the founders, Jan Älmeby, left the firm, by then acquired by a Norwegian concern.

Three years later his launching a new venture within the same market segment. His new firm,

Fortnox, adopts the same organisational format as SPCS but offers small firms mobile

administrative services via the internet.

This two brief stories raise a number of questions. What are the major entrepreneurial

achievements in the two cases? Responding to market demand or practising organisational

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creativity? Are the dynamics created by the entrepreneurs, the organisational sub-units or the

relations between the persons and business units involved? What feeds the organisational

processes - intentional strategic action or self-regulating interaction between the units? Do

the two brief stories report individual or collective entrepreneurship?

How to organise seems to be the everlasting question whether we theorise or practice

entrepreneurship.

1. Entrepreneurship - Initiative or Collective Action?

Over the last 15 years or so, paralleling the institutionalisation of entrepreneurship as an

academic field in Europe, the search for the essence of entrepreneurship has been intense in

the global research community. Different proponents have tried to provide answers to

questions concerning what entrepreneurship is about, why it is carried out, when and where

entrepreneurship appears, and who the entrepreneur is, see e.g. Stevenson & Jarillo l990.

Scholars have felt a need to mobilise their critical mind to question laymen’s urge to model

entrepreneurship in flesh and blood, usually the lonely hero guided and energised by strong

willpower. Inspired by chaos theory some entrepreneurship researchers have proposed general

models reflecting the uniqueness of the venturing process by using chaos theory (Bygrave

l989). Others promote a narrative approach with no further pointers than the methodology per

se, see e.g. Steyaert (l997).

Among economists and management researchers the most popular approach has been to avoid

the entrepreneur as a human being of flesh and blood. Instead they argue that entrepreneurship

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should be looked upon as a function in the economy and the firm (e.g. Penrose l959/95),

carried out by managers taking on a particular role (e.g. Mintzberg l973). An opposite view

proposes that entrepreneurial capabilities are inherent in all human beings. 'Entrepreneuring' is

then an continuously ongoing process manifesting itself at certain times and in certain places

(Hjorth et al. 2002). Individuals who do not stand our as entrepreneurial in the business

context or at work may be creative organisers in the voluntary sector or in family life. As

children we all spontaneously expose our generically human entrepreneurial capabilities. Few

of us, though, remain playful as adults practising the same worldview as Don Quijote.

Entrepreneurship researchers thus, independent of their definition of entrepreneurship, agree

upon that most business starters soon enough stiffen into owner managers guided by routines.

Explaining individuals’ entrance into and exit from the entrepreneurial scene, writers usually,

depending on their paradigmatic outlook, refer to contingencies or context. Czarniawska-

Joerges & Wolff (l990) argue that our need for leaders, managers and entrepreneurs varies

over time. Baumol (l996) provides a historical perspective on how the institutional context

defines whether the market or any social arena will attract those human capabilities, e.g.

ingenuity and ambition, we today associate with entrepreneurship. Organisation researchers

early argued that individuals are expected to behave in a more or less entrepreneurial way,

contingent upon on the complexity and dynamics of the environment (Burns & Stalker l961).

An alternative image is that the individual entrepreneur soon enough becomes absorbed by an

inseparable part of the new-venturing process. This view guides Gartner (l989), who uses the

dance-metaphor to provide a generic image of entrepreneurship: a dynamic process about

which it is impossible to state what is contributed by the entrepreneur (the dancer) and what

by the dance itself. As we know, most dance performances are collective. Gartner also

presents entrepreneurship as an enactment process indicating that entrepreneurship is

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primarily a social, interactive, phenomenon (Gartner et al. l992). Thereby he in an even more

fundamental way indicates the collective nature of entrepreneurship.

Most of the debate concerning the essence of entrepreneurship has, though, brought up views

placing the individual at the centre, we here want to argue that entrepreneurship is a

generically ‘collective’ phenomenon. Collective phenomena are most certainly social,

reflecting interactive human conduct. According to The Oxford English Dictionary l961/l933

a ‘collective’, as opposed to individual, is ”a number of individuals taken or acting together”

and ”taken as a whole”. Focusing on 'collective' as a root metaphor we want to on the one

hand challenge those reducing entrepreneurship to a (managerial) role or individual heroic

deeds, on the other preserve the image of entrepreneurship as a generically human endeavour.

The challenge then is to keep the contributing individuals with their values and feelings

visible so that they are not absorbed by an abstract process directed by administrative

technology. Neither do we want to present entrepreneurship as a stream of activities where

emerging patterns primarily are the outcome of chance or follow a predestined path. In our

mind human vision and willpower, initiative and passion, as demonstrated by individuals as

complete human being and not as role takers alone remain unique features of entrepreneurial

endeavours. The entrepreneurial venture then presents itself as socially constructed which

again underline that only in dialogue with collective forces will these individual

characteristics make entrepreneurship happen.

The image of entrepreneurship as a collective phenomenon thus lends itself to at least three

interpretations: a) collective entrepreneurship is a special kind of entrepreneurship; b)

entrepreneurship is generically collective; and c) adopting social constructionism as a

paradigmatic perspective presents all 'real' phenomena, including entrepreneurship, as social

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or collective. The first notion of ‘collective entrepreneurship’ appears as a subset of the

general category ‘entrepreneurship’ also including individual entrepreneurship.

Entrepreneurship as a generally collective proposes that entrepreneurship is made intelligible

only when it is seen as a collective endeavour. As a collective phenomenon entrepreneurship

is reflected in the very interaction between a set of actors, albeit with different individual

capabilities. The third view signals on one hand that every understanding we have of

entrepreneurship, whether ascribed to individuals or collectives, is the outcome of both

individual imagination and social interaction, on the other that the outcome of any proposed

image remains open for different interpretations. Our ambition here is however not to rewrite

our understanding of entrepreneurship in a constructionist perspective. we confine ourselves

to an attempt to demonstrate what insight may be gained by seeing entrepreneurship as

collective (i.e. the second view), mainly leaving ontological and epistemological issues aside.

With Reich’s (l987) seminal article as a major exception, entrepreneurship has in historical as

well as modern times mainly been associated with individual adventurous projecting. There

are many possible reasons for making the strong-willed individual the emblem of

entrepreneurship. First, to both researchers and practitioners individual exploration guided by

curiosity and driven by willpower is much more comprehensible than the social interplay that

constitutes entrepreneurship as a collective phenomenon. Second, constructing

entrepreneurship as collective phenomenon may cause ideological confusion. Socialists want

to give capitalism a face, that of the individual owner-manager, and individual property rights

are the hallmark of capitalism. Even in Sweden as a welfare state the notion of ‘collective’

signal an attack on private proprietorship, most clearly stated when wage-earner funds where

created in l984 to redistribute corporate profits (Johannisson l987). Thirdly, as an individual

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endeavour entrepreneurship can be reduced to ‘irrational’ behaviour which in turn can be

marginalised in a society worshipping managerialism (Deetz l992, Hjorth et al. 2002).

Advocating entrepreneurship as a collective phenomenon calls for a definition of

entrepreneurship that constructs different images of the phenomenon. we agree with those

who perceive entrepreneurship as projecting according to opportunity, thereby deploying

resources, whether legally owned or controlled by way of networking. Furthermore, we argue

that entrepreneurship is about three-dimensional (re)creation: conceptual imagination,

organisational variability, and flexible practice. The new-venture concept must be both

abstractly envisioned (conceptualised) and concretely enacted (materialised) on the market

and this dual mental and material construction process can only be dealt with if accompanied

by convincing and committing other agents about the benefits of the new venture to them

(organising). In this way the differences between what is real, in the sense of being objective,

and not real, realistic and unrealistic, dissolve - as do the boundaries between venture and

context, between individual and collective action.

Within a social-constructionist perspective this becomes obvious, see e.g. Gergen l995.

However, most constructionists end up as institutionalists with little belief in individual

initiative and impact. In the context of entrepreneurship the power of the individual cannot,

though, be neglected. There will be no interaction without an individual initiative, as much as

venturing without mutual benefits for the parties involved will not last. Focusing

entrepreneurship as organising renewal thus must recognise both individualistic and

collectivist images of entrepreneurship.

Our view of entrepreneurship is closely associated with that of Bouwen and Steyaert (l990)

and their image of the venturing process as the weaving of a texture out of activities and

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personal networks. However, we want to give more emphasis on social processes across fuzzy

firm boundaries. This image enforces our concern for ‘collective entrepreneurship’, where on

one hand the ‘collected’ individuals retain their identities throughout the venturing process, on

the other the venture itself only represents a subset of higher societal echelons

Our basic propositions thus is that a better understanding of entrepreneurship will be achieved

if all enterprising and organising, including entrepreneurial venturing, are recognised as

generically collective. Here we want to demonstrate that this collective image of venture

projecting applies from the gestation period and throughout the existence of the firm. On a

higher level of analysis the collective feature of entrepreneurship becomes even more

obvious. Spatial business systems are assumed to demonstrate 'collective' efficiency (Schmitz

l995), a building block within collective entrepreneurship, as well as learning capabilities, see

e.g. Maskell & Malmberg l999.

The paper is organised as follows. In the next section we briefly elaborate on the notion of

‘collective entrepreneurship’ and in the third section a number of empirical representations of

collective entrepreneurship is presented. In Section 4 the entrepreneurial context itself as a

genuinely collective phenomenon is introduced. The concluding section provides some

reflections concerning the theoretical and practical implications of the view on

entrepreneurship as collective and ideally self-organsing.

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2. Entrepreneurship - Individual and Collective

The general image of entrepreneurship and small business, whether entrepreneurship as new

venturing or as a well-established small-scale family-operated firm, is a one-person effort

with one business unit as the 'only' achievement. This is not per se surprising considering that

living through the founding of one firm will suffice to satisfy most founders' urge to create

and gain independence. Also, it usually takes about a generation to build a medium-sized

successful business. Faster and further growth, let alone multiple firm ownership, may even

be dysfunctional considering the existential ambitions since advanced venturing will increase

dependence upon different resource provides thus reduce independence. Nevertheless some

entrepreneurs initiate several ventures and sometimes entrepreneurship originate in the joint

effort of many.

Figure1 Alternative Images of Entrepreneurship

Single venture Multiple ventures

Individual

entrepreneur

Traditional image of

entrepreneurship

Portfolio

entrepreneurship

Serial

entrepreneurship

Multiple entrepreneurs Collective entrepreneurship

Figure 1 suggests that a number of forms of entrepreneurship are discernible already when the

individual entrepreneur is focused. Multiple venturing or ‘habitual entrepreneurship’ means

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that several ventures are run simultaneously (‘portfolio entrepreneurship’) and/or sequentially

(‘serial entrepreneurship’). Both kinds of entrepreneurship are quite frequent for various

reasons, e.g. unused or not fully exploited resources (or opportunities!), as pointed out by

among others Penrose (l959/95), the need for revenge due to business failure and 'temptations'

on the market. In an increasingly turbulent networked economy venture as much as product

life cycles get shorter which means that continued entrepreneurship calls for several start-ups

to make a life-long entrepreneurial career. The fact that entrepreneurship increasingly gets

associated with multiple venturing orchestrated by one entrepreneur raises several theoretical

and methodological questions. Researching habitual entrepreneurship, see e.g. Rosa & Scott

l999, signals the importance of making the entrepreneur/owner-manager, not the individual

venture, the focal unit of analysis.

‘Collective’ in the context of entrepreneurship and small business carries alternative meanings

in society, from petite bourgeoisie as a class to professional associations that are established

in order to organise independent businesspersons. However, in these cases the main aim of the

collective mobilisation seems to be to protect the individual freedom of each businessperson.

Such images present collectives as aggregates of individuals with little direct exchange. The

notion of collective I have in mind rather relates to Tönnis notion of ‘Gemeinschaft’ and the

Krapotkinian image of ‘mutual aid’ and solidarity. These images point the direct interaction

between members of the collective. Such exchange may even on a traditional market not only

triggered by calculated self-interest but also by shared values, norms and mutual sentiments

(Sjöstrand l997). As we have stated elsewhere, e.g. Johannisson l987a, 2000, these ‘social’

motives for exchange are as crucial in the venturing process. 'Irrational’ aspects of business

exchange such as mutual commitment and trust, making the 'personal chemistry fit', and

'having fun' are a part of everyday life in the world of business. Our uneasiness when dealing

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with these issues in business contexts often makes us avoid these aspects. Here our academic

institutions have a special responsibility, often neglected though. Professional training make

managers disregard the social dimension of venturing.

We thus assume that the ability to build and exploit social resources creates a platform for

offensive venturing. All economic activity is socially embedded (e.g. Granovetter l985, Uzzi

l997, Johannisson et al. 2002) and its benefits are especially well demonstrated in the

literature on industrial districts and associated phenomena, cf. below. Research concerning

ethnic enterprise makes the role of the social community as a platform for venturing even

more obvious, cf. e.g. Light & Gold 2000. Social and economic forces reinforce each other in

the venturing process.

The interplay between individual and collective dimensions of entrepreneurship may be

studied levels of analysis above the individual venture. Hofstede (l980) in his much-quoted

study of work-related national value systems identified the continuum individual-collective as

one of four basic dimensions. Entrepreneurship then is associated with individualism. Tiessen

(l997), however, challenges this view and proposes that individualism and collectivism make

separate dimensions that both contribute to entrepreneurship. Strong-willed individuals

guarantee variety in terms of business ideas but when resourcing their ventures, collaboration

with others becomes salient. Tiessen's approach is interesting since it bridges between the

venture and societal levels of analysis. Our concern, though, is whether ventures have

internalised collective features or not.

Collective forms of entrepreneurship may differ with respect to e.g. governance structure

(hierarchy/networks/standards (routines), the strength and/or formalisation of the ties between

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units, the fuzziness of the boundaries of the collective, and the importance of physical and

social proximity. Structuring different images of collective entrepreneurship two divides in

our mind stand out: that between an individual and a collective agency and between

calculated (economic) and social commitment as a basis for involvement. Social commitment

based on shared values and/or affection, may be as instrumental as calculated commitment in

the venturing process. In Section 3 we present a number of examples of collective

entrepreneurship along these two dimensions while we in Section 4 associate collective

entrepreneurship with contextual entrepreneurial phenomena.

3. Images of Collective Entrepreneurship

Here we will provide different empirical categories of collective entrepreneurship. The

examples are by no means exhaustive. However we think that they provide a reasonably broad

set of illustrations to make the reader understand that the collective image of the

entrepreneurial phenomenon is well taken.

Firms and entrepreneurs emerging in and out of personal networks

Over the last two decades the network metaphor has invaded the social sciences. It is now

recognised that networking, personal, i.e. between individuals, as well as interorganisational,

are pivotal to business development in general and entrepreneurial venturing in particular.

Independent of what conceptual or methodological approach is adopted it is taken for granted

that firms in general exist in networks of different stakeholders (Nohria & Eccles l992).

Business operations mean collaborative efforts with customers, suppliers and further agents in

the commercial and institutional context. This is why e.g. inventive activity, often carried out

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in solitude, is far from entrepreneurial venturing and this is why the social skills are so

important to the entrepreneur. Entrepreneurs are always social constructors.

Personal networking is especially important in entrepreneurial venturing since it extends the

individual ambitions into a collective effort, thereby enhancing the entrepreneur’s self-image,

i.e. identity and self-confidence. The trust carried by personal networks mediates human as

well as financial capital and brings legitimacy to the emerging business. As a strategic

resource the personal network provides a learning context for both the entrepreneur personally

and her/his firm.

All human beings make sense by way of social interaction which means that entrepreneurs as

much as anybody else take their personal networks for granted. Human interaction constitutes

society (Berger & Luckmann l966). In social research, as well as in everyday practical life,

institutionalisation processes present reality as objective. However, as a social construct of

sense-making individuals society also remains ambiguous, open for many interpretations.

Entrepreneurs resist the objectification of reality and instead enact environment in such a way

that it promotes their vision. Persistent and frequent (inter)action helps the entrepereneur to

craft and control both the venture and the environment, cf. e.g. Carter et al l996, Sarasvathi

2001.

The entrepreneurial venture thus emerges out of the context of an existing personal network

created out of the entrepreneur's direct and indirect relations to other people, themselves in

turn differently interrelated. It is easy to imagine how a prospective entrepreneur tests her/his

venture concept on confidants in the personal network, whether family members, friends, or

an acquaintance with a relevant professional background. Some of these persons will

contribute with needed resources as the venture materialises. While some part of the personal

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network becomes internalised (as employees), most confidants will remain as an outside

reservoir. This 'personal community' provides a base for further venturing, cf. Johannisson

l992, 2000.

Family business

Most firms, new as well as established, are family businesses, i.e. operated by and for families

with the intention of keeping the firm within the family after succession. The family is a

dominant institution in most cultures and obviously a basic collective form of

entrepreneurship as well. A number of researchers point out that in the family business the

social and business systems overlap, see Brunåker l997 for an overview. Obviously the family

business is an arena where social concerns heavily influence the way the business activity is

organised and operated. The family business is usually paternalistically organised (Leimu

l985). Such a clan structure combines hierarchical control with brotherhood on the shopfloor

as well as with strategy making at the dinner table. Family and business lives integrate in way

that is conducive to organisational vitality (Johannisson 2002).

Partnership

Partnership is today in entrepreneurial contexts as much associated with the teaming up of

individuals for venturing as of established firms. As pointed out already by Reich (l987) the

venturing process is so complex and challenging that individuals with different competencies

must be brought together. Often the venture emerges out of a dialogue between a few

confidants in the personal network; ultimately integrated, well-calibrated dyadic relationships

constitute the successful partnership (Watson et al. l995). This means that persons who

mutually trust and understands each other constitute a partnership that is inseparably

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associated with the venture itself (Bouwen & Steyaert l990). Although the social interaction

between partners cannot itself explain economic performance, it is considered to be

indispensable for other aspects of venture success (Lechler 2001). Johannisson (2000) states

that the role of the personal network is as much created for existential reasons as for building

a business.

Strategic alliances and partnerships have today also become buzzwords for joint inter-

organisational efforts. Such partnerships are, whether triggered by a mutual need to control

the partner in order to reduce uncertainty or adopted as a way to jointly exploit business

opportunities. The notion of partnership is often extended to include small firms working

close together with customers and suppliers in order to create and market new products and

processes. As pointed out by Larson (l992) it is the interaction per se with competent external

partners which provides the entrepreneurial energy in many high-tech venturing processes. If

each contributor to the value chain focuses on its core competencies the whole chain will

become more vibrant.

Co-operatives

The co-operative is the most visible collective business form with a special formal structure

offering joint ownership and control. The co-operative appears as an especially relevant

venturing strategy in a context where values and needs are shared between people and when a

crisis calls for mobilisation of joint forces. However, as a formal double- hierarchical

structure (the shop-floor personnel on the board governs the CEO and (s)he in turn manages

the shop-floor personnel) the co-operative accommodates complex and rigid decision-making

processes. As much as these structural features may trigger a broad and persistent

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mobilisation, they may hamper entrepreneurial action and the adaptation of organisational

form to changing conditions. The success or failure of the co-operative as a formal association

is however context specific. In regions where co-operatives appear as the dominant form and

where further societal structures adopt similar organising principles, which is the case in

Mondragon in the Basque region in Spain, a comprehensive business and societal context is

created that is congenial to the co-operative, cf. e.g. Benton l992.

In Sweden there are few workers' co-operatives. It did not make sense to organise co-

operatively as long as the private and public sectors provided jobs, the public sector also

welfare, and the strong interest groups, not the least the unions, cared for democratic values.

In the l980s the situation changed and co-operative were then revived as important collective

form for mobilisation of firms needing reconstruction and of communities for the

revitalisation of a local identity. Also, with a shrinking and decentralised public sector in the

l990s a huge number of neo-cooperatives have been created in Sweden. Bridging the private

and public sectors, they enforce an emergent social economy and non-profit sector where

entrepreneurial drive and collective concern combine (Lindström & Wijkström l997).

Franchising

Franchise constructs offer the franchisee a shortcut to a business career and the franchiser an

amplifier of market penetration capacity. By design the franchising system is a hierarchical

and centralised structure. However, franchisees may very well establish horizontal ties to

peers creating a ‘shadow system’ which does not just reflect internal politics but may vitalise

the system as a whole by supplementing and challenging the formal structure, cf. Stacey l996.

Thus the franchising system, itself a joint and systematic effort to jointly exploit a trademark,

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also may invite to local collective action to improve the conditions for individual

franchisees/entrepreneurs.

The benefits and drawbacks of franchising as a strategy for (collective) continuously debated,

both from the point of view of the franchiser as well as the franchisee. Alon (2001)

demonstrates on a U.S. sample that the decision to franchise or to own is positively related to

size (number of outlets) and the spatial scope of operations but negatively related to e.g.

growth. Brodie et al. (2002) uses a UK sample to review the situation for franchisees in the

direct sales business. They conclude that the presumed independence of franchisees very

much is an illusion; whether it is maintained or not is very much conditioned by dominating

values in contemporary society.

Virtual organisations

In the contemporary network and informational society the traditional formal/legal

demarcation of the firm as an economic unit is challenged. The well-known trademarks we

are exposed to as consumers are often only a facade behind which there are a number of

firms, most of the anonymous, which jointly materialise the promises carried by the

trademark. This way of structuring economic activity is, though, not restricted to consumer

products and global trademarks: virtual organising is a generic mode of organising. The

collaborating firms may be spatially widely distributed and each firm's personnel in turn

scattered as well, working from their homes. Advanced information and communication

technology is then needed to make one organisation of all the contributors (Barnatt l995).

Such an organisation is addressed as virtual since its substance remains with the partners,

usually orchestrated by a leading firm. Borch (1999), contrasting the bureaucratic and virtual

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organisation, presents the latter as a flat and participatory structure encouraging initiative

from all involved, employees as well as external partners. Communication is rich and

unbounded and relational. Relational contracting rather than formal contracts dominate

business operations

In order to become sustainable virtual organising usually has to be socially enforced by way

of personal networking, initiated and maintain at social gathering across member firm

boundaries. The challenge is to make the customer perceive the virtual organisation as a

whole. Thus, while the value chain is the guiding line in creating horizontal or vertical

partnerships, the ‘value star’, i.e. the customised package of offerings (Normann & Ramirez

l994), give the virtual organisation its (joint) customer focus. In the introductory brief

narrative, a virtual structure (SPCS) was illustrated.

We here present the virtual organisations as the outcome of strategic design of a construct that

combines calculative and collective features. Virtual organising bridges back as far as to

proto-industrial times. Both then and in the contemporary society the consumers are presented

the outcome of a complex inter-organisational endeavour and in both cases home-working is

encouraged. Then as well as nowadays there seems to be a need for a hub organisation to

make the virtual organisation appear as a unit. In the Third Italy industrial districts it is the

‘impannatore’ who orchestrates the localised small-scale industry. In the virtual structure it is

usually a larger, resourceful member firm that is seen as a guarantor by the customer. What

differs between past and contemporary virtual structures is that spatial proximity is substituted

with computer technology and industrial goods with services, images and experiences.

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Extrapreneurship

Extrapreneurship is venturing strategy implying that the employee, encouraged by her/his

employer, creates a concerted spin off replacing the employment contract with a business

agreement (Johnsson & Hägg l987). It is a safe venturing strategy for employees with

competencies that are recognised by both the (former) employer and the external market. This

venturing strategy is supposed to be rational from both parties' view. Since the former

employee, now a novice entrepreneur, from the very start has a committed customer,

liabilities of newness are overcome. The preserved trustworthiness can be used to attract

further potential customers. The former employer still has access to the former employee’s

unique competencies, but with greater flexibility and less responsibility. The internal trust

relationship established during employment thus is transformed into external trust relations

and collective entrepreneurship.

Shopfloor entrepreneurship - self-organising groups and teams

Sweden and other Scandinavian countries have a long tradition of self-organising in groups

on the shop floor (in contrast to intrapreneurship (see below) that usually focuses middle-

management). To a great extent these organising efforts reflect legally enforced workplace

democracy and a traditionally high degree of unionisation in Sweden. But influence, however

achieved, may trigger entrepreneurial action. The empowerment of the personnel through

managerial measures has been the American way of creating an entrepreneurial atmosphere,

emphasised by Kanter (l983) buy originally brought up by Burns & Stalker (l961).

Only when the self-organising groups and empowered people are allowed to cross company

boundaries and deal directly with customers and suppliers will genuine entrepreneurial action

be possible (Hjorth & Johannisson l994). Self-organising is rather associated with

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spontaneous initiative than with the kind of designed efforts that come out of corporate

entrepreneurship programmes and democracy work. Introducing the notion of ‘team

entrepreneurship’ as a movement from below in the organisation, Stewart (l989) makes a

significant contribution to our understanding of intraorganisational self-organising. Ideally

this emerges when the ingenuity of the shop floor workers is challenged, e.g. by an influential

customer. The empirical setting of Stewart's study is a corporate small plant within the

automotive industry. The way the workers cope with the crisis situation is metaphorically

addressed by Stewart as 'running hot.' In his mind the entrepreneurial features demonstrated

by the blue-collar staff is genuinely collective: it does not reflect individual capabilities but

rather holistic action spontaneously organised from below. However ideal this appears with

respect to mobilising human capabilities and promoting democratic values there are many

obstacles. In a recent Swedish study, Forslund (2002) makes a systematic account of the

barriers to shop-floor entrepreneurship, obstacles originating in mutual misconceptions of

entrepreneurship that the management and the employees nurture.

Entrepreneurs as creating new styles of living

The images of entrepreneurship presented so far are collective as regards the way of initiating

and organising the entrepreneurial process, which in turn is assumed to penetrate the market

in the interest of individual customers. If however entrepreneurship is associated with the

creation of new ways, styles, of living, the collective dimension rather regards the outcome of

entrepreneurial processes. Spinosa et al. (l997) suggest that the ultimate function of the

entrepreneur is to change the world as reflected in human values, sense-making and

behavioural norms. In this perspective Henry Ford's entrepreneurship was not us much

reflected in the systematic practice of the assembly line for industrial production but its effect

on society in terms of providing reasonable inexpensive cars that made the broad population

mobile. The means to create new realities may be the same as those of the classic

Schumpetarian entrepreneur, namely genuine new knowledge and understanding efficiently

organised, but the ends may be totally different.

In Figure 2 the two dimensions 'agency' and 'commitment' used to position the different

empirical enactments of collective entrepreneurship proposed above (the image of new

ventures as emerging out of personal networks is as an illustration however replaced with the

positioning of the 'classic' entrepreneur). The subject may, ideally, be the individual with

her/his personal interests or the collective as a unified whole. Commitment may in principle

be either calculative or social, i.e. based on self-interest and shared values/mutual liking

respectively.

Figure 2 Structuring Collective Entrepreneurship - Subject and Commitment

Individual agency

Classicentrepreneurship

Extrapreneurship

Calculative

commitment

The family business

Virtual organising

Shopfloor teams

21

Collecti

Lifestyle- creating

entrepreneurship

Partnerships

Franchising

Co-operatives

ve agency

Social

commitment

22

4. Building an Organisational Infrastructure for Entrepreneurship

The logic of Figure 2 is that there is a point of departure for venturing in terms of a societal

arena and a functioning market. The notion of entrepreneurship as a collective phenomenon

may also refer to the initiative taken by individuals to create an arena to which other persons

are invited to carry out their entrepreneurial project. Entrepreneurs in developing (national)

settings, such as third world countries and the reformed Europe, have to, parallel to their own

commercial venturing activities, engage in the hands-on building of institutions to provide for

a context with minimum trust and needed real services. Such institutions include e.g. creating

trade and small-business organisations that in turn can establish own rules of the game and

lobby for the enactment of new legal frameworks for organising, e.g. franchising systems.

In the vocabulary used to construct Figure 2 this means a kind of collective entrepreneurship

that can not be associated with either of the four quadrants but refers the (oval) surface as a

whole. We then have a kind of collective in mind that aims at building a context for

entrepreneurial processes, themselves either originating in individual initiatives or collective

efforts.

Corporate entrepreneurship

Corporate entrepreneurship, is a concept associated with internal venturing within (usually) a

large corporation, This venturing strategy was brought up by e.g. Peterson (l981) and Peters

& Waterman (l982) popularised what it takes to make a corporate context favourable for

entrepreneurship. Burgelman's (l983) research into corporate entrepreneurship bridged the

corporate, strategic, and the individual, spontaneous, level. The 'intrapreneur', operating a

quasi-independent venture within the corporation as an arena for entrepreneurship, is expected

to team up with mentors who have the influence needed to release corporate resources for the

23

venturing process by tearing down barriers and 'open doors', se for example Pinchot l985. Yet

the very idea of intrapreneurship contains a contradiction: it only offers the intrapreneur ,

assumed to be driven by a need for independence, restricted freedom within the formal

corporate structure. Even if further layers in the organisation are committed to

entrepreneurship, cf. e.g. Stopford & Baden-Fuller l994, managerial need for control and

entrepreneurial need for independence remain in conflict (Hjorth & Johannisson l994). Thus

the intrapreneur may as much perceive the formal corporate context as a prison as container of

resources for enacting opportunities. Ideally, though, intrapreneurship is based on mutual

dependence, a symbioses, between the corporation and the individual. This means that

intrapreneurship is generically collective.

Intellectual Entrepreneurship

Entrepreneurship generally assumes the existence of a well-functioning market but this is not

enacted in all economies. In some contexts the rules of the market game must be enacted

before core entrepreneurial activities can be initiated. Thus the critical mind and broad

knowledge base that we associate with intellectuals is called for, already sharing need for

integrity with entrepreneurs. Johannisson et al. (l999) have introduced the notion of

'intellectual entrepreneur' to depict those people who mobilise their intellectual capabilities in

an entrepreneurial career. Their comparative case study of such entrepreneurs in Poland, the

USA, and Sweden indicates that intellectual entrepreneurs are much more frequent, and also

seemed much more needed, in the recently reformed Poland than in the two other welfare

states. Intellectual entrepreneurs use their influence and personal networks both as means for

enacting the environment of their ventures and to advance their personal learning. Contrasting

'academic' entrepreneurs, i.e. individuals who exploit their scientific, often narrow, knowledge

base commercially, intellectual entrepreneurs focus creative organising in their venturing.

24

Community Entrepreneurship

Elsewhere we have introduced the notion of ‘community entrepreneur’ to capture persons

who use personal networking to mobilise internal and as well as external resources to promote

local venturing processes (Johannisson & Nilsson l989). There may be several reasons for the

increasing interest in this particular field of entrepreneurship: awareness of the importance of

general social embeddedness of economic activity, the resurgence of local and regional

perspectives on economic development (Storper l995), and increasing concern for the moral

dimension of business operations. Relating to the terminology introduced by Putnam (l993),

community (or social) entrepreneurs are those who build and use social capital in a locality.

Henton and associates (1997) introduce the 'civic entrepreneur' and ascribe such

entrepreneurs five common traits (p. 34): 'see opportunity in the new economy; posses an

entrepreneurial personality; provide collaborative leadership to connect the economy and the

community; are motivated by broad, enlightened, long-term interests; work in teams, playing

complementary roles.'

As much as the corporate mentor who operates as a facilitator for the intrapreneur has a

commercial interest guiding her/his support, the community (or ‘social’) entrepreneur

obviously has a double social bias in her/his endeavour to mobilise collective entrepreneurial

resources. On one hand networking is both the aims and the means of the entrepreneurial

effort, on the other hand the relations being build include social as well as business concerns.

When focusing on the community context, social forces include a strong commitment to

place; such an identity may be enforced by way of ‘cultural entrepreneurship’ (Spilling l991).

Community as well as cultural entrepreneurship obviously mobilise collective entrepreneurial

forces by explicitly bridging the economic and social spheres of society.

25

Community entrepreneurs may, but do not have to, organise their own commercial ventures.

Their willingness and ability to create an arena for independent entrepreneurship remain their

unique characteristic. Since the image of the community entrepreneur has emerged in a

Western context, they usually are associated with mobilising in peripheral regions, usually

structurally but not necessarily institutionally disadvantaged. As indicated, individual

entrepreneurs in developing economies, often have to become involved also in institution

building to demonstrate social commitment thereby benefiting both their own ventures and

the economy as a whole, cf. Schmitz l995, Trulsson l997.

The industrial district

For a number of reasons we will elaborate a bit more upon the industrial district as the

materialisation of collective entrepreneurship. The image of the industrial district that I have

in mind is close to that of Becattini (l990:38): 'a socio-territorial entity which is characterised

by the active presence of both a community of people and a population of firms in one

naturally and historically bounded area.' First, in the industrial district entrepreneurship is

generically associated with the district as a whole, i.e. not with individual firms or separate

institutions. The dominant economic activity is carried out by traditional family businesses,

the majority of which having little interest and/or ability to grow. That is, the individual firms

are seldom entrepreneurial. Second, dense and 'lateral' information networks make the

community transparent to all its members. Third, the intricate social embeddedness of

business activity, which means shared identity and experiences as well as good will with

respect to supporting others, enforces trust and mutual learning. Fourth, a mature industrial

districts has the needed self-organising capabilities to maintain viability and a growth

potential, i.e. entrepreneurial processes are spontaneously initiated and maintained as an

outcome of intense interaction.

26

Lengthy, intermittent own empirical research substantiates different features of spatial

collective entrepreneurship, cf. e.g. Johannisson l983, l987a, l988, 2000 and Johannisson et al.

1994, 2002. The entrepreneurial, self-organising properties of the industrial district also imply

that it is difficult to tame spatial entrepreneurship by way of deliberate strategies. Intervention

in existing industrial districts may even undermine its entrepreneurial capabilities

(Johannisson 2000a). Systematic attempts to copy the organising features of the industrial

district, in e.g. in the creation of science parks, produce meagre results, cf. e.g. Massey et al.

1992.

There is much evidence that spatial clustering of small firms has generated wealth both in

Europe in general (see e.g. Piore & Sabel l984, Pyke et al. 1990) and also in the Scandinavian

countries (e.g. Illeris l992, Karlsson & Larsson l993, Isaksen l994, Johannisson et al. 1994,

2002, and Maskell & Malmberg 1999). In an increasingly global and networked economy

‘industrial districts’, nowadays more often (ad)dressed as subset of spatial 'clusters' also

covering local innovation systems and learning regions, seem to stay relevant. This

paradoxical fact, that increasingly global competition calls for local collaboration in our mind

reflects the genuinely collective entrepreneurial and learning capacity of the industrial district.

The most prominent Swedish industrial district, Gnosjö in the southern part of the country,

has about 80.000 inhabitants and 1.500 manufacturing firms. Gnosjö was the only region

where employment increased between l987 and l994, and during the l990s Gnosjö's economic

development outperformed that of the national capital, Stockholm.

Collective entrepreneurship in Gnosjö is reflected in an increase in the number of firms (the

region reports the highest start-up frequency within the manufacturing industry of all Swedish

27

regions) rather than by growing individual firms. As a collective the business community is

highly organised with respect to interpersonal networking with businesspersons deeply

involved in economic and social institutions. Available data concerning personal networking

between local entrepreneurs provide a unique possibility to depict the industrial district and its

organising features. These data are more extensively presented elsewhere (e.g. Johannisson et

al. 1994, 2002). The entrepreneurs in the Gnosjö industrial district build much denser

networks than the entrepreneurs in the Ideon science park (at the time of the study (l990) the

largest one in Northern Europe). Also, entrepreneurial networking is both local and global.

Self-organising means ability to on one hand adapt to external challenges by dampening

threats and exploiting opportunities, on the other amplify local innovations. Our own research

suggests that three conditions have to be met in order to make a small-firm cluster self-

organising. First, minimum 'variety' in terms of number of firms. Second, minimum

complexity with respect to networking between the firms. Third, tight embedding of the

business community in the local social setting.

From the point of view of individual owner-managers and her/his firms the industrial district

appears as an organising context. The organising context helps the owner-manager to cope

with an ambiguous environment by drawing upon the collective entrepreneurial features of

the district. Adopting a social-constructionist perspective, some features of the organising

context, thus a domicile for both collective entrepreneurship and individual venturing, are:

• The organising context represents a spatial part of the enacted environment that is

transparent and meaningful to its members and therefore spontaneously used by them as an

instrument to make sense of emerging local and global phenomenon.

28

• The organising context is jointly produced by businesspersons and other local stakeholders

as an outcome of social interaction due spatial and social proximity, making the context

and its members mutually dependent. The context constructs the individual as mych as the

context is constituted by interacting individuals.

• In the organising context business norms and values are embedded in the historically

generated and taken-for-granted social texture which makes it difficult for insiders to

explicitly identify cause-and-effect linkages in everyday (business) life, let alone for

outsiders to imitate.

• The organising context is enacted through personal networking where exchange provide

individual agents with detailed information, examples to use for analogy as well as role

models to follow. In the local business network vertical, horizontal and lateral relations

combine.

The industrial district provides an ideal setting for small owner-managers in their collective

enactment of entrepreneurial processes. First, shared local tacit knowledge and individual

personal integrity are both recognised. Second, the narrow personal knowledge base in the

small family business is enriched by way of an everyday dialogue with peers encouraging

learning by interacting in addition to learning by doing and using. Third, due to dense local

networking most individual global relations become a collective asset. Fourth, considering

that doing business is a way of life, i.e. a cultural feature, learning and the development of

competencies is closely integrated with ongoing societal and business activities, thereby

recognising the social and emergent character of entrepreneurship.

29

4. Conclusions - Reframing Entrepreneurship

In order to structuring our understanding of entrepreneurship, we in Figure 2 introduced two

dimensions: agency (individual/collective) and the commitment (calculative/social). The

argument is that it is deceptive, even contradictory, to give priority to either calculative or

social commitment in the pursuit of the generic features of entrepreneurship. Both

commitments are indispensable to make entrepreneurship intelligible as scientific construct

and justice as a force in contemporary society. Also, individual initiative is needed to enact

collective mobilisation. In the industrial district representing collective entrepreneurship,

individual venturing seems to be subordinate. Nevertheless collective entrepreneurial

processes may appear to be in such a setting, individual ambition, initiative and improvising

ability remain crucial. Even if individual entrepreneurs play a pivotal role in high-growth

companies, they remain extremely dependent upon their personal network when actualising

their entrepreneurial venture. Thus, entrepreneurship, whether primarily addressed as

collective or individual, will then only make sense and realise if individual and collective

images of the entrepreneurial phenomenon are jointly considered.

Bridging the individual and collective character of entrepreneurship, Weick's (l976) notion of

‘loosely coupled system’ offers a useful metaphor. It proposes that systems where units are

both autonomous and integrated have features that make the system viable also in complex

and dynamic environments. Analytically they suggest features of a self-organising system that

are similar to those we above generated out of industrial-district research. Autonomy, or

independence, then means that the individual components/nodes of the system keep each their

identity, integration that the components/nodes are interrelated, socially, functionally,

spatially, and/or temporally.

Figure 3 Supporting Self-Organising - Balancing Independence and Integration

In Figure 3 some

above are classifi

the presumed ent

organisations, or

figure presents th

businesspersons a

due to intense net

independent own

business network

individual initiati

Integration Industrialdistrict

Family business

30

Independence

of the different empirical images of collective entrepreneurship presented

ed according to the independence and integration of the units that constitutes

repreneurial structure. The interacting units may be individuals,

both as e.g. in the case of corporate entrepreneurship/intrapreneurship. The

e industrial district as a close to ideal self-organising construct: the

nd their firms remain formally independent while being highly integrated

working. The local entrepreneurial spirit, recognising the career as an

er-manager as a way of life, creates needed autonomy; dense social and

s enforce a culture that integrates all district members while thriving upon

ve and shared responsibilities.

Classicentrepreneur

Communityentrepreneurship

Co-operative

Partnership

Virtualorganising

Intrapreneurship

Team entrepreneurship

31

Ideally then, collective entrepreneurship reflects self-organising, i.e. a governance form

without any explicit permanent centre of influence. As a governance form self-organising

does not only differ from the hierarchy and the market but from the structured network as

well. The collective entrepreneurial function may, once spontaneously evoked be deliberately

executed e.g. when owner-managers jointly take the initiative to (make the municipality)

increase the level of public services. This parallels the argument the individual entrepreneur is

only mobilising part of an existing network when organising a specific new venture. Using

complexity theory metaphorically, unconscious self-organising properties may as well be

ascribed to such a human system with few internal and external boundaries and where a state

of 'bounded instability' is maintained (Stacey l996, Dandridge & Johannisson l996). Locally

the boundaries between private and professional lives, between business and social

communities, are perforated in order to build global alertness.

The other images of collective entrepreneurship presented above do not provide or balance

integration and independence well enough to generate self-organising. As regards e.g. team

entrepreneurship individuals remain integrated only in the production process; autonomy is

restricted by both technology and formal organisation. Intrapreneurs are neither autonomous

nor influential enough to balance the hierarchical control of the corporation and according to a

similar argumentation the franchising system seems too centralised. Partnerships between

firms on the other hand, especially if inter-organisational, are too fragile with respect to

shared history and potentially shared future to become self-organising. As a mobilising

structure co-operatives are too tightly coupled and community entrepreneurship easily

becomes too dependent on the initiating individual.

32

In a world characterised by both complexity and dynamics an action oriented and highly

integrated core must combine with generally permeable organisational boundaries. Industrial

districts obviously create local boundaries in space while project organisations are restricted

in time. Using the notion of 'operating adhocracy' already Peterson (l981) imaginised such

'temporary organisations' (Lundin & Söderholm l995) as building blocs making the formal

organisation. Elsewhere we have presented the entrepreneurial career as a set of ventures

integrated by way of the personal network of the entrepreneur (Johannisson l992, 2000).

The theoretical and methodological lessons from viewing entrepreneurship as (also) collective

thus includes dissolving boundaries not only within and between organisations but between

the business community and the environment as well. Even in a spatial setting, like the

industrial district, however precisely it may be spatially/technically demarcated, its features

remain socially constructed (Allen et al l998). What capabilities are associated with a locality

and its economic activities is an outcome of what self-image its members construct and what

features it is ascribed by other stakeholders.

There are several practical lessons to be made from the interpretation of entrepreneurship as

genuinely collective. First, the wishful thinking associated with ambitions to 'pick the

winners' becomes even more futile since entrepreneurship is associated with interaction

between many individuals and organisations and not with personal or organisational features

of a few. Second, self-organising means self-organising, i.e. there are, as indicated, limits to

induced strategies for the promotion of entrepreneurship. As pointed out, unreflected

intervention may even undermine existing spontaneous processes (Johannisson 2000a) as

much as taming the individual entrepreneur with planning technology may choke her/his

personal drive. Third, if business development is to be stimulated, measures should concern

33

staging activities, leaving individual initiatives to be organised 'locally'. Fourth, the variety

and adaptability that a challenging environment calls for will only be achieved if small-scale

venturing is encouraged - entrepreneurs running minor ventures themselves have to find the

way to combine into larger constellations. Fifth, while the notion of virtual organising is

usually associated with combining hitherto independent business units to furnish a new

business concept. Such organising may also operate the other way around. By cloning an

existing business to create variety and offer local autonomy, if combined with unbounded

networking, may make a vital context thriving on both individual and collective

entrepreneurship. This brings us back to our introductory brief narratives and their message

that entrepreneurship ultimately is about alternative ways of organising.

34

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