Reflective Judgement: Understanding Entrepreneurship as Ethical Practice

Recently, the ethical rather than just the economic resonance of entrepreneurship has attracted attention with researchers highlighting entrepreneurship and ethics as interwoven processes of value creation and management. Recognising that traditional normative perspectives on ethics are limited in application in entrepreneurial contexts, this stream of research has theorised entrepreneurship and ethics as the pragmatic production of useful effects through the alignment of public–private values. In this article, we critique this view and use Kant’s concept of reflective judgement as discussed in his Critique of the Power of Judgement to theorise ethical entrepreneurial practice as the capacity to routinely break free from current conventions through the imaginative creation and use of self-legislating maxims. Through an analysis of the narratives of 12 entrepreneurs, we suggest there are three dimensions to reflective judgement in entrepreneurial contexts: (1) Social Performance; (2) Public Challenge and; (3) Personal Autonomy. Whilst the entrepreneurs were alive to the importance of commercial return, their narratives demonstrated further concern for, and commitment to, standards that they rationally and imaginatively felt as being appropriate. In our discussion, we integrate the findings into existing theoretical categories from entrepreneurship studies to better appreciate ethics within the context of value creation.     

A bar too high? On the use of practical wisdom in business ethics

In the business ethics literature, many argue that managerial decision making ought to be improved by more robust ethical concerns. Some see the virtue of “practical wisdom” as the key for improved managerial decision making. However, because of the epistemic limitations confronting decision makers in the face of irreducible market complexity, there is a risk that practical wisdom, employed in the context of day-to-day managerial decision making, becomes an impractical concept. Nevertheless, if the attempt to incorporate virtue ethics (and its related concepts) into business practices is laudable, if indeed a virtuous life is worth pursuing and practical wisdom plays an essential role toward that end, it is important to attempt to salvage practical wisdom and uncover its appropriate usage. Thus, this article pursues two major ends. First, upon surveying some of the prominent and standard usages of the term, it articulates concerns, rooted in epistemic limitations, about the way that practical wisdom appears in business ethics literature. Second, it offers a new way forward for understanding “practical wisdom.” By contextualizing day-to-day, rule-based managerial decision making within the ethical value of the market order, practical wisdom reappears as the higher-order capacity to pursue vocations, as morally worthwhile projects, in business.     

The Spirit of Entrepreneurship and the Qualities of Moral Decision Making: Toward A Unifying Framework

At the heart of entrepreneurship are imagination, creativity, novelty, and sensitivity. It takes these qualities to develop a new product or service and bring it to market, to envision the possible impacts a new product may make and come up with novel and creative solutions to problems that may arise. These qualities go to make up what could be called the spirit of entrepreneurship, a spirit that involves the ability to handle the experimental nature of entrepreunerial activity. These same qualities are crucial for moral decision making, and an ethical approach which emphasizes imagination, creativity, and has an experimental thrust is much better adapted to the entrepreneurial activity and much more relevant to the unique situations that entrepreneurs face. In this sense, the process approach to ethics developed in this article is a unifying framework that brings together the activity of entrepreneurship and moral decision making.     

Integrating Pragmatism and Ethics in Entrepreneurial Leadership for Sustainable Value Creation

The relationship between entrepreneurship and ethics has largely been characterized as antithetical. In this article we develop a conceptual model integrating pragmatism, a philosophical approach that emphasizes experimentation and action characteristic of entrepreneurial leadership, with ethics to suggest that the two are not incompatible and that sustaining entrepreneurial leadership for value creation necessitates ethical action to build legitimacy. Case studies from the United States and India highlight the necessity of infusing pragmatism with ethics for sustainable entrepreneurial leadership.     

Practical wisdom as an adaptive algorithm for leadership: Integrating Eastern and Western perspectives to navigate complexity and uncertainty

In this paper, we integrate Eastern and Western perspectives of practical wisdom to answer the question, how can practical wisdom transfer across cultural boundaries in a world of increasing interconnection? We describe key properties of practical wisdom in early Western and Eastern schools of thoughts and explain how the concept of practical wisdom in ancient philosophy aligns with modern-day complex system science. We identify seven qualities of complex adaptive systems as a universal pattern that underlies both Eastern and Western perspectives. From these qualities, we develop an integrated conceptual framework of practical wisdom as factors both internal and external to the self that promote continuous coupling with the broader operating environment. We propose that practical wisdom functions as an adaptive algorithm capable of continuously evaluating its processing rules to maintain fit with the operating environment while generating ongoing novelty. This generativity expands developmental potential across multiple levels and fosters open-endedness, evolvability, and antifragility. With this functional understanding, ethics can no longer be marginalized—it must be recognized as the foundation for sustainable organizing because it reliably creates a network topology that makes innovation and long-term success possible. We close with actions leaders can take to foster practical wisdom.     

Action! Moving beyond the intendedly-rational logics of entrepreneurship

Entrepreneurial action is central to entrepreneurship theory, and is broadly seen to arise as a consequence of intendedly rational logics (whether causal or effectual), reflecting reasoned judgment. But, is this always the case? While entrepreneurial action may often be the result of a judgmental decision (between alternative courses of action/inaction), the presumption that reasoned judgment encompasses all the motives, modes and mechanisms leading to entrepreneurial outcomes seems dubious. Building on an emerging literature that seeks to address the boundaries of reasoned entrepreneurial action, we develop the notion that non-deliberative impulse-driven behavioral logics can also be the basis for business venturing. Our framework offers a complementary perspective to the intendedly-rational, deliberate logics perspective, opening novel pathways for future research and theory-building.     

Advancing Entrepreneurial Leadership as a Practice in MSME Management and Development

Consistent with recent studies, we emphasize that entrepreneurial leadership benefits from mutual cross‐fertilization between entrepreneurship and leadership, making it an effective mechanism for studying micro small and medium enterprise (MSME) management and development. Since it is an emerging concept and existing knowledge on MSME management and development so scattered, our comprehensive entrepreneurship and leadership literature review provided us in‐depth insights and new perspectives. From our analysis, a framework emerged mapping a new path for MSMEs. The model presents a nuanced leadership paradigm for small businesses. Thus, by presenting a mechanism that offers new methods aimed at managing and developing MSMEs, we extend existing leadership theories.     

Crescive entrepreneurship in complex social problems: Institutional conditions for entrepreneurial engagement

This paper explores entrepreneurship in the context of complex social problems (often referred to as ‘social’ entrepreneurship). Most management research in this area studies the entrepreneurs; we explore the institutional conditions which frame the likelihood of entrepreneurial engagement. We name these conditions ‘crescive’ and, following A.O. Hirschman's studies on institutional conditions for development we identify two analytically different sets of conditions: those that can stir up actors' motivations to engage and those that can alter their decision making logic. Our exploration of crescive conditions yields a novel conceptual model for entrepreneurial engagement in the context of complex social problems, which we label ‘crescive entrepreneurship’ and place in a space between functionalist and institutional action.     

Ethical Decision-Making in Corporate Entrepreneurial Organizations

No research thus far has attempted to examine ethical decision- making in corporate entrepreneurial organizations. Results of such study would provide management executives with insights on what action, if any, is essential for achieving business ethics and corporate entrepreneurship simultaneously. This paper argues, theoretically, that the work characteristics, organizational characteristics, and some individual characteristics in a corporate entrepreneurial organization are conducive to ethical decisions. These characteristics help mitigate the adverse impact of the turbulent environments on ethical decision- making behavior. Based on these arguments, a tentative model of ethical decison-making in corporate entrepreneurial organization is constructed.     

Aspirations,market offerings,and the pursuit of entrepreneurial opportunities

In this paper we focus on two core questions: 1) Why do some people seek entrepreneurial opportunities? 2) Under what conditions is the pursuit of entrepreneurial opportunity most likely? We attempt to answer these questions by creating a theoretical framework that considers the interaction between an individual's level of aspiration and their appraised value in the labor market. We propose that when there is disequilibrium between the aspiration vector (AV) of an individual and the perceived valuation of the market offering vector (P-MOV), an individual tends to pursue entrepreneurial opportunities. In addition, when hiring officers, HR directors, or other relevant parties involved in the hiring decision are biased or when existing organizations have limitations in reflecting an individual's AV, prospective entrepreneurs begin searching for new opportunities in society. Finally and in our view most crucially, we consider the interaction between an individual's subjective consideration and his perceived assessment by the labor market, a novel approach, which we hope takes into account the complexity and richness of entrepreneurship. We offer seven specific propositions that derive from the disequilibrium predicted by our framework.     

Navigating the highs and lows of entrepreneurial identity threats to persist: The countervailing force of a relational identity with God

While an economic paradigm has been productive for entrepreneurship, religion has been proposed as an alternative rationality to advance research in our field. To extend a theological turn in entrepreneurship and identity research, our study inductively develops a conceptual model that explains how individuals navigate entrepreneurial identity threats based on the interaction between a relational identity with God (RIG) and an entrepreneurial identity to persist in entrepreneurial action. Our study suggests this can happen when entrepreneurs engage in inter-identity work mechanisms - affirming and humbling - to mitigate these identity threats. Specifically, a relational identity with God acts as a countervailing force to an entrepreneurial identity during times of identity threats to generate inter-identity meaning change, resulting in interidentity stability and entrepreneurial persistence. Through our study, we advance knowledge on the theological turn in entrepreneurship and identity by inductively developing theory on a new religious identity construct (RIG), elaborating theory of inter-identity work by shifting the focus from structural to content changes, and extending theory on entrepreneurial action, persistence, and well-being based on theological rather than economic considerations.     

Entrepreneurship and well-being: Past,present, and future

Entrepreneurship research typically emphasizes firm-level outcomes such as growth and performance. However, people pursue entrepreneurship for deeply personal, idiosyncratic reasons. Therefore, as in other self-organized human pursuits, how entrepreneurship relates to fulfillment and well-being is of utmost importance. In this paper, we provide an overview of the well-being concept, related research, and its connection to entrepreneurship. We define entrepreneurial well-being as the experience of satisfaction, positive affect, infrequent negative affect, and psychological functioning in relation to developing, starting, growing, and running an entrepreneurial venture. We explain this definition of entrepreneurial well-being and review significant developments in our field and the broader field of well-being. Highlights of social, technological and institutional trends illustrate key areas for future research that can enhance our understanding of these phenomena. The eight papers in this special issue focus on entrepreneurial well-being each offering a specific perspective on how scholars can theorize and study the antecedents and consequences of entrepreneurship related to well-being.     

Introducing Practical Wisdom in Business Schools

This article echoes those voices that demand new approaches and ‹senses’ for management education and business programs. Much of the article is focused on showing that the polemic about the educative model of business schools has moral and epistemological foundations and opens up the debate over the type of knowledge that practitioners need to possess in order to manage organizations, and how this knowledge can be taught in management programs. The article attempts to highlight the moral dimension of management through a reinterpretation of the Aristotelian concept of practical wisdom. I defend the ideas that management is never morally neutral and that Aristotelian practical wisdom allows the recovery of moral considerations in management practice. I analyze the impact and implications that the introduction of practical wisdom in business schools entails for the conception and objectives of management education. This view reconfigures management education in terms of attention to values, virtues and context. Therefore, management programmes should prepare students to critically evaluate what they hear and to make decisions coherent with their values and virtues. In the final section, I reflect on the pedagogical implications of this approach. I point out that an integrated model of ethics and practical wisdom promotes education of cognition and education of affect as well. I provide an example to illustrate my perspective and to support my conclusions.     

In search of a fitting moral psychology for practical wisdom: Exploring a missing link in virtuous management

While business as a social activity has involved communities of persons embedded in dense relational networks and practices for thousands of years, the modern legal, theoretical psychological, and moral foundations of business have progressively narrowed our understanding of practical wisdom. Although practical wisdom has recently regained ground in business ethics and management studies, thanks mainly to Anscombe's recovery of virtue ethics, Anscombe herself once observed that it lacks, and has even neglected, a moral psychology that genuinely complements the nuanced philosophical perspective of a virtue-centered moral philosophy. Herein, we offer one way to fill this gap by suggesting two opposing psychological paradigms, namely the inter-processual self and the autonomous self, which are classified according to the assumptions they make about the self, human agency and action more broadly, as well as how they relate to practical wisdom. Upon presenting these moral psychologies, we will bring this proposal into conversation with business ethics to show how the IPS paradigm can enable and support virtuous management.     

Development of a conceptual model to understand international social entrepreneurship and its application in the Ugandan context

While the concept of social entrepreneurship is relatively new, initiatives that employ entrepreneurial capacities to solve social problems have existed throughout history. In this paper, the factors explaining international social entrepreneurial behavior are investigated. The key argument is that behavioral potential, which is at the cognitive level, is influenced by an individual's perceptions toward social enterprise venturing. These perceptions could be related to feasibility, desirability, or propensity to act, among others. Personal, sociological, and environmental variables are linked to decision making through these perceptions. This research is based on literature review and case studies. The analysis indicates that individuals' perceptions or attitudes can explain aspects of their international social entrepreneurial potential. Areas for future research are discussed.     

Innovations, Stakeholders & Entrepreneurship

In modern societies entrepreneurship and innovation are widely seen as key sources of economic growth and welfare increases. Yet entrepreneurial innovation has also meant losses and hardships for some members of society: it is destructive of some stakeholders’ wellbeing even as it creates new wellbeing among other stakeholders. Both the positive benefits and negative externalities of innovation are problematic because entrepreneurs initiate new ventures before their private profitability and/or social costs can be fully recognized. In this paper we consider three analytical frameworks within which these issues might be examined: pre-commitments, contractarianism, and an entrepreneurial framework. We conclude that the intersection of stakeholder theory and entrepreneurial innovation is a potentially rich arena for research. Nicholas Dew, Ph.D. is an assistant professor at the Naval Postgraduate School in Monterey, CA. He teaches strategic management in private and public sector organizations. His research interests include entrepreneurship, strategy and innovation. He has published in several scholarly journals, including Strategic Management Journal, the Journal of Business Venturing, Industrial and Corporate Change and the Journal of Evolutionary Economics. Saras D. Sarasvathy, Ph.D. is an associate professor at the Darden Graduate School of Business Administration. She teaches courses in entrepreneurship and ethics in Darden's MBA and doctoral programs. Her research focuses on the cognitive basis for high-performance entrepreneurship. She has published in various scholarly journals, including the Academy of Management Review, Strategic Management Journal, the Journal of Businesss Venturing and the Journal of Evolutionary Economics. Her first book Effectuation: Elements of Entrepreneurial Expertise was recently published by Edward Elgar.     

Entrepreneurial Orientation and International Performance: The Moderating Effect of Decision‐Making Rationality

This research examines how entrepreneurial orientation (EO) influences international performance (IP) of the firm taking into account the moderating effect of decision‐making rationality (DR) on the EO–IP association. Such an investigation is significant because it considers the interplay of strategic decision‐making processes supported by the bounded rationality concept in the entrepreneurship field. Drawing from a study on activities of 216 firms in the United States and United Kingdom, the evidence suggests that DR positively moderates the EO–IP association. The findings suggest that managers can improve IP by combining EO with rational (analytical) processes in their strategic decisions.     

Innovation, rule breaking and the ethics of entrepreneurship

This article examines a feature of the ethics of entrepreneurship that is infrequently directly discussed, viz., rule breaking. Entrepreneurs are widely said to engage in rule breaking. Many examples of this appear in popular and academic literature. But how may this be integrated into an account of the ethics of entrepreneurship? One response would be that when entrepreneurs break legal and moral rules then what they do is wrong and ought to be condemned. There is a great deal to be said for this rule model of entrepreneurial ethics. However, this view is also mistaken. Instead, this article defends a virtue-based account of the ethics of entrepreneurship in which certain instances of rule breaking, even if morally wrong, are nevertheless ethically acceptable and part of the creative destruction that entrepreneurs bring not only to the economy but also to morality.     

The community dynamics of entrepreneurship: The birth of the american film industry, 1895–1929

This paper provides insight for practitioners by exploring the collective process of entrepreneurship in the context of the formation of new industries. In contrast to the popular notions of entrepreneurship, with their emphasis on individual traits, we argue that successful entrepreneurship is often not solely the result of solitary individuals acting in isolation. In many respects, entrepreneurs exist as part of larger collectives. First and foremost, there is the population of organizations engaging in activities similar to those of the entrepreneurial firm, which constitute a social system that can affect entrepreneurial success. In addition, there is also a community of populations of organizations characterized by interdependence of outcomes. Individual entrepreneurs may be more successful in the venturing process if they recognize some of the ways in which their success may depend on the actions of entrepreneurs throughout this community. Thus, we urge practitioners and theorists alike to include a community perspective in their approach to entrepreneurship. We also suggest that one way of conceptualizing the community of relevance might be in terms of populations of organizations that constitute the value chain. For example, in the early film industry a simple value chain with three functions—production, distribution, and exhibition—is a convenient heuristic for considering what populations of organizations might be relevant. As we show in our case study of that industry, a community model offers insights into the collective nature of entrepreneurship and the emergence of new industries.Our basic thesis is that the role of entrepreneurship in the creation of new industries can be conceptualized in terms of the dynamics of a community of organizational populations. At least three implications of this view may be important for practitioners. First, the kind of widespread and fundamental economic and social change that has often been linked with entrepreneurship requires a variety of behaviors. While most definitions of entrepreneurship have recognized that entrepreneurship requires the introduction of innovation, they have tended to ignore the importance of behaviors that subsequently support that innovation. To encompass these important behaviors, we believe that a broad definition of entrepreneurial behaviors is justified. To capture this, the framework of entrepreneurial behaviors that we develop includes the variety of behaviors that are important to the success of a collective process of entrepreneurship. We believe that recognition of a variety of different behaviors that are important to the success of the entrepreneurial process can help practicing entrepreneurs to understand more fully the complex dynamics of new industry creation. In terms of our framework, the range of behaviors of potential importance to entrepreneurship includes all of the following: creating a firm that innovates, creating a new business that imitates the practices of others, innovating within an existing business, and imitating by creating change in an existing business. In addition, we recognize that the kinds of innovative change that support entrepreneurship in the context of new industry creation are not narrowly technological; other kinds of product and service changes as well as administrative innovations may also be relevant.Second, entrepreneurship in one part of the community often creates the opportunity for entrepreneurial activity elsewhere in the community. For example, the founding of movie palaces did not begin until feature length films appeared. The challenge for entrepreneurs is to recognize these opportunities and act on them. Third, and related, the long-term success of entrepreneurial behaviors in one population of the community frequently requires that supportive entrepreneurial behaviors occur in other populations in the community. For example, the success of feature length films was hastened by the development of distribution organizations to replace traveling shows and localized markets. Their success was also hastened by the movement away from nickelodeons towards larger, more comfortable exhibition outlets, such as theaters and show palaces. When the interdependence among populations in the community is stated this way, another challenge to entrepreneurs becomes clear: the facilitation and encouragement of supportive behaviors in other populations.We are not the first to propose that the community is important, but we contribute to this idea by showing in a specific context how various types of behaviors interact and ultimately promote entrepreneurship throughout the community. Our contribution for practitioners is twofold. We would urge practitioners to consider the variety of behaviors necessary to create, reinforce, and maintain fundamental and widespread change. Further, we would suggest that practitioners consider how activities in a broad community of organizations can set the stage for entrepreneurship and have a high impact on its ultimate success or failure. Thus, we would suggest that practitioners who seek to innovate should search broadly for opportunities and understand the importance of relations with businesses elsewhere in the community. The success of their entrepreneurial efforts may depend on the occurrence of supportive entrepreneurial changes in those businesses as well. Their ability to do this will be enhanced by a broad understanding of entrepreneurial behaviors and sensitivity to the opportunities that their entrepreneurial behaviors may create for others.     

Digital entrepreneurship ecosystem as a new form of organizing: the case of Zhongguancun

Digital innovation is becoming increasingly important in today’s economy. Many digital innovations are developed not within organizations, but in innovation-driven entrepreneurial ecosystems, where various entrepreneurship related stakeholders collaborate and cooperate. Despite its significance, studies on digital entrepreneurship ecosystems (DEEs) are limited and the concept is largely undertheorized. This study intends to fill that gap by studying how a DEE organizes. This organizing issue is challenging, because stakeholders of a DEE are self-organizing and are not governed by any formal authority. To answer that question, we adopt forms of organizing as a theoretical lens, which provides structure to examine organizing issues. Through an in-depth case study of Zhongguancun, the Silicon Valley of China, we unveil eight processes around the themes of division of labor and integration of efforts. We further show that the forms of organizing feature a balance of centralized design and de-centralized emergence. This balanced view extends the forms of organizing literature, which takes an either/or perspective. Ecosystem architects and policy makers who intend to build entrepreneurship ecosystems to promote local economies can derive practical implications from our findings.