The term institutional entrepreneurship is usually used to describe organized actors who leverage support and acceptance for new institutional arrange- ments to serve an interest they value (Dorado, 2005 citing DiMaggio, 1988;
Rao, 1998; Beckert, 1999). The notion combines conceptual insights from entrepreneurship and institutional theory. From the entrepreneurship stand- point this conceptual interface is enabled because of the interest in how orga- nized actors leverage resources, identify opportunities and gain legitimacy or support for new activities, innovations, product and service transformations.
The interface with institutional theory occurs because, in the process of bringing about social, economic, cultural or political transformations, such actors and activities change or subvert institutional rules and referents, and therefore engender institutional change. As Dorado (2005) comments, although there is a long tradition of institutional research (citing Selznick, 1949, 1957; Stinchcombe, 1968), this theory has received fresh impetus with the interest in how actors gain support and acceptance for institutional change projects (Fligstein, 1996, 1997; Rao et al., 2000).
Ideas from entrepreneurship and institutional theory have been applied in a variety of contexts. These range from industry creation (Aldrich and Fiol, 1994), family business groups in the Association of Southeast Asian Nations (ASEAN) (Carney and Gedajlovic, 2002), cultural entrepreneur- ship in nineteenth-century Boston (DiMaggio, 1982), micro finance organi- zations in Bolivia (Dorado, 2001), development of common technological standards (Garud et. al., 2002) and transformation processes in Norwegian fisheries (Holm, 1995). Also studies directly addressing institutional entre- preneurship include institutional management and organizational change in
a transition context (de Holan and Phillips, 2002), the whaling industry on Canada’s west coast (Lawrence and Phillips, 2004), Chinese entrepre- neurship (Yang, 2004), adoption of new technologies such as the ‘Kodak moment’ (Munir and Phillips, 2005), the legitimation of American sover- eignty (Steinman, 2005) and Association to Advance Collegiate Schools of Business (AACSB) agencies (Durand and McGuire, 2005). Importantly, Dorado (2005) isolates institutional entrepreneurship as a particular profile of institutional change.
The study of institutional entrepreneurship and regional emergence is still quite rare (Hoskisson et al., 2000), and for this reason this chapter con- siders the enactment and patterning of inter-organizational relations that are stimulated by entrepreneurial discourses, and which contribute to the becomingness of a social and economic (regional) reality. This theoretical stance is important for two reasons.
First, it builds upon the analytical tradition put forward by Berger and Luckmann (1966) and built upon by Giddens (1984, 1994) and Sztompka (1993) in his sociology of social change in which inquirers are encouraged to consider linkages between organizations, agencies, institutions and the various actors that constitute (and contribute) to the patterning or shaping of these relations. Also, in relating to this analytical tradition, we can work towards an integration or fusion of structure and agency, operation and action (Sztompka, 1993) – an undertaking which is important for bridging the various levels of analysis that are often singularly privileged in entre- preneurship inquiry and which, it is argued, lead to the fragmentation or reduction of entrepreneurial activity into separate categories or units of analysis (Busenitz et al., 2003).
Second, drawing attention to the linkages between organizations, agen- cies and institutions within a regional organizational field as they attempt to develop an infrastructure of entrepreneurship (Van de Ven, 1993) is important because it is unusual to see empirical studies of this kind. Most regional studies addressing entrepreneurship focus on either policy driven (‘top down’) or ‘grass roots entrepreneurship’ (‘bottom up) strategies for stimulating a cultural and attitudinal environment or infrastructure that is receptive to entrepreneurship. Very few focus on the inter-organizational relationality of such strategies. Also, given the situation in the Western Balkans and its emphasis on market neutral policies and exposure to global competition, it is important to take account of the extent to which local actors are brought into contact or association with ideas, practices, resources and institutional referents from other settings. This was discussed earlier in terms of ‘open’ and ‘closed’ organizational fields. It is also import- ant to note that organizational fields can be ‘too open’, resulting in a com- bination of resource exchange activity, environmental turbulence and lack
uncertainty and ambiguity (Duncan, 1972), which inhibits creativity. These two key challenges give rise to the first research question:
1. How do patterns of activity and relationship between industrial actors, regulatory agencies, consumers, small businesses, government bodies and other international or foreign agencies converge to bring about entrepreneurial activity?
Through institutional theory it is possible to draw attention to the ways in which local (entrepreneurial) action strategies help to diffuse new (and transform) old institutional arrangements. This is important for extending our entrepreneurship inquiry of opportunity ‘discovery’ beyond micro, personal, behavioural and situational understandings to theories that explain organizational, industry, regional and institutional transforma- tions. However, unlike Dorado (2005), we are less concerned with whether institutional entrepreneurship is more or less possible according to a par- ticular mix of agency, resources and opportunities in (opaque, transparent or hazy) organizational fields. Instead we follow Maguire et al.’s study (2004) in identifying those actors that are better able to engage in institu- tional entrepreneurship in an emerging context. We also draw attention to the processes through which institutional entrepreneurs promote the adop- tion of new institutional practices associated with entrepreneurship. In taking this emphasis, consideration can be given to the cultural discourses and emergent strategies that influence the creation of new institutions (Lawrence and Phillips, 2004). These interests are expressed in the second research question:
2. What are the processes through which resources are enacted and mobi- lized by a network of organizations and local actors as they strive to achieve regional economic interests?
In examining the transformative effects brought about by institutional entrepreneurs, we highlight how particular institutional practices are being transformed as a result of the activities of local actors and economic organizations. We draw attention to how entrepreneurs create connections between ‘sites’ kept separate by existing institutions (Yang, 2004). Also, taking note of Fligstein and McAdam’s (1995) views about the role that institutional entrepreneurs play in helping to create and maintain col- lective identities, we consider their contribution to the development of a sense of regional identity and becoming (and the role in legitimizing entre- preneurship). This takes account of what Beckert (1999) refers to as the
‘institutional disembedding’ that goes hand in hand with the emergence of new institutional structures (thus creating spaces of uncertainty that become filled by activities of entrepreneurs). These theoretical concerns give rise to the third research question:
3. In what ways do the local (entrepreneurial) action strategies converge and help to diffuse new (and transform old) institutional arrangements?