David S. Lucas , Caleb S. Fuller , Mark D. Packard
{"title":"Made to be broken? A theory of regulatory governance and rule-breaking entrepreneurial action","authors":"David S. Lucas , Caleb S. Fuller , Mark D. Packard","doi":"10.1016/j.jbusvent.2022.106250","DOIUrl":null,"url":null,"abstract":"<div><p>Although regulatory institutions are said to enable and constrain entrepreneurial action, ventures frequently emerge with products, processes, and business models that skirt or defy these rules. We provide a theory of rule-breaking entrepreneurial action, focusing on why entrepreneurs are only sometimes constrained by law, regulation, and other formal constraints. In this, we attend to the dual roles of social context and subjective interpretation. Drawing on the sociology of law, we position regulatory rules within a system of governance, where public actors and legal intermediaries collectively construct the meaning of rule compliance and enact sanctions to enforce this interpretation. We leverage this to describe how enforcement imperfections and heterogeneous rule interpretations give rise to the possibility of ‘black market’ and ‘gray market’ entrepreneurial actions. In turn, we theorize how actors' knowledge and motivations can lead them to identify and exploit breakable rule conditions via the creation of new ventures. We illustrate our framework with examples from startups Zenefits, Square, and Aereo. Our framework changes the way we think about regulatory institutions and entrepreneurial action by presenting governance as a multilevel, social, and subjective process—such that some actors conform their entrepreneurial activities to established rules while others recognize and exploit breakable rule conditions.</p></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":null,"pages":null},"PeriodicalIF":7.7000,"publicationDate":"2022-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"5","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Business Venturing","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0883902622000623","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 5
Abstract
Although regulatory institutions are said to enable and constrain entrepreneurial action, ventures frequently emerge with products, processes, and business models that skirt or defy these rules. We provide a theory of rule-breaking entrepreneurial action, focusing on why entrepreneurs are only sometimes constrained by law, regulation, and other formal constraints. In this, we attend to the dual roles of social context and subjective interpretation. Drawing on the sociology of law, we position regulatory rules within a system of governance, where public actors and legal intermediaries collectively construct the meaning of rule compliance and enact sanctions to enforce this interpretation. We leverage this to describe how enforcement imperfections and heterogeneous rule interpretations give rise to the possibility of ‘black market’ and ‘gray market’ entrepreneurial actions. In turn, we theorize how actors' knowledge and motivations can lead them to identify and exploit breakable rule conditions via the creation of new ventures. We illustrate our framework with examples from startups Zenefits, Square, and Aereo. Our framework changes the way we think about regulatory institutions and entrepreneurial action by presenting governance as a multilevel, social, and subjective process—such that some actors conform their entrepreneurial activities to established rules while others recognize and exploit breakable rule conditions.
期刊介绍:
The Journal of Business Venturing: Entrepreneurship, Entrepreneurial Finance, Innovation and Regional Development serves as a scholarly platform for the exchange of valuable insights, theories, narratives, and interpretations related to entrepreneurship and its implications.
With a focus on enriching the understanding of entrepreneurship in its various manifestations, the journal seeks to publish papers that (1) draw from the experiences of entrepreneurs, innovators, and their ecosystem; and (2) tackle issues relevant to scholars, educators, facilitators, and practitioners involved in entrepreneurship.
Embracing diversity in approach, methodology, and disciplinary perspective, the journal encourages contributions that contribute to the advancement of knowledge in entrepreneurship and its associated domains.