Editorial: Venta de Libros

According to Scott (1987, p. 507), until the introduction of institutional conceptions, organisations were viewed primarily as exchange and (or) production systems, and their structures were viewed as being shaped largely by their transactions, their technologies, or the power-dependency relations growing out of such interdependencies. Environments were conceived of as task environments: as sources of information, loci of competitors and exchange partners or stocks of resources. While such views are not wrong, they are clearly incomplete. Institutional theorists have directed attention to the importance of symbolic aspects of organisations and their environments. They reflect and advance a growing awareness that no entrepreneurial firm is just a technical system and that many firms are not primarily technical systems. All social systems, hence all organisations exist in an institutional environment that defines and delimits social reality. Further, just as with technical environments, institutional environments are multiple, enormously diverse, and variable over time. To neglect their presence and power is to ignore significant causal factors shaping firm structures and practices: to overlook these variables is to misspecify the causal models (Scott, 1987, p. 507-508).

Consequently, DiMaggio (1988, p. 4-5) argues that institutional theory tends to "defocalize" interests in the explanation of human behavior. Rather than assuming the common utilitarian position that actors attempt to pursue their interests, he suggests,

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institutional arguments emphasise (1) factors such as norms or taken-for-granted assumptions "that make actors (entrepreneurs) unlikely to recognise or to act upon their interests" and (2) circumstances such as behavioural constraints or cognitive limitations "that cause actors who do recognise and try to act upon their interests to be unable to do so effectively." Hence, Oliver (1991) believes that institutional theory is capable of explaining non-choice behaviour in the context of taken-for-granted norms and beliefs (p. 148).

For instance, an argument can be raised that institutional factors in a particular setting could affect entrepreneurs’ strategic choice motives, which may be defined in terms of desire for autonomy, nature of work, self-actualisation, power and affiliation (Arguelles, 2004) as well as entrepreneurs’ strategic actions that include organising or reorganising of social economic mechanisms to turn resources and situations to practical account, initiative taking, and the acceptance of risk of failure (Shapero, 1975). Further, entrepreneurs’ strategic activities, comprising of entrepreneurial culture and leadership (where innovation and creativity are expected), entrepreneurial mindset (defined in terms of insight, alertness and flexibility to use appropriate resources), strategic management of resources (including financial, human and social capital), and applying creativity to develop innovations (radical and incremental) (Ireland et al., 2003) could perhaps be shaped by institutions. Furthermore, institutions might affect entrepreneurs strategic actions, which embodies resources, entrepreneur’s external networks and alliances, and organisational learning, innovation and internationalisation (Hit et al., 2001), and entrepreneurs’ vital strategic activity that includes product and process innovations (Davidsson, 2006; Schumpeter, 1934). This study intends to investigate institutional roles in entrepreneurs' actions, choice or activities and entrepreneurial resilience development to counter institutional constraints.

Nevertheless, institutional rules have been criticised as being incoherent, often in conflict with each other and are even contradictory (Beckert, 1999). He therefore concludes that institutional rules do not provide unanimous answers to how agents (entrepreneurs) should act. Accordingly, Scott (1994, p. 76) posits that the recognition of multiple, in some instances competing institutional frameworks curbs the tendency of analysts to embrace deterministic explanations and opens up the opportunity for a

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development of a more voluntaristic perspective7 of social action and structure. However, this conclusion has been challenged on the assumption of a relative autonomy of institutional rules at different levels (DiMaggio, 1991) in that there is a process of evolutionary adaptation, without actor reference, in which the uncertainty created by institutional contradiction is eliminated overtime (Hannan et al., 1993). That change is caused by exogenous shocks to which organisations adapt (Fligstein, 1991), and hence change is primarily a process of erosion stemming from pressures from the organisation’s environment (Oliver, 1992; Beckert, 1999). Hence, this study investigates how entrepreneurs adapt to their ever-changing environment.

Moreover, from institutional theory perspective, organisational choice is limited by a variety of external pressures (Friendland & Alford, 1991; Meyer et al., 1983; Pfeffer & Salancik, 1978) and organisations must be responsive to external demands and expectations in order to survive (Meyer & Rowan, 1977; Pfeffer & Salancik, 1978). In describing the exogenous factors that exert pressures on organisation's (entrepreneurial) choice, Scott (1987, p. 498) suggests that the institutional pressures that exert pressures and expectations includes not only the state (government agencies, laws, regulatory structures, and courts) and professions, as institutions but also interest groups and public opinion (Scott, 1987, p. 114). Organisations are predicted to conform to institutionalised beliefs or practices when these beliefs and practices are externally validated and accepted by organisations as to be invisible to the actors they influence (DiMaggio, 1988; Oliver, 1991) or when their social fact quality renders them the only conceivable, “obvious” or “natural” way to conduct organisational activity (Berger & Luckmann, 2007; Zucker, 1987).

For example, business organisations may define and structure their activities around particular functions – sales, finance and production – that reflect institutionalised and prefabricated classifications of appropriate structure (Meyer & Rowan, 1977). Moreover, Oliver (1991, p. 148) argues that when external norms and practices obtain the status of a social fact, organisations may engage in activities that are not so much calculative and self-interested as obvious or proper. He further gives examples that

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Voluntaristic theories assume that managerial decisions and actions are a substantial cause of the outcomes of firms’ activities and not at the mercy of forces beyond their control (Philips, 2011) i.e. it talks of the degree of strategic freedom within constraining environments (Bourgeois, 1984).

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corporate social responsibility and the maintenance of sound organisational ethics may not be reducible to strategic behaviours induced by the anticipation of organisational gain. Thus, organisations may act ethically or responsibly not because of any direct link to organisational outcome but merely because it will be unthinkable to do otherwise. In this way, organisational behaviour may not be driven by processes of interest mobilisation (DiMaggio, 1988), but by preconscious acceptance of institutionalised values or practices. Hence, it may be assumed that entrepreneurial choice is possible within the context of institutional constraints, hence this study. Institutional theory draws attention to the causal impact of state, societal and cultural pressures, as opposed to market forces and resource scarcity on organisational (entrepreneurial) behaviour, and to the effects of history, rules and consensual understanding of organisational conformity to environmental constraints (Oliver, 1991). This could explain how myths, meanings and values, rather than efficiency, autonomy and exchange, may drive and determine organisational behaviour, in the context of external pressures (Oliver, 1991, p. 151). Myths, meanings and values are subjective, and can mostly be understood through the lived experiences of individuals, hence the use of the phenomenological approach to understand the subjective experiences of entrepreneurs within a specific context. Furthermore, from the institutional theory perspective, the imitation or reproduction of organisational structures, activities and routines are in response to state pressures, the expectation of professions, or collective norms of the institutional environment (DiMaggio & Powell, 1983; Zucker, 1977). Several studies, for example, have demonstrated how institutional features become transmitted, sustained and resistant to change overtime as a result of conformity to institutional rules or expectations (Tolbert, 1985; Tolbert & Zucker, 1983). Thus, the institutional explanation of reproduction and isomorphism emphasise the role of conformity, habit and convention, rather than organisational power and control in contributing to stability, and power tends to be attributed to institutional environment instead of the organisation (DiMaggio & Powell, 1983). Therefore, it could be that the motives and activities of entrepreneurs may be shaped by the institutional environment.

However, entrepreneurial firms could avoid institutional rules and requirements by reducing the degree to which they are scrutinised by regulatory agencies (i.e.

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buffering) or by establishing ritualistic procedures to promote the appearance of compliance to specified rules and requirements (i.e. concealment). It has also been argued that active defiance and manipulation are likely to occur when the degree of legal coercion is low; when sanctions for non-compliance with laws and regulations are minimal; and when mechanisms for enforcing compliance are weak or infrequently applied, the anticipated consequence of non-conforming behaviour may not constitute a sufficient deterrent to organisational resistance. The implication may be that entrepreneurial firms do not invariably conform to the myth, rules, or expectations of their institutional environment (Oliver, 1991, p. 168).

This study is interested in understanding (i) how institutions guide the choice set, motives and activities of entrepreneurs in Ghana and (ii) the resilience strategies entrepreneurs adopted to operate in a developing country such as Ghana. This can mostly be captured through the use of the phenomenological inquiry, as adopted in this study. Moreover, juxtaposing the arguments made by Oliver (1991, p. 168) to those made by, for example, DiMaggio & Powell (1983), it is evident how entrepreneurial firms strive to establish congruence between their activities and the expectations of the institutional environment. The question however remains as to why entrepreneurial firms allow their activities, choice set and motives to be influenced by the institutional framework. Thus, discussions in section 4.2.5 will examine why entrepreneurial firms strive to establish congruence between institutional arrangements and their activities.