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The Life Cycle of an Internet Firm: Scripts, Legitimacy, and Identity

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  • Israel Drori
  • Benson Honig
  • Zachary Sheaffer

Abstract

We study, longitudinally and ethnographically, the construction of legitimacy and identity during the life cycle of an entrepreneurial Internet firm, from inception to death. We utilize organizational scripts to examine how social actors enact identity and legitimacy, maintaining that different scripts, both contested and consent–oriented, become the source of action for acquiring legitimacy and creating organizational identity. We show that scripts enable entrepreneurs and other social actors to invoke a set of interactions within and outside the organization. Scripts construct values and interests, form social bonding and consented actions, and eventually shape and reshape the individual and institutional contexts of identity and legitimacy. We found that the strategic action of organizational members in pursuing and enacting their preferred scripts depends on their position and role in the organization. We observed that the institutionalization of simultaneously competing scripts created a path–dependent process leading to organizational conflict and eventual failure.

Suggested Citation

  • Israel Drori & Benson Honig & Zachary Sheaffer, 2009. "The Life Cycle of an Internet Firm: Scripts, Legitimacy, and Identity," Entrepreneurship Theory and Practice, , vol. 33(3), pages 715-738, May.
  • Handle: RePEc:sae:entthe:v:33:y:2009:i:3:p:715-738
    DOI: 10.1111/j.1540-6520.2009.00323.x
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    References listed on IDEAS

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    Cited by:

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    3. Romeo V. Turcan, 2013. "International New Venture Legitimation: An Exploratory Study," Administrative Sciences, MDPI, vol. 3(4), pages 1-29, November.
    4. Joep P. Cornelissen & Ona Akemu & Jeroen G. F. Jonkman & Mirjam D. Werner, 2021. "Building Character: The Formation of a Hybrid Organizational Identity in a Social Enterprise," Journal of Management Studies, Wiley Blackwell, vol. 58(5), pages 1294-1330, July.
    5. Lien De Cuyper & Bart Clarysse & Nelson Phillips, 2020. "Imprinting Beyond the Founding Phase: How Sedimented Imprints Develop over Time," Organization Science, INFORMS, vol. 31(6), pages 1579-1600, November.
    6. Kim Klyver & Benson Honig & Paul Steffens, 2018. "Social support timing and persistence in nascent entrepreneurship: exploring when instrumental and emotional support is most effective," Small Business Economics, Springer, vol. 51(3), pages 709-734, October.
    7. Jintong Tang & Zhi Tang & Jerome A. Katz, 2014. "Proactiveness, Stakeholder–Firm Power Difference, and Product Safety and Quality of Chinese SMEs," Entrepreneurship Theory and Practice, , vol. 38(5), pages 1-29, September.
    8. Zaheer, Hasnain & Breyer, Yvonne & Dumay, John, 2019. "Digital entrepreneurship: An interdisciplinary structured literature review and research agenda," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    9. James M. Bloodgood & Jeffrey S. Hornsby & Matthew Rutherford & Richard G. McFarland, 0. "The role of network density and betweenness centrality in diffusing new venture legitimacy: an epidemiological approach," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-28.
    10. James M. Bloodgood & Jeffrey S. Hornsby & Matthew Rutherford & Richard G. McFarland, 2017. "The role of network density and betweenness centrality in diffusing new venture legitimacy: an epidemiological approach," International Entrepreneurship and Management Journal, Springer, vol. 13(2), pages 525-552, June.
    11. König, Marc & Ungerer, Christina & Baltes, Guido & Terzidis, Orestis, 2019. "Different patterns in the evolution of digital and non-digital ventures' business models," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 844-852.
    12. Tomas Karlsson & Caroline Wigren, 2012. "Start-ups among university employees: the influence of legitimacy, human capital and social capital," The Journal of Technology Transfer, Springer, vol. 37(3), pages 297-312, June.
    13. Zaheer, Hasnain & Breyer, Yvonne & Dumay, John & Enjeti, Mahesh, 2022. "The entrepreneurial journeys of digital start-up founders," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    14. Fisher, Greg & Kuratko, Donald F. & Bloodgood, James M. & Hornsby, Jeffrey S., 2017. "Legitimate to whom? The challenge of audience diversity and new venture legitimacy," Journal of Business Venturing, Elsevier, vol. 32(1), pages 52-71.
    15. Domurath, Anne & Patzelt, Holger & Liebl, Andreas, 2020. "Does negative feedback impact new ventures' organizational identity? The role of founding teams' human capital and feedback source," Journal of Business Venturing, Elsevier, vol. 35(3).
    16. Romeo Turcan & Anita Juho, 2014. "What happens to international new ventures beyond start-up: An exploratory study," Journal of International Entrepreneurship, Springer, vol. 12(2), pages 129-145, June.
    17. Blake E. Ashforth & Kristie M. Rogers & Kevin G. Corley, 2011. "Identity in Organizations: Exploring Cross-Level Dynamics," Organization Science, INFORMS, vol. 22(5), pages 1144-1156, October.
    18. O'Neil, Isobel & Ucbasaran, Deniz, 2016. "Balancing “what matters to me” with “what matters to them”: Exploring the legitimation process of environmental entrepreneurs," Journal of Business Venturing, Elsevier, vol. 31(2), pages 133-152.

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