The Emergence of Proto‐Institutions in the New Normal Business Landscape: Dialectic Institutional Work and the Dutch Drone Industry

Abstract

In the current business landscape, in which technology‐enabled entrepreneurship is part of the New Normal, regulatory institutional structures are in constant flux. Previous studies have framed the challenges facing entrepreneurs in mature organizational fields as avoiding the power of overbearing regulators long enough to establish the legitimacy of their ventures. In fields typified by New Normal conditions, however, regulatory frameworks for evaluating new technology‐enabled ventures are often still lacking. Regulators may choose to actively reach out to entrepreneurs to arrive at a better understanding of the radical technological changes and high‐frequency entrepreneurial behavioural adaptations that occur in these settings. To grasp how novel regulatory institutional structures come about in the New Normal business landscape, we conducted a processual study of the emergence of a new technology that is the Dutch remotely piloted aircraft systems (drone) industry between 2000 and 2018. Our findings show that regulatory proto‐institutions result from dialectic institutional work in the form of structured interactions between entrepreneurs and regulators. Specifically, we present a process model that reveals how new regulatory structures evolve in contexts where high levels of technological and behavioural change induce systemic uncertainty, and enlarge the interdependence between entrepreneurs and regulators. We suggest that our process theory of proto‐institutional emergence generalizes towards other organizational fields in which technology‐enabled entrepreneurship has become the main driver of growth. Theoretically, our findings speak to the literatures on institutional work, proto‐institutional emergence, and the New Normal business landscape.

Institutional Work: A Review and Framework based on Semantic and Thematic Analysis

“…Most IW research has been conducted in strong institutions, such as state bureaucracies (Goodstein & Velamuri, 2009;Xiao & Klarin, 2019). Weak institutions are less developed, such as proto-institutions and institutional voids (Gong & Hassink, 2019;Smolka & Heugens, 2019). Our findings suggest differences in IW between the two.…”

“…Several issues and questions were raised by our findings and framework: (1) Knowledge of IW in proto-institutions and institutional voids remains underexplored (see Gong & Hassink, 2019;Smolka & Heugens, 2019). The same goes for industries not commonly studied with IW theory, such as the creative industries (see Blanc & Huault, 2014).…”

Exploring the institutional pressures that affect international new ventures

“…In addition, as suggested by research in the entrepreneurship domain by Cao and Shi (2020), we included peer-reviewed articles and sources from Google Scholar. This allowed us to avoid academic bias (Briner & Denyer, 2012) and was reasoned by the novelty of the bi-directional relationship of INV and home country institutions, which requires further contextualization to reveal their distinctive features and suggest ideas for future empirical research (Greenwood et al, 2017;Smolka et al, 2020). In addition, we found that the responses of INVs to institutional pressures mainly consist of case-base analysis useful for practitioners and government; therefore, such reports were included to fulfil the intention to heed all valuable contributions.…”

“…In an uncertain landscape with rapid technological development and government capacity constraints (Smolka & Heu-| 99 gens, 2020), policymakers and regulators demand input from INVs in the process of developing sustainable and favourable legal and normative frames. Therefore, the changing business landscape and shifting institutional arrangements create the need to understand how INVs and policymakers can jointly co-create new regulatory, normative, or cognitive frameworks (Ozcan & Gurses, 2018;Smolka et al, 2020). Thus, to fill this gap, we foreground the following research questions:…”

Managing Technological, Sociopolitical, and Institutional Change in the New Normal

“…The seventh paper is a qualitative paper by Smolka and Heugens (2020). With the lack of a regulatory framework for evaluating new technology‐enabled ventures, they present a process model that reveals how new regulatory structures evolve in the context where high levels of technological and behavioural changes induce systematic uncertainty, and enlarge the interdependence between entrepreneurs and regulators.…”