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

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.

How human capital interacts with the early development of academic spin-offs

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Riding the Practice Waves: Social Resourcing Practices during New Venture Development

“…Other potential objectives are to overcome the liability of newness (Stinchcombe, 1965) and uncertainty surrounding the venture's markets, products, or organizational processes (Aldrich & Fiol, 1994) and to gain legitimacy in the eyes of specific resource providers (Suchman, 1995;Zimmerman & Zeitz, 2002). The types of activities required for legitimation will depend on the stages of development of a new venture (Vohora, Wright, & Lockett, 2004;Drori, Honig, & Sheaffer, 2009) and include such practices as the legal incorporation of a firm (Delmar & Shane, 2004), inter-organizational endorsement (Stuart, Hoang, & Hybels, 1999), and enrolling the symbolic capital and prior experience of specific individuals in the new venture (Shane & Cable, 2002;Higgins & Gulati, 2003). From a practice perspective, one should note the socially constructed and shared nature of such concepts as prestige, trust, legitimacy, and status, but also remember that such socialized concepts often become inscribed, mobilized and leveraged through material devices such as business plans or models (Doganova & Eyquem-Renault, 2009;Mason & Spring, 2011).…”

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