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2013
32710.1177/0266242613480376International Small Business JournalSpedale and Watson

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International Small Business Journal
2014, Vol. 32(7) 759­–776
The emergence of entrepreneurial © The Author(s) 2013
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DOI: 10.1177/0266242613480376
institutional logics and individual isb.sagepub.com

life-orientation

Simona Spedale and Tony J. Watson

Nottingham University Business School, UK

Abstract
This article builds upon a growing body of research calling for a more contextual approach
to entrepreneurship studies. It combines theoretical resources from Joas’s theory of creative
action with institutional logics thinking. A model of the emergence of entrepreneurial action
is developed as an outcome of a continuous dialogue between theoretical and empirical work.
Entrepreneurial action is shown as emerging at the crossroads between tensions at the general
level of institutional logics and tensions at the level of an individual’s life-orientation. Two main
insights are offered for future theoretical and empirical developments. First, that it is possible
to move beyond the artificial separation of ‘context’ and ‘individual’ in entrepreneurship studies
to investigate the complex interweaving of individual, organisational and societal levels that
comprises entrepreneurial activity. Second, the concept of entrepreneurial action has a relevance
far beyond the creation of new business ventures and activities engaged in by owner-managers.

Keywords
entrepreneurial action, institutional logics, emergence, deal-making, entrepreneurship, creativity

Introduction
The investigation into an individual’s life-history presented in this article is offered to reinforce,
and indeed go beyond, the argument that studies of entrepreneurship should focus less on the indi-
vidual entrepreneur and instead should pay more attention to the context in which entrepreneurs
operate. In traditional terms, the character at the centre of the study could well be studied as an
entrepreneur: a person with particular personal characteristics or traits that led him to become dis-
satisfied with working as an employee in a standard organisation, so that he sought new business
opportunities and, having done this, established a new (even novel) business. Such an interpreta-
tion would not have been wrong in any simple sense. However, in its emphasis on the special type

Corresponding author:
Simona Spedale, Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham NG8 1BB, UK.
Email: simona.spedale@nottingham.ac.uk

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760 International Small Business Journal 32(7)

of individual and the search for business opportunities, it would not have done adequate justice to
several very important aspects of entrepreneurial action; especially to the subtleties and complexi-
ties of the research participant’s emergent life-orientation and the emergence of the NoPaper busi-
ness through his engaging not only in entrepreneurship, but also in a combination of entrepreneurial
action and managerial action.
In order to understand these matters it is important to appreciate that these two types of social
action – the entrepreneurial and managerial – are at the centre of the way that organisations are
established and run in contemporary societies. The at-first sight individualistic investigation car-
ried out in this article lends support to the argument that in studying entrepreneurship, one must
recognise that both managerial and entrepreneurial actions are societal phenomena. This study
follows Mills’ (1970) notion of the sociological imagination (i.e. the social science imagination),
in which the social scientist sets out to ‘understand what is happening [in people’s lives] at minute
points of the intersection of biography and history within society’ (1970: 14). In this spirit, this
article focuses on one individual and how his life-orientations have emerged in the light of the
institutional setting of his time and society, and have been implicated in the emergence of a new
and distinctive organisation.
The issues about entrepreneurship and context are addressed now, and the suggestion put forward
that, important as the argument for more context is, it may not go far enough in giving recognition
to the role of entrepreneurial action in the modern world. Following this, the scheme which sum-
marises the theorising efforts involved in the study is set out. The empirical material is then analysed
in terms of this theoretical scheme and, finally, the investigation’s contribution to the development
of a more sociologically sensitive study of entrepreneurship is summarised and discussed. However,
for the moment it is important to stress that there is no intention here to add a new sociological
approach to the variety of approaches or perspectives (Mole and Ram, 2011) already existing in
entrepreneurship studies. Sociology, it is suggested, can provide valuable analytical resources which
can be used by any or all entrepreneurship researchers. The study of entrepreneurial activities gener-
ally can benefit from consideration of key sociological factors which are part of the reality of the
social world. Sociology, then, is a means rather than an end in itself, and the deployment of socio-
logical resources takes us well beyond substantiating the claim that entrepreneurs are social actors
and that they operate in context. Much has been achieved already in this respect.

Entrepreneurship in context and beyond

Although Aldrich and Zimmer argued over 25 years ago that ‘entrepreneurship is embedded in its
social context’ (1986: 3), research has been slow in advancing this line of enquiry. Notable excep-
tions can be found in the study of networks and social capital in entrepreneurship (Anderson et al.,
2007, 2010; Bowey and Easton, 2007; Cope et al., 2007; Drakopoulou-Dodd et al., 2006; Jack et
al., 2008; Minitti, 2005); in research on team-based venture creation (see the special issue of the
International Small Business Journal, 23(3), 2005); in investigations of entrepreneurship as dis-
course (Anderson and Warren, 2011; Nicholson and Anderson, 2005; Radu and Redien-Collot,
2008); and in recent research on the role of entrepreneurial activity in the venture creation and
development process (Wright and Marlow, 2012). Despite these efforts and renewed calls for treat-
ing entrepreneurship as a societal phenomenon (Davidsson, 2008), attention to context in main-
stream entrepreneurial studies remains inadequate, as stated in Shane’s (2008) critique of various
‘busted myths and key realities’ of entrepreneurship. This critique echoed Zahra’s earlier complaint
that ‘few entrepreneurship papers give us enough clues about the nature of their research settings’
(2007: 445). More recently, Welter has argued in a similar vein that ‘although entrepreneurship

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Spedale and Watson 761

research has made progress in acknowledging context, this specifically applies to contextualising
theory, less to theorising context’ (2011: 175). Welcome as this argument is, Welter rather compli-
cates matters by writing of a diversity of contexts, including the societal, social, historical, house-
hold and family and institutional. The notion of a multiplicity of contexts which involves somehow
separating family phenomena from institutional ones is rather unwieldy analytically. Moreover,
often the development of taxonomies of context is based on the misguided conflation of the notion
of context (namely, the circumstances or events that are relevant to an event) with the notion of
level of analysis – something that does not promote conceptual clarity.
A valuable case for context in entrepreneurship studies has been made by Hjorth et al. (2008),
with their critique of mainstream US-dominated research and call for a European alternative which
would be distinctive in its contextualising of entrepreneurial activities. This alternative, which is
now buoyant and rich (see Hjorth, 2012 for an example of the variety and depth of recent contribu-
tions), is embodied in the ‘so-called creative process view’ (Steyaert, 2007: 454) of entrepreneur-
ship. Such a view emphasises processes of enactment, interpretation and creativity (Gartner, 2007;
Gartner et al., 2003) in conceptualising entrepreneurship as a part of society rather than simply an
economic phenomenon. By defining entrepreneurship as movement and becoming (Hjorth and
Steyaert, 2009; Hjorth and Gartner, 2012) or, as expressed by Gartner (2012), as ‘organisation-
creation’, the creative process view departs from the more essentialist, equilibrium-based notions
of the entrepreneurial process underpinning both the opportunity discovery perspective (Shane and
Venkataraman, 2000; Venkataraman et al., 2012) and the evolutionary perspective (Aldrich, 1999).
Supporters of the creative process view reject the methodological individualism dominating main-
stream approaches to the study of entrepreneurship, in favour of an ontology of relatedness
(Steyaert, 2007). Moreover, they recognise the limitations of reactive rationality and linear calcula-
tive logic in enacting new orders. A different type of rationality is required in order to move people
to creative action and potentialise creative forces: one that is able to harness the actualising power
of narrative and storytelling (Hjorth, 2012). According to this interpretive line, opportunities do not
exist as independent realities and cannot be anticipated in advance, but are created and actualised
in complex networks of interpersonal relations through the medium of language (Downing, 2005;
Fletcher, 2006; Hjorth and Steyaert, 2004; Rae, 2004).
The need to move away from notions of rationality that emphasise linearity and calculative logic
in the study of entrepreneurship has been advocated by the proponents of effectuation theory
(Sarasvathy, 2001; Sarasvathy et al., 2003). In effectual processes, ends are not predetermined but
continually redefined, depending on the available resources and strategic partnerships. Drawing
upon American pragmatism, Sarasvathy conceptualises entrepreneurship as a non-teleological,
open-ended process that creates unanticipated and often multiple ends (Dew and Sarasvathy, 2002),
where human interaction strives ‘to imagine and create a better world’ (Sarasvathy et al., 2003: 155).
Entrepreneurs face true uncertainty (Knight, 1921) and cannot rely on predictions about an unknow-
able future. Accordingly, they do not evaluate or assess existing opportunities, but actively generate
‘the alternative themselves’ (Sarasvathy, 2003: 207). Opportunities are ‘artifacts’ that ‘have to be
made through the actions and interactions of stakeholders in the enterprise, using materials and
concepts found in the world’ (Venkataraman et al., 2012: 26, emphasis in original). In recent work,
Sarasvathy (2008, 2012) has developed a series of principles or cognitive elements which, in her
view, ‘constitute the micro-foundations for theories of the entrepreneurial firm’ (2012: 194). In
privileging cognition as a basis for understanding entrepreneurial action, this line of enquiry ends up
shifting focus away from context, despite acknowledging its importance in principle.
What about the sociologists, as opposed to entrepreneurship specialists, who have studied entre-
preneurship? It is here that we might expect to see full weight being given to context. In 1999,

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762 International Small Business Journal 32(7)

Thornton wrote of sociology helping to take entrepreneurship studies beyond the situation in which a
focus on ‘the individual traits of entrepreneurs’ had been ‘the dominant school of research’ on entre-
preneurship ‘until recently’ (1999: 19; emphasis added). In a subsequent review of the sociological
studies of entrepreneurship, Ruef and Lounsbury welcomed the fact that sociologists had been exam-
ining ‘levels of analysis above the individual entrepreneur’, and had ‘gone beyond the concerns of the
psychologists and economists’ (2007: 2) who previously had dominated the field. Nevertheless, these
commentators criticised the sociologists’ contribution for having little intellectual cohesion, and for
keeping its focus narrow as a result of its interest in the creation of new organisations.
The conceptual scheme introduced shortly is designed both as an original contribution to wider
ongoing debates on contextualising entrepreneurship, and as a cohesive frame incorporating valu-
able sociological notions and resources. It shares many similarities with current entrepreneurship
scholarship and, more specifically, with the creative process view. For example, it adopts a proces-
sual approach that privileges creativity as a constitutive feature of entrepreneurial activities
(although, as will be detailed below, its understanding of creativity is somewhat different): it puts
entrepreneurial action rather than individuals at the core of analytical efforts; it rejects essentialist
arguments and instead embraces an ontology of becoming (Chia, 2002). Despite these significant
similarities, the theoretical scheme of the emergence of entrepreneurial action presented below is
distinctive in two ways. The first is the type of rationality that it emphasises. Mainstream entrepre-
neurship relies on linear calculative logic, while the creative process view privileges the relational
power of narratives and storytelling. The conceptual scheme in this article instead relies on the
non-teleological, Weberian type of rationality that characterises effectuation theory (Sarasvathy,
2001) but, driven by sociological considerations, directs attention to the notion of institutional log-
ics (Thornton et al., 2012) rather than focusing on the exploration of cognitive elements.
The second is that it encourages us to embrace contextuality to the full by (somewhat provoca-
tively) moving away from a notion of context as distinct from the individual. Thinking in terms of
the entrepreneur (individual as well as collective) and their context, or the entrepreneur in their
context, risks implying that entrepreneurs are somehow more important than the world of which
they are a part. Context too easily comes to mean merely background: something that any entrepre-
neurship researcher with a degree of sociological imagination would recognise as problematic.
Society and its institutions are within entrepreneurs and their activities, as well as around them. The
people who do entrepreneurial things are also members of societies, cultures, families and organisa-
tions. People who become entrepreneurial actors some of their time, and at different points of their
lives, are also social actors with lives beyond their work activities. This view has shaped the model
of the emergence of entrepreneurial action presented below. With its focus on action, the model
moves beyond the false dualism of individual and context, while at the same time maintaining a
useful analytical distinction between different levels of analysis (society, the organisation and the
individual) to investigate how emergence occurs. It is important that these levels are analytical
devices rather than empirical realities: they are means of getting to detailed matters of process in
what is, in effect, just one big system; not a system in the systems theory tradition, but in the sense
suggested by Glucksmann (2005), in her invaluable concept of the total social organisation of labour.

The emergence of entrepreneurial action: a theoretical scheme

Putting the notion of entrepreneurial action at the centre of theoretical and empirical efforts is a
valuable way of moving beyond a notion of context as distinct from the individual entrepreneur.
For the purposes of the present study, entrepreneurial action is defined as the making of adventur-
ous, creative or innovative exchanges (or deals) between the entrepreneurial actor’s

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Spedale and Watson 763

home enterprise, and other parties with which that enterprise trades. This concept is explained and
justified fully elsewhere (Watson, 2013a), and at its heart is locating entrepreneurial activities
within the basic human processes of exchanging and trading which have occurred throughout the
history of the human species. In modern industrial times, such activities tend to occur within for-
mal organisations, these being understood most usefully as undertakings whose controlling mem-
bers follow a logic of managing exchanges between the enterprise and a whole range of
resource-dependent constituencies (stakeholders) to achieve the undertaking’s long-term survival.
The people running organisations continually exchange with parties ranging from investors and
customers to employees and suppliers. Sometimes these exchanges are relatively routine, and at
other times they are relatively imaginative, innovative or creative.
Entrepreneurial action (or ‘entrepreneuring’ or ‘venturing’), emerges at the intersection between
society and the individual, as illustrated in Figure 1. How this emerging at the intersection is concep-
tualised distinguishes the theorising efforts in this article from other contextual analyses of entrepre-
neurial activity, which continue to reproduce an untenable dualism between society and individuals.The
emphasis on emergence fits closely with the theory of creative action implicit in American pragma-
tist sociology and formalised in recent years by Joas (1996). The pragmatist concept of action rejects
the Cartesian distinction between thought and action that lies at the core of the means–ends schema
still prevailing in mainstream entrepreneurship studies. Moreover, placing creativity centre-stage
means recognising that individuals – including those commonly called entrepreneurs – exist within a
history or stream of ongoing action that gives meaning to and orients their behaviour through habits
and pre-reflective routines. Habit and creativity are not two separate types of action, but essential
elements of all human activity. In Joas’ own words, ‘goal-setting does not take place by an act of the
intellect prior to the actual action, but is instead the result of a reflection on aspiration and tenden-
cies that are pre-reflective and have already always been operative’ (1996: 158; emphasis in

Tensions between Emergent practice

institutional logics
SOCIETY

Entrepreneurial Entrepreneurial actor’s

action home enterprise

Tensions in
individual life Emergent life-orientation
circumstances

Flow of ongoing action

Figure 1.  A theoretical scheme of the emergence of entrepreneurial action.

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764 International Small Business Journal 32(7)

original). In other words, individual action is always anchored in unreflected beliefs, routines and
successful habits. The notion of institutional logics (Thornton et al., 2012) is used in Figure 1 to
conceptualise these unreflected beliefs, routines and successful habits at the general level of an
organisational field, such as an industry or sector. Rooted in a Weberian understanding of rationality
as institutionally contingent, institutional logics are defined as:

[The] socially constructed, historical patterns of material practices, assumptions, values, beliefs, and rules
by which individuals produce and reproduce their material subsistence, organise time and space, and
provide meaning to their social reality. (Thornton and Ocasio, 1999: 804)

At the broader level of society, these include the institutional logics of the nuclear family, of reli-
gion, of the bureaucratic state and the community, besides the two critical and fundamentally
contradictory logics of the competitive market and bureaucratic administration (Friedland and
Alford, 1991; Watson, 2011).
As embedded social actors, in the first instance, individuals facing concrete situations and action
problems will call on this general repertoire of habitual schemas and successful routines to orient
their behaviour. However, habit is not immutable. Its flexible nature is associated by institutional
logic theorists with the presence of multiple and often competing institutional logics within an organ-
isational field (Lounsbury, 2002; Thornton, 2004). Variety of, and tension between, different institu-
tional logics provide ‘institutional foundations for competing claims and diverse courses of action by
enabling actors to segregate and distinguish themselves from others’ (Lounsbury, 2008: 351). Tension
at the general level of institutional logics can manifest itself at the level of concrete situations as an
action problem: a challenge to established routines whose success is put into question and needs to be
pragmatically restored (Mohr, 1998). This reorientation of an interrupted and contested flow of ongo-
ing action is a ‘creative achievement on the part of the actor’ (Joas, 1996: 128). Therefore, creativity
and habit are not mutually exclusive, but coeval dimensions of human action.
Low effectiveness is not the only possible challenge to habits and routines in concrete situa-
tions. Other types of tensions are also at play (Dewey, 1934), including the exercise of power on
the part of situated actors, as well as individuals’ attempts to consciously improve and perfect
habitual action (Dalton, 2004). In the theoretical scheme in Figure 1, these tensions are introduced
through the notion of an individual’s emergent life-orientation, defined as ‘the meanings attached
by an individual at a particular stage of their life to their personal and social circumstances; mean-
ings which orient them to act in particular ways with regard to their future’ (Watson, 2013b). An
individual’s life-orientation comprises the biographical patterns which emerge within identity
work processes (Sveningsson and Alvesson, 2003; Watson, 2008) as they unfold over a person’s
lifetime. It is shaped by personal history, present circumstances and a host of very broad and spe-
cific cultural and discursive factors. These include the personas – for example, the celebrity entre-
preneurs – populating everyday news and media (Nicholson and Anderson, 2005; Watson, 2009).
In the history of ongoing action, each concrete situation ‘contains a horizon of possibilities’
(Joas, 1996: 133) for creativity to emerge alongside habit. More specifically, the interaction
between tensions at the general level of institutional logics, on the one hand, and tensions in cir-
cumstances (pragmatically motivated or otherwise) at the level of an individual’s life-orientation,
on the other, stimulates a process of restoring and reorienting the flow of ongoing action. In con-
necting micro- and macro-levels of practice variation, such reorientation introduces something
new in society and constitutes the engine of social change. The model of the emergence of entre-
preneurial action in Figure 1 follows this logic, and adapts insights from the pragmatist theory of
creative action and the institutional logics perspective in institutional theory to a distinctive field

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Spedale and Watson 765

of human activity: the making of resource-dependent exchanges (Pfeffer and Salancik, 2003).
When the flow of ongoing action involves making deals with suppliers, customers, employees,
state authorities and media organisations – a variety of parties often collectively referred to as
stakeholders (Jones et al., 2002) or, in our case, ‘constituencies’ (Watson, 2006) – the creative
achievement that emerges at the intersection between society and individuals, between history and
biography is entrepreneurial action. The subtleties and complexities of this process become appar-
ent in the analysis of the individual research participant’s emergent life-orientation, and its role in
the emergence of NoPaper, a new business venture in the UK legal services industry.

Where biography meets history: creative deal-making in Iain

Lennox’s life
In the commonplace use of the term, Iain Lennox is a successful entrepreneur. Starting from hum-
ble beginnings, he overcame significant challenges at work and in other spheres of life, and by the
time of writing had achieved considerable personal wealth and social status. This happy turn of
events could be easily linked to Iain’s indomitable entrepreneurial spirit, and more specifically to
his role in the creation of a high-performing new business venture, NoPaper – but how did this
apparently paradigmatic case of successful entrepreneurship actually come about? In presenting
these events reference will be made to the model of the emergence of entrepreneurial action in
Figure 1, constantly interweaving theory with the analysis of real-life occurrences. A visualisation
of the presented account can be found in Figure 2, where the conceptual scheme in Figure 1 is filled
in with details from Iain’s life as an entrepreneur and from the context of which he was a part.

Institutional shifts:
• meaning of litigation Emergent practice
• contractual arrangements in HM Customs &
Excise
• convergence litigation/insurance
• mass-communication technologies

Taylor, Wood & NoPaper

SOCIETY

Thomspon

Reorientation
Reorientation
litigation and
litigation area
insurance

Tensions in Iain’s life circumstances:

• practice failures (ex. backlog) Emergent life-orientation
• desire to perfect routines (new technology)
• dislike of hierarchical relations

Flow of ongoing action

Figure 2.  A visualisation of the emergence of entrepreneurial action in Iain Lennox’s life.

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766 International Small Business Journal 32(7)

The mode of enquiry guiding the present study did not follow a deductive form of reasoning,
with a phase of conceptualisation leading to the development of a theoretical frame and the formu-
lation of research questions to be empirically verified. Instead, the researchers followed a form of
reasoning very similar to what Peirce (1998) called abduction: a process of learning (Prawat, 1999)
through which imagination is used to develop a new way of seeing a surprising and problematic
matter, and to form the most believable explanation for it. Accordingly, the researchers entered the
field both conceptually and empirically with the intent to work out a ‘what is going on here’ ques-
tion concerning the emergence of entrepreneurial activity in a specific temporal and spatial setting
(Iain’s life and his role in the creation of NoPaper as a new business). This mode of enquiry
involved recursive investigative work, whereby rounds of conceptualisation alternated with rounds
of immersion in the field in what Wodak has defined as a necessary ‘constant movement back and
forth between theory and empirical data (2004: 200). The investigation relied on a variety of
sources of empirical material. Observations and interviews were the primary methods used. Non-
participant observations were conducted at NoPaper and at Iain’s own house, and they ranged from
informal visits to more formal attendance to a number of company meetings and events.
Observations by both researchers led to the generation of a combined set of independently drafted
field notes. The interviews were open-ended and mostly, if not always, tape-recorded and tran-
scribed verbatim. The interviews were primarily with the focal research participant and other rel-
evant informants (for example, with employees at NoPaper, ranging from the receptionist to the
person in charge of software and information technology development). The researchers also col-
lected and examined a variety of textual, documentary and visual sources (including NoPaper’s
website and other internal company documents but also, for example, Iain’s photographs from
earlier times).
This heterogeneous body of material (field notes, interview transcripts, textual and visual docu-
ments) is presented in the article as a temporally organised account in order to maintain coherence
with the processual nature of the phenomenon under investigation – the emergence of entrepre-
neurial action – and to give a sense of the development of Iain’s life-orientation and his engage-
ment in entrepreneurial activities. In order to preserve anonymity, all characters – Iain included – and
organisations presented in the article have been given pseudonyms. However, the focus on Iain and
his personal history does not equate with individualism intact at the conceptual level, as neither
individual nor context are privileged in the interpretation. The account allows for the quotes pre-
sented in this article to be situated and contextualised, while at the same time feeding the ongoing
movement between field and theory, as encapsulated in the model in Figure 1 and the visualisation
in Figure 2. Together, the chosen modes of enquiry and presentation allow to develop a more holis-
tic and pragmatic understanding of how Iain learned the ropes of entrepreneurial action, and of
how others might do the same.

Early days
Iain Lennox comes from a Presbyterian working-class family which emigrated from Scotland to
South Yorkshire in the late 1950s. Married at the age of 21, Iain graduated in law according to his
parents’ wishes, but started working for an accounting firm instead of becoming a solicitor.
Unsatisfied with his job, he joined the police force and, after several years on the ground, was
promoted to sergeant. He then moved to the Home Office, with responsibilities for redesigning the
training programme of new recruits. Despite a successful career and a comfortable home life with
his wife, the couple moved to Australia where Iain found employment with a law firm. Here he
became an expert in quality systems and accreditation processes in the legal services industry and,
as he explained, developed a keen personal interest in computerised procedures:

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Spedale and Watson 767

The actual system or process and the use of computers and telephone systems … Well, I didn’t really know
anything to start with, but I became very interested in the way that work is processed as opposed to the
substantive work itself. (Personal interview with Iain Lennox, 11 December 2007)

Having moved back to the UK, Iain worked at a bakery making doughnuts to provide for his grow-
ing family, while considering his options. He then qualified as a solicitor and joined a conventional
law firm, Taylor, Wood & Thompson.

Learning the ropes

Taylor, Wood & Thompson was a traditional, middle-sized law firm located in the high street of a
prosperous provincial British town. It was conventionally organised in the three departments of
conveyance and matrimonial, commercial law and litigation, each under the control of a partner.
When Iain joined the firm in the late 1980s, Taylor, Wood & Thompson was profitable but strug-
gling to remain so. One of its most urgent problems was the inefficient organisation of insolvency
work, a situation which had deteriorated progressively into a huge backlog in VAT arrears cases.
Iain’s description of Taylor, Wood & Thompson’s predicament at the time is summarised as ‘hav-
ing an embryonic computer system and 700 individual paper files falling out of a cabinet’. Finding
a solution to this action problem became his main responsibility.
Taylor, Wood & Thompson’s unwieldy backlog of insolvency cases could be simply explained away
as an isolated case of mismanagement, but the model in Figure 1 encourages us to look beyond the
individual organisation and consider whether institutional dynamics might play a role in making sense
of both its predicament, and of how Iain went about addressing it (see Figure 2). The late 1980s and
early 1990s saw significant changes in the UK legal services industry (Abel, 1988, 2004; Hanlon, 1999):
people’s attitudes towards litigation were changing quite dramatically, a wider societal trend that resulted
in a significant increase in the overall level of claims (Flood, 1999). At the same time, local VAT officers
lost control over their choice of law firms, and HM Customs & Excise business was moved to a national
contract. This meant that local law firms such as Taylor, Wood & Thompson lost a sizeable source of
revenue. The need to increase efficiency levels and cut costs while at the same time looking for new
areas of business became a pressing strategic concern for Iain and the firm’s partners.
In order to address the backlog of litigation cases, Iain set out to work in ‘a two-people band’
with Lisa, a secretary that he judged ‘very capable, methodical and undervalued’. This is how he
described his modus operandi:

I sought to exploit the militancy of the hierarchical glass-ceilinged, predominantly female support staff,
who were being obliged to start hole-punching and positioning neatly A4 paper carbon onto paper files.
Because Lisa worked as a file handler as opposed to a secretary – and I did not need one, I needed someone
to work with – that released so much of my time to then look at the programming into the future. We
developed an approach which was, again, the quality system, and we learned a lot about quality and
computerisation – so something which would have taken 10 minutes, 15 minutes on dictation, would take
3 seconds after we’d invested the time and the creation of the master documents. (Personal interview with
Iain Lennox, 18 February 2008)

Iain also elaborated on how he drew from the knowledge of processes and computing that he had
gained in Australia:

We had a software, but in order to move volume which kept coming in we needed to twist it. We were
stymied by the inadequacy of the software provider because they would never come and show us how. I

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768 International Small Business Journal 32(7)

had the self-confidence, I will do it: learn the language and develop a process model concept to generate
documents. Once I’d learnt how to go behind the scenes to look at the language that the master documents
were written in, then you just copy it and then start copying it and start building chains of documents – and
so things which in a conventional law firm environment were dictated to a secretary were automated.
(Personal interview with Iain Lennox, 18 February 2008)

Taylor, Wood & Thompson’s habitual response to peaks in the level of case-handling activity was to
recruit temporary secretarial help for dictation and manual compiling, ‘literally throwing more
hands at it’. However, the insolvency backlog was never fully cleared. More significantly, it was
growing at the time of the events analysed in this article, due to the increasing volume of activity in
litigation. In the language of the model in Figure 1, Iain’s approach to the failure of an established
organisational routine resulted in the creative reorientation of the flow of ongoing activity, and
therefore in the emergence of entrepreneurial action. As shown in Figure 2, his intervention led to a
reconfiguration of the exchanges between Taylor, Wood & Thompson and two of its key resource-
dependent constituencies: its customers and its technology suppliers. With in-house development of
new software and Iain’s knowledge and expertise, Taylor, Wood & Thompson developed techno-
logical capabilities that it did not previously possess. This meant that the firm found itself in a posi-
tion to reshape its existing deal with its main software and technology supplier. More specifically,
the old contract was terminated and a new one negotiated: one that significantly reduced Taylor,
Wood & Thompson’s dependency in the increasingly strategically important area of technology
services. As a result of Iain’s efforts and the development of the new system, case-handling in litiga-
tion was completely automated, and computerised procedures replaced human interaction and man-
ual processing in the vast majority of dealings with customers. This change did not simply entail a
technological substitution – with machines replacing humans – but radically altered the nature of the
exchange between the firm and its customers in litigation as well as in other business areas.
Efficiency rose dramatically, and significant gains in time and cost were passed on to customers in
the form of more competitive (speedier and cheaper) litigation services. However, the effect of
Iain’s entrepreneurial action did not stop here. The systematisation and automation of procedures
undergone at Taylor, Wood & Thompson meant that the firm was now able to take advantage of the
significantly increasing market demand in litigation, as well as cope with its backlog of existing
cases. A new deal could be made with old and new customers alike, based on a completely new
business proposition. As a consequence, the existing balance between Taylor, Wood & Thompson’s
traditional branches of activities was radically altered, and litigation became the biggest and most
profitable area of business. Whereas commercial and family law had formed the traditional back-
bone of the firm, these activities were becoming less core for its long-term survival. Their operations
were subsidised increasingly by the growth in litigation services: an emergent strategic shift that
would bear consequences for the whole concern, as later events illustrate.
The model in Figure 1 and the visualisation in Figure 2 guide our understanding of how entrepre-
neurial action emerged in the specific historical and organisational setting of Taylor, Wood &
Thompson at the beginning of the 1990s. Taylor, Wood & Thompson was the site where growing
tensions within the ever-emergent institutional logic of English law manifested themselves as con-
crete managerial problems. At the institutional level, broader tensions were associated with a series
of more specific institutional shifts in the UK legal services industry, which in this present study’s
case can be traced in the societal rise of litigation, the significant changes to HM Custom & Excise’s
contractual arrangements, and the progressive convergence between legal and insurance services. At
the organisational level, such institutional tensions and shifts translated into Taylor, Wood &
Thompson’s complex challenge to increase its operational efficiency (by, for example, modernising

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Spedale and Watson 769

its technology), while at the same time adapting to new competitive and market circumstances (by,
for example, exploiting new revenue streams in litigation). In terms of the present conceptual
scheme, Taylor, Wood & Thompson was the ‘home enterprise’ of the key entrepreneurial actor
(Watson, 2013a), where institutional tensions interacted with similarly emerging tensions in an indi-
vidual’s (Iain) life-orientation and circumstances, including a desire to improve existing practices,
apply personal knowledge and experience and exercise power. This situated interaction resulted in
the emergence of entrepreneurial action, which materialised as a muddled and fuzzy chain of activi-
ties rather than as the linear, rational plan described in mainstream entrepreneurship models. Iain
mobilised all sorts of means within his reach, from personal knowledge to interpersonal connec-
tions, in order to find an effective solution. For example, he drew on his experience of processes and
systems developed in Australia, transferring knowledge from quality management to handling
administrative practices. At the same time, he mobilised a connection with a fellow employee, Lisa,
and transformed the hierarchical boss–secretary relationship embedded in Taylor, Wood &
Thompson’s culture and practices into a more egalitarian partnership. This confusion and reversal of
the end–means schema lends support to the pragmatist critique of utilitarianism, and testifies to the
fruitfulness of refocusing the study of entrepreneurship around the concept of action in its two coter-
minous dimensions: habit and creativity.

Creating a new venture

By the mid-1990s, one of the most significant changes in the UK legal services industry was the
opening up of new markets at the intersection between litigation, insurance and financial services
(Morgan and Quack, 2005). The motor insurance field in particular was contested and institution-
ally fragmented (Westall, 1997; Yates, 1993). Legal insurance to cover road accidents, an innova-
tive legal practice that was established already in countries such as Germany, developed at a fast
pace in the UK. Significant developments also occurred in the fields of computing and mass-
communications technologies. Companies such as Direct Line abandoned the old business model
to sell motor insurance directly over the phone to the mass market, creating a new high-volume
competitive arena.
Taylor, Wood & Thompson was suffering from poor financial performance in its traditional
departments (commercial and family law), with litigation – now the biggest and fastest-growing
branch – effectively subsidising the whole firm. Conflicting institutional logics at industry level
manifested themselves at the organisational one, in the form of growing tensions between the part-
ners in regard to both the future strategic direction of the business and its operational practices. A
clear split emerged between the two camps of traditionalists, who were inclined to continue with
the traditional portfolio of activities, and modernists, who were in favour of reorienting the firm’s
portfolio towards litigation and insurance services. Chris, the partner in charge of litigation, sat
firmly in the modernist camp, and had developed valuable contacts in the motor insurance sector
already. Iain concurred that legal services could become a volume business if a lean business
model were developed though systematising and standardising all service procedures. Further dis-
agreement emerged around Taylor, Wood & Thompson’s need for a formalised human resources
function: an option championed by Henrietta, the partner in charge of family law and conveyance,
but unequivocally opposed by others, including Iain:

You cannot have a wishy-washy strategy: no bloated centralised functions of finance and HR. Henrietta
from family [law] started creating a HR function. To me that’s lever-arch files and gossip. (Personal
interview with Iain Lennox, 30 April 2007)

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770 International Small Business Journal 32(7)

At the end of the 1990s these faultlines became too deep, and Taylor, Wood & Thompson’s partners
split. Iain and Chris joined efforts and resources to create NoPaper, a new enterprise to provide
mass-market legal services for the motor insurance industry. Iain described this entrepreneurial
action in terms of the creation of a ‘national, legal-services supermarket where pink-ribbon lawyers
once stood, because you cannot run a sausage factory as a delicatessen’ (personal interview with
Iain Lennox,  21 May 2008).
The creation of NoPaper constitutes another manifestation (see Figure 2) of the process of the
emergence of entrepreneurial action conceptualised in Figure 1. Competing and conflicting insti-
tutional logics in the legal services, motor insurance and communications technologies industries
interacted with the emerging life-orientations – and related tensions in personal circumstances – of
two individuals, Iain and Chris, who shared a common understanding of Taylor, Wood &
Thompson’s predicament and its overt failure. NoPaper’s lean business model centred on the radi-
cal automation and virtual handling of all interfaces and exchanges with resource-dependent con-
stituencies both inside and outside the newly-established organisation. Specialised software was
developed in-house to handle internal administrative practices in an automated way: for example,
in the areas of personnel management and finance and accounting. Equally specialised software
was developed to manage exchanges with customers, suppliers and service providers. This is how
Iain described NoPaper’s creative deal-making approach:

At the beginning, it’s kind of two-dimensional in terms of relatively flat processes, but then you start the
connectivity which is building the chain, which is the logical thought process being translated into the
software, so that the system then knows that when you send a letter to the client enclosing that, then a letter
also goes to the court at the same time – so link[ing] the two … The printed paper output then is all
automated, no paper anywhere – no filing cabinets, just technology, our ‘nervous system’. (Personal
interview with Iain Lennox, 14 July 2008)

In the concrete situation described above, entrepreneurial action emerged through the creation of
NoPaper as a new business venture: a process which, in contrast with the utilitarian ends–means
schema of mainstream entrepreneurship models, unfolded in a haphazard and muddled fashion.
Iain and Chris did not engage in the systematic implementation of a rationally thought-out plan, but
mobilised the available resources (for example, Chris’s contacts in the motor insurance industry)
in a rather chaotic and fuzzy sequence of actions with mixed, variable and often unpredicted out-
comes. At the time that the fieldwork was carried out, NoPaper had survived the risky early stages
that characterise the life of new ventures, and was an established, highly profitable and rapidly
expanding business. Its case is paradigmatic of both a personal and organisational success story
that easily could fit many of the myths populating mainstream entrepreneurship literature. However,
the visual account in Figure 2 tells a different story, one where the stream of ongoing action is inter-
rupted constantly by tensions and challenges at different levels – institutional as well as individual –
and reoriented through the interplay of creativity and habit. Iain’s own reflection on his personal
history and the birth of NoPaper is a fitting reminder of the contested nature of the process of the
emergence of entrepreneurial action, and of the multiple, deep tensions that this involves:

The systematisation of process is anathema to legal professionals, it erodes their competence. They regard
the process model as the demise of the profession. I don’t get invited to law dinners. This is what
distinguishes the approach of NoPaper: my standardisation of processes plus the high volumes. Its origins
are in manufacturing but it is applied in a knowledge-based business: it does not matter. (Personal interview
with Iain Lennox, 9 December 2008)

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Spedale and Watson 771

Discussion and conclusion

This article offers a broad challenge to established axioms dominating mainstream entrepreneur-
ship studies by rejecting methodological individualism, and by putting forward the case for theo-
rising beyond context in order to promote more contextual research into entrepreneurial activity in
society. Indeed, the false dualism separating context and individuals continues to be reproduced in
even the more contextual studies of entrepreneurship, often by means of superficial lip-service to
the notion of social embeddedness (Granovetter, 1985), or by the sterile development of taxono-
mies of context that unhelpfully conflate the notion of context with that of levels of analysis. This
article clears a more sociologically sensitive path for the study of entrepreneurship by developing
a model of the emergence of entrepreneurial action which comprises the analytical distinction
between society, the organisation and the individual without privileging any one dimension. Such
a model combines insights from American pragmatism and the theory of creative action (Joas,
1996), with recent developments in the institutional logics perspective and, more specifically, the
notion of institutional logics and its role in the dynamics of practice variation.
The model of the emergence of entrepreneurial action in Figure 1 is both an input and an
output of the researchers’ investigative efforts: informed by extant knowledge and theorisations
in the field of entrepreneurship, it guided the fieldwork (see the visualisation of the analysis in
Figure 2) and, in turn, was refined and modified on the basis of empirically-based theorising,
following a mode of enquiry that resembles very closely the notion of abduction (Peirce, 1998).
Entrepreneurial action emerges at the intersection between tensions at the general level of insti-
tutional logics, on the one hand and, tensions at the level of individual actors’ circumstances, on
the other. It is at this intersection that history and biography meet (Mills, 1970) and interact.
Institutional logics and individual actors’ tensions constitute recurring interruptions in the stream
of ongoing action that is society at large and, at an intermediate level, the business field (i.e. the
distinctive field of deal-making with resource-dependent constituencies). That is, they represent
challenges to the established routines and habits that give meaning to and guide unreflective
human behaviour, and manifest themselves as action problems in concrete business management
situations. Their interaction opens up a ‘horizon of possibilities’ (Joas, 1996) and, by calling
forth the dimension of creativity to reorient the flow of ongoing action, introduces something
new – indeed entrepreneurial – in history.
The notion of emergence at the core of the model in Figure 1 departs from what Sarasvathy
(2001) has referred to as the causation model of mainstream entrepreneurship studies, by empha-
sising the non-linearity of social action in direct criticism to the Cartesian dualism of thought and
action. As shown in the visualisation of entrepreneurial action in Figure 2, means have a greater
role over goals (Kay, 2010; Mintzberg, 1994; Watson, 2006; Weick, 1979) in an ongoing process
characterised by tension, conflict, chance and serendipity. Iain never adhered to a thought-out
rational plan, but engaged instead in a muddled, fuzzy and haphazard series of continuous adjust-
ments, revisions and rescheduling of activities and deals. In this rejection of linear logic as the
necessary foundation of enterprising activity, the notion of emergence is similar to that of effectua-
tion proposed by Sarasvathy (2001, 2008). However, it goes further in highlighting the interacting
nature of the relationship between society and the individual (Davidsson, 2004), and in moving
beyond the untenable dualism of actor and context. Moreover, the notion of emergence presented
in this article shares similarities with the creative process view of entrepreneurship (Hjorth et al.,
2008; Steyaert, 2007), more specifically in respect to the centrality of action over individuals, and
the pivotal role given to creativity. However, there are some differences. According to supporters
of the creative process view, creativity is a feature of the entrepreneurial process itself that is

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772 International Small Business Journal 32(7)

connected to its open-endedness (Steyaert, 2004, 2007), contingency (Downing, 2005) and, in
recent contributions, its organisation-creation character (Gartner, 2012). Instead, the notion of
emergence in this article is rooted on a conceptualisation of action as both creative and habitual
(Joas, 1996). Creativity does not reside exclusively in the process: it is intrinsic to action itself, and
it is the interrelation between the creative and habitual dimensions of action that lies at the core of
entrepreneurship. Besides, while contributions associated with the creative process view of entre-
preneurship emphasise the relational power of language and storytelling, and highlight the role of
narrative rationality (Hjorth, 2012), the theoretical scheme in this article relies on a Weberian
understanding of rationality as institutionally contingent and on the related notion of institutional
logics (Thornton et al., 2012) to conceptualise the non-teleological process of the emergence of
entrepreneurial action.
What might be seen as the double irony of focusing on an individual to counteract individualism
in entrepreneurship study, and of arguing in favour of a more contextual approach by moving
beyond the notion of context itself is compounded by another ironic twist in the article. What many
observers might read as the history of the creation of a new business venture, NoPaper, instead
constitutes a strong case against equating entrepreneurship with the creation of new business ven-
tures (Gartner, 1988, 1993). The visualisation of the emergence of entrepreneurial action in
Figure 2 clearly shows how such a process can be situated in a variety of organisational settings.
Taylor, Wood & Thompson was the home enterprise (Watson, 2013a) for the first of Iain’s entre-
preneurial actions presented in this account: the creative reorientation of deal-making with
resource-dependent constituencies in the area of litigation. With the creation of NoPaper, Iain took
the role of the traditional owner-manager depicted in mainstream entrepreneurship literature, but
such a turn of events is by no means a defining characteristic of entrepreneurial action.
The analysis presented in the article is only a small part of a much larger empirical effort carried
out by the authors to promote greater sociological sensitivity in the study of entrepreneurial phe-
nomena. The need to develop a more contextual approach to entrepreneurship studies has been
widely recognised by researchers from different backgrounds: it must be acknowledged that this
article does not stand alone, but joins in an ongoing and increasingly sophisticated conversation. In
addition, it must be recognised that this particular study has been only one of many empirical
inputs into the theoretical work that has led the researchers to develop the conceptual model pre-
sented in the article. Nonetheless, it does play an invaluable role in vividly illustrating key ele-
ments of the theoretical line being developed, and in reiterating the value of a methodological
approach that does not conceive of the conceptual and the empirical as separate stages, but instead
relies on the constant dialogue between, and interweaving of, theory and practice.
The account crafted in this article to communicate complex research efforts is organised tempo-
rally. However, the story unfolding in this article was never an inevitability, something bound to
happen according to universal rules, given certain assumptions and premises, and waiting to be
revealed as reality by observant researchers. Neither is it but one of the myriad subjective accounts
that socially construct, indeed constitute, entrepreneurship as a linguistic phenomenon according
to interpretive researchers. Rather, it is the most ‘truthful’ (in pragmatist terms) account that could
be produced of the complex interweaving of societal, organisational and individual dimensions
from which entrepreneurial action emerges.

Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit
sectors.

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Spedale and Watson 773

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Author biographies
Simona Spedale is Associate Professor of Organisational Behaviour and Human Resources Management at
Nottingham University Business School. Her current research activities focus on the study of inter-organisational
relationships, sense-making in organisations, entrepreneurial action and institutional change. She also has a
keen interest in historical approaches to the study of organisational phenomena.

Tony J. Watson is Emeritus Professor of Sociology, Work and Organisation at Nottingham University
Business School. His recent and continuing work focuses on the sociology of the pub, entrepreneurial action
in a variety of settings, and on pragmatic realism in ethnographic and organisational studies. He is the author
of In Search of Management (Cengage Learning EMEA, rev. edn, 2001) and Sociology, Work and
Organisation (6th edn, Routledge, 2012). His 1977 book The Personnel Managers reappeared as a Routledge
Revival title in 2012, and Management, Organisation and Employment Strategy in 2013.

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