CfP: Valuation Studies

See the call for papers here [PDF]. Here is the journal website: Valuation Studies. H/t CHARISMA. How is this related to the social study of entrepreneurship? Entrepreneurs engage in a variety of valuation practices through the entire life cycle of a start-up, from evaluating the various elements they acquire for creating new combinations to valuing the firm when the owners exit their investment. Valuation happens every time entrepreneurs engage with markets.

Valuation  Studies  is  a  new  open  access  journal  connecting  several  vibrant research fields working  on the study  of valuation as a  social practice.  To engage scholars  with  various  backgrounds  and  orientations  in  discussions  about valuation, the journal  welcomes  papers  in different  forms,  including papers that use or  combine a variety of methods, from ethnographic accounts to quantitative appraisal to conceptual interpretation.

The  overall aim of the new open access journal Valuation Studies is to foster valuable conversations in a new transdisciplinary and emerging field relating to the  study of  valuation as a  social practice. The journal’s first issue  will be available in the first half of 2013.

The  journal will provide a space for the assessment and diffusion of research that  is  produced  at  the  interface  of  a  variety  of  approaches  from  several disciplines:  sociology,  economic  sociology,  science  and  technology  studies, organisation  and  management  studies,  social  and  cultural  anthropology, market  studies,  institutional  perspectives  in  economics,  accounting  studies, cultural geography, philosophy, and literary studies. The project  emerges out of  the  increasing  synergies between these  approaches  around one  particular ambit: valuation.

Editors:

Professor C-F Helgesson, Linköping University
Senior researcher Fabian Muniesa, Mines ParisTech

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Neil Fligstein on sociology of entrepreneurship

From an interesting interview with Neil Fligstein (in The Browser), which he ends by reflecting on the future of economic sociology (though he is a bit harsh on economics :)

There’s a lot of interest in entrepreneurship, how new markets come into existence and their resemblance to social movements. Economics has almost nothing important to say about entrepreneurship and a lot of what’s being said about entrepreneurship comes from sociology.

Business schools are increasingly interested in applied economic sociology. Entrepreneurial studies are based on economic sociology. Courses on marketing and branding are infused with economic sociology. The main way in which economic sociology finds its way into the mainstream is through business studies and network analysis. And as for the dismal science of economics, I think reality undermines it every day without this assistance of sociologists.

Make sure to check out the rest of the interview as well, in which Fligstein discusses five of his most favourite economic sociology books (by Zelizer, Granovetter, Dobbin, Bourdieu and MacKenzie).


2nd EIASM Market Studies Workshop

All roads lead to Rome, and I suspect that social studies of entrepreneurship also lead to market studies. Therefore readers might be interested in this call for papers for the 2nd EIASM Interdisciplinary Market Studies Workshop in Howth near Dublin, Ireland, June 7-8, 2012. The deadline for a max. 3 page abstract is 27 January 2012. Invited guests will be professors Robin Wensley (Warwick, UK) and David Stark (Columbia, US). Apply here. More information here.

We particularly welcome in depth empirical studies of marketization processes in new areas and of major changes in existing markets. These settings provide excellent opportunities for reflection regarding the ordering devices, objects, models, representations, and tools that are set up and employed to propagate certain market forms over others, as well as the morality and values that underpin those instruments. In short, this workshop will revolve around the major questions of:

• What are the limits of market models and their realization?
• What practices are involved in (dis)ordering markets?
• What kinds of economic orders (markets or others) result from these efforts?
• What are the ‘civilizing’ effects of these orders, on markets, market actors and societies at large?
• What relationships exist between values realized in markets (for instance via the price mechanism) and the values underlying the marketization effort?
• What moral orders are used to justify marketization efforts?

Organising committee: Susi Geiger, University College Dublin, Debbie Harrison, BI Norwegian Business School, Oslo Hans Kjellberg, Stockholm School of Economics  and Alexandre Mallard, Ecole des Mines ParisTech


AoM 2011: Critical Perspectives in Entrepreneurship and Urban Development

I just received this interesting invitation to the AoM 2011 that mix entrepreneurship (from a critical point of view) with studies of Urban Development. What a mix!

Here the complete call:

Dear Friends and Colleagues Critters,
We are kindly inviting you to participate in our Panel Symposium at this year’s AoM in San Antonio. This panel symposium aims to challenge existing theories and approaches to urban development available in the mainstream entrepreneurship field through critical perspectives. By highlighting different reasons, aims and practices based on which diverse individuals, groups and communities engage in entrepreneuring activities for the purpose of urban development, we challenge the underlying economic assumptions guiding entrepreneurship theory and research. To this effect, our symposium aims to promote discussion around entrepreneurship as social change by focusing on its sociocultural, political, and economic drivers. The panel participants will focus specifically on issues such as food safety and urban activism, immigrant and transnational links in urban development, indigenous entrepreneurship in urban contexts, individual choice in social change for urban development, and questions around who reaps the benefits of urban development. Our goal is to foster conversation around these topics as well as discuss how critical perspectives can be utilized to redirect theorizing and research in the entrepreneurship field.
See below for a  session guideline with the different issues to be discussed. 
Cheers,
Arturo E. Osorio & Banu Ozkazanc-Pan

Program Session #: 1581 | Submission: 16493 | Sponsor(s): (ENT)
Scheduled: Tuesday, Aug 16 2011 3:00PM - 4:30PM at San Antonio Convention Center in Room 007 C
CRITICAL PERSPECTIVES IN ENTREPRENEURSHIP AND URBAN DEVELOPMENT and Urban Development
Organizer: Banu Ozkazanc-Pan; U. of Massachusetts, Boston 
Organizer: Arturo E Osorio; Rutgers U., Newark 
Panelist: Daniel Hjorth; Copenhagen Business School 
Panelist: Christopher Wheat; Rutgers U., Newark 
Panelist: Deirdre Tedmanson; U. of South Australia 
Panelist: Caroline Essers; Nijmegen U.
SESSION OUTLINE
1) General Introduction
2) First set of panelists: Different communities, entrepreneurship, and urban development
a) Deirdre Tedmanson: Indigenous Non-economic driven entrepreneurship development
b) Banu Özkazanç-Pan: Exploration of the intersections of globalization, immigration, and entrepreneuring to demonstrate transnational connections and urban development
c) Christopher Wheat: Accrual of benefits from urban spaces: opportunities for outsiders or locals
3) Second set of panelists: Urban entrepreneurship: Different aims and outcomes
a) Daniel Hjorth: Connecting entrepreneurship with the social in the context of urban development to achieve social transformation
b) Arturo E. Osorio: The role of natural science scientists as urban entrepreneurs solving day-to-day urban problems
4) Q&A
5) Conclusions
Search Terms: Critical perspective, Urban development, Social change

Entrepreneurship and sex

Now there is an interesting topic! The reason I’m bringing this up is not to raise the issue whether becoming an entrepreneur leads to having more or less sex (although who knows, maybe there is something to it). It is also not about entrepreneurship in the adult industry. It’s not even about entrepreneurship and gender. Rather, what got me thinking about entrepreneurship and sex is this BBC News article about recent research on how “worms’ sex life yields advantage over parasites.” The article claims that this is the first convincing evidence on why reproducing sexually has an advantage over asexual reproduction:

Worms forced to reproduce asexually succumbed to a nasty bacterial infection and died.

The researchers say the results are the most convincing evidence to date for a key theory in evolutionary biology.

The theory holds that sex evolved because it lets organisms reshuffle their genes into new combinations to stay a step ahead of parasites.

Reproducing asexually – where organisms clone themselves – makes much more sense; there is no need for an organism to search and seduce a mate, fight off competitors, or risk contracting a sexually transmitted disease. (…)

And yet sex exists; the vast majority of animals and plants reproduce this way.

The link to entrepreneurship and actor-network theory–our main interests on this blog–lies in evolutionary theory. Schumpeter drew on biological evolutionary theory for his definition of entrepreneurship as the creation of new combinations. Latour also described himself as a Darwinian philosopher at the February 2008 Harman Review event. In The Science of Passionate Interests, Latour and Lépinay cite Tarde’s critique of Darwin’s evolutionary theory:

His mistake […] seems to me to have been in relying far more on the struggle for existence, a biological form of opposition, than on cross-breeding and hybridization, biological forms of adaptation and harmony. […] And […] a fertile hybridization, as an exception, is far neater than a hereditary accumulation of small advantageous variations, through competition and selection, to explain the formation of new types of life. (p. 36)

Later on Latour and Lépinay provide another Tarde citation:

And, certainly, it is good that Darwin’s genius pushed this paradox to its limit, for, at present, it is still established that natural selection, that excellent agent of purifying elimination, does not create anything and posits that which it claims to explain–living renovations–in the form of individual variations, and that the secret of these creations of life are hidden from our eyes in the depths of the fertilized egg instead of consisting in the outer shock of organisms fighting each other… (p. 44)

It does sound like the above research findings about the sex life of worms justify Tarde’s insight. What does all this mean for entrepreneurship though?

Schumpeter makes a sharp distinction between entrepreneurship as innovation (the creation of new combinations), and the mere reproduction of existing business models. Using the biological metaphor, it seems entrepreneurs producing innovations are reproducing sexually, while managers who replicate existing business models are reproducing asexually. Who or what would be though the parasites that infect non-innovative firms?

The problem with making this sharp distinction between differentiating and reproducing firms, as I’ve suggested in earlier posts, is that it ignores the fact that for the innovation to survive it actually needs adopters, those that ‘merely’ replicate the innovation (which is of course unlikely to be just a mere adoption and is probably more like an adaptation of the innovation). Although one could argue that adopters of an innovation are part of the overall wave or network of innovation, and therefore they are also guests at the sex party. Who are then those unfortunate asexually reproducing firms then, and what sort of parasites are causing their demise? How to identify both?

Maybe this is not as difficult as it sounds. Even from a pop culture point of view, entrepreneurial ventures and entrepreneurs are celebrated as sexy (Just think of Richard Branson’s Virgin, a company name that is almost an ironic reference to the sexy nature of entrepreneurship). Working for a start-up is risky and dangerous but also exciting and sexy, as opposed to working for a boring firm that is engaged in the repetition of formulas. Still, don’t we need boring firms and asexual reproducers as well to maintain and sustain the stability of the economic environment, which then creates the conditions for sexy entrepreneurship?

(In any case, I do hope all this talk about sex is not going to result in an orgy of spammers.)


Definitions of entrepreneurship

In The Handbook of Economic Sociology, Howard E. Aldrich has a good summary and evaluation of various definitions of entrepreneurship, most of which have also been alluded to on this blog already. According to Aldrich, there are four competing definitions of entrepreneurship:

  1. The setting up of high-growth and high-capitalisation firms (as opposed to low-growth and low-capitalisation ‘lifestyle’ businesses);
  2. Innovation and innovativeness leading to new products and new markets (the Schumpeterian tradition);
  3. Opportunity recognition (the Kirznerian tradition);
  4. The creation of new organisations.

According to Aldrich there are problems with all four of these definitions. There is a strong selection bias with the first two. Whether a firm has high growth and had introduced an innovation can only be established retrospectively and high capitalisation is no guarantee of high growth or innovativeness. I would add that the political consequences of these definitions are also far-reaching, as they may lead to government policies favouring firms that are already in a privileged position, rather than provide support where it’s more needed.

The second and third definition according to Aldrich also suffers from the problem of being applicable to a wide range of situations, with entrepreneurship just being one. The effect of that is most evident e.g. in the afterlife of Schumpeter’s concept, which became more popular in the theory of the firm as a way of describing the R&D function, corporate venturing and intrapreneurship, than new venture formation in entrepreneurship studies. According to Aldrich, entrepreneurship studies had forgotten Schumpeter.

The adoption of Kirzner’s notion of “opportunity recognition” also had a particular disciplinary effect: because “opportunity recognition” has to do with an entrepreneur’s alertness and alertness seems to be a something that happens in the mind, this stream of research turned entrepreneurship into a problem of cognitive psychology, preoccupied with the figure – but especially the mind – of the entrepreneur.

The problem with the fourth definition according to Aldrich is that it is difficult to delineate when actually new organisations emerge as new social entities. It is both a philosophical problem and a methodological problem. Nevertheless, this last definition has been gaining support in entrepreneurship studies and Aldrich also picks it as the one to zoom in on in the rest of his chapter.

What can we make of these rival definitions and corresponding theories and their consequences from an STS/ANT perspective? The problem of selection bias in the first two definitions makes them interesting candidates for considering the political consequences of those theories, and the current work-in-progress UK government policy of channelling support away from ‘lifestyle’ firms to those perceived as ‘high-growth’ firms provides an excellent case study.

At the same time Schumpeter’s theory of innovation/entrepreneurship as “the creation of new combinations” deserves renewed attention. An argument could be made for disentangling these two concepts and clarifying their relationship, bringing into the picture those new firms as well that adopt the “new combination” but in themselves may not fit the “high-growth” and “innovative” label. In effect I’m arguing about establishing a link between definitions 2 and 4 that would not be subject to the selection bias (i.e. empirical work would focus not only on the innovating firm that is already in a high-growth stage with its innovation in diffusion but on any enterprise that participates in some form in the adoption or distribution of the innovation, even if it’s a low-growth ‘lifestyle’ firm and therefore seemingly only a consumer or repeater of the innovation). The Schumpeterian concept of “new combinations of resources” also offers an opportunity to examine the nature and origin of those resources (both human and nonhuman) that are being combined, as well as the very activities and practices that are needed for creating a new combination.

Kirzner’s thoughts on entrepreneurship could also be revisited from a ‘new’ new economic sociology perspective. However, rather than focusing on the thought processes of the entrepreneur, it might be more interesting to focus on the aspect of Kirzner’s theory that deals with the relationship between the entrepreneur and the market and considers the entrepreneur as a market participant.

The fourth definition is of course naturally attractive to an STS-inclined researcher, considering that the emergence of new entities has always been a core interest of STS and ANT studies. When it comes to entrepreneurship however, it would be important to consider the same point as with the Schumpeterian theory, namely that the role of seemingly repetitive or imitative venture creations should not be disregarded in favour of the highly innovative or controversial ones. Perhaps a Gabriel Tarde quote can be helpful here:

The problem can be summed up as follows: to grasp as closely as possible the genesis of inventions and the laws of imitations. Economic progress supposes two things: on the one hand, a growing number of different desires, for without a difference in desires, no exchange is possible, and, with the appearance of each new, different desire, the life of exchange is kindled. On the other hand, a growing number of similar exemplars of each desire taken separately, for, without similitude, no industry is possible, and, the more this similitude expands or prolongs itself, the more production is widened or reinforced. (Psychologie économique, cited in Latour and Lépinay, p. 35)


Learning from the social studies of finance

The inspiration to start this blog to a large extent came from the Socializing Finance blog, which has set the example of how to practice the ‘new’ new economic sociology in a specific empirical domain, the financial markets in their case, thus aiding the development of the social studies of finance. I thought it would be interesting to see if a ‘social studies of entrepreneurship’ could also be delineated, bringing together sociological and anthropological approaches to entrepreneurship that are sympathetic to the insights of an STS-inspired economic sociology.

In my previous post I tried to distinguish such a focus on the social aspects of entrepreneurship from a focus on social studies of innovation, which have been a mainstay of STS research. I’ve been arguing that entrepreneurship as new venture creation deserves a distinct analytical attention, even if it concerns unglamorous small firms who are considered adopters or repeaters of innovation at best (but which nonetheless tend to contribute half of the GDP and employment in developed countries). Especially the distinction between ‘ambitious’ high-growth ventures and ‘complacent’ lifestyle businesses has become a politicised one, in fact with a £154 million per year price tag, as that is how much the UK government is cutting by withdrawing government support from those designated as the latter (see the quote from the white paper by the UK Department for Business, Innovation and Skills).

How could a ‘social studies of entrepreneurship’ (SSE) learn from the social studies of finance (SSF)? Actually the flier [PDF] for the forthcoming SSF workshop with Daniel Beunza and Yuval Millo at the 2011 Academy of Management conference provides a good summary of the main features of SSF and thus could serve as a prompt for a reflection on how social studies of entrepreneurship could learn from their insights. Let’s take these points one by one.

SSF incorporates into a unified analytical framework three elements that affect the shaping and behavior of financial markets: performativity, materiality of markets and historical outlook. Performativity examines the impact that expert bodies of knowledge, such as accounting (Millo & MacKenzie, 2009), financial economics (MacKenzie & Millo, 2003) and management (Ferraro et al, 2005), have on the dynamics and the shaping of financial markets.

How could this issue of performativity be translated to the domain of new venture creation? I suppose the strong claim would be to say that specific expert knowledges on entrepreneurship and management perform the market for new ventures, directly affecting the rate of new venture formation in an economy. How entrepreneurs acquire their entrepreneurial expertise has been the subject of the nascent field of entrepreneurial learning and education, however it is a slightly different thing to say that specific theories perform new ventures. While there have been studies on the expansion of management knowledge, those have mostly looked at the role of consulting firms and educational institutions in the diffusion of management theories and practices. It would be interesting however to consider what specific institutions, disciplines and theories it takes to construct a new venture and in what sort of space does this actual performance takes place.

Materiality of markets pays particular attention to the technological (Beunza & Stark, 2004; Preda, 2006) artifacts through which prices are produced and market behavior is determined. (…) Among others, SSF scholars have referred to the spatial qualities of trading rooms and the computer programs used (Beunza & Stark, 2004) or the bodily presence and communication of pit traders (Zaloom, 2006) as determinants of market behavior. (…) Building on concepts from science and technology studies, SSF recognizes that financial markets are drenched in information and communication technology. This recognition motivated the SSF approach to look beyond human-to-human connections and to study how connections between machines and humans (e.g. market participants who use computerized pricing models) affect markets.

The material aspects of new venture creation have been long neglected in entrepreneurship studies. The focus is either on the cognitive capacities or personal and professional development of the individual entrepreneur, or on their access to human and social capital. The objects with which the entrepreneur and the start-up deal with and deal in generally do not enter the discussion, as they tend to be considered trivial. Instead, “material aspects” usually mean financial resources, the assumption being that if an entrepreneur has access to finance, he or she can have access to whatever material resources are needed. There is clearly an opportunity here to make a contribution to entrepreneurship studies by bringing objects into the discussion. Information and communications technologies today are just as an integral a part of a new venture as of financial markets, therefore the role of ICTs in new venture creation and their acquisition for and integration into an enterprise seem just as relevant and timely. Not to mention more complex quasi-objects (assemblages) that enterprises may be part of or are being constructed by.

The SSF approach also challenges the exclusive attribution of agency to individuals. In line with the work of cognitive scientist Edwin Hutchins (1995), SSF sees financial markets as an area dominated by distributed cognition, where the ability of an individual to make meaningful decision is framed by other actors, as well market devices such as models, analysts’ reports and computer systems (Beunza and Garud, 2007; Beunza, Hardie and MacKenzie,  2007).

This is a crucial point for entrepreneurship studies, as Juan and I discussed it in the comments section of the previous post. Entrepreneurship studies are in the clutches of the concept of the individual entrepreneur hero and its creative agency. Of course there have been attempts to break free from it by defining entrepreneurship as a business function instead (which, after Schumpeter and especially thanks to followers of Nelson and Winter, became synonymous with innovation that takes place mostly in corporate R&D departments) or in terms of socio-linguistic concepts like cognitive social capital and discourse. However, we still don’t have a good understanding of the main mechanisms at work through which entrepreneurial agency arises, if we suspend the assumption that this agency must coincide with the figure of the entrepreneur. That was certainly the assumption of the UK government when it decided to axe Business Link, the SME support agency, so we are being witnesses to an in vivo experiment as to what happens to entrepreneurial agency when a huge and powerful actor which played a central role in disseminating management practices among SMEs through its business advisers is completely disconnected from small firms.

The historical outlook of SSF is a methodological perspective that sees today’s financial markets as outcomes of historical processes. As such, to understand market dynamics, SSF necessitates the analyses of the long-duration process organizational history of markets and encourages a multifaceted study of intertwined arenas: regulatory, technological and commercial.

This focus on historical perspective would suggest that new venture creation at any given moment is the outcome of particular historical processes and therefore it would make sense to take the longitudinal view on the emergence of not only particular forms of entrepreneurial activity but also the settings within which it takes place. With ethnographic studies of small firms there is often the fear that the researcher will be limited to the “micro” setting, missing the macro aspects of the phenomenon. The ANT perspective is supposed to provide a solution for this, partly by avoiding the micro-macro distinction but also by insisting on the tracing of associations whether they lead near or far.

There is another interesting aspect of SSF which is not mentioned in the flyer: namely, the nature of markets as experimental devices, as testing sites. This is another area where a social studies of entrepreneurship could learn from SSF: by examining the ways in which entrepreneurs engage in experimentation and mechanisms and settings that allow for the testing of ideas, relationships, products, strategies etc. Closely related to that issue is the question of the relationship between a new venture and markets (that it buys from and sells to): what is the role of markets in the entrepreneurial process? What is the role of new ventures in these markets? The financial markets are themselves sites of entrepreneurship, therefore SSF studies of entrepreneurship in the financial sector would be of interest to social studies of entrepreneurship.

Finally, SMEs are totally dependent on the financial sector for their own existence and financing is an important aspect of setting up an enterprise and keeping it alive. One could say that the SME sector was the part of the economy that was most immediately affected by the recent financial crisis, because their interest rates for their overdraft were immediately increased and their access to additional financing was severally restricted, even before the redundancies at banks unfolded. Therefore there is a very strong relationship between what is going on in the financial markets (or even at the derivatives desks of investment banks) and the very existence of small firms and the possibility for setting up new ones. SSF could help with some insights in those areas as well.