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Groups Matter: Social Embeddedness of Entrepreneurial Activity

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Handbook of Economic Sociology for the 21st Century

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Abstract

This article argues that small groups matter in order to understand the coordination of entrepreneurial activity. Not only do small groups form and reproduce during the collective action of entrepreneurship, or rather entrepreneurial groups, but various forms of small groups provide trust and solidarity that enables and shapes the formation and boundary maintenance of entrepreneurial groups. Starting from a cursory overview of a sociology of entrepreneurship and drawing from both insights of a group sociology and the discussion of Granovetter’s dual problem of solidarity, this chapter identifies the variety of small groups as an important factor to understanding the variety of entrepreneurial activity. A contrast of two examples within one economic sphere, entrepreneurial families in German family capitalism, and start-up ventures in the Berlin start up field, illustrates how various forms of entrepreneurial groups co-exist. These forms draw from different small groups, the family, and the work team, with their respective institutional setting, when navigating the selection and exclusion of group members. Overall, this chapter sets up small groups as an additional layer to be considered in the social embeddedness of economic action.

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Notes

  1. 1.

    This section, hence, does not provide an encompassing overview of the development of the sociology of entrepreneurship (as e.g., Aldrich (2005) does). Rather it focuses on selected arguments needed to understand the ensuing discussion of the institutional embeddedness of entrepreneurial groups. I will not touch upon the large and influential idea of institutional entrepreneurship, which focuses on how embedded actors generate new institutions by crafting and implementing organizational forms and practices that break with established institutions (DiMaggio and Powell 1983; Battilana 2006).

  2. 2.

    In the interdisciplinary entrepreneurship literature such small groups engaged in venture creation are often referred to as entrepreneurial teams or new venture teams. In the following, I will use the term entrepreneurial groups as suggested by Ruef, but I will expand on its meaning.

  3. 3.

    Granovetter uses the terms coupling and decoupling, whereas I refer to inclusion and exclusion in order to differentiate the terms from their meaning in organization theory and to emphasize the crafting of group boundaries.

  4. 4.

    Granovetter uses the term ethnic group in the sense of a larger social group sharing an ethnic identity. I substitute his use of ethnic group with the term community in order to avoid confusion, with a different understanding of group that I will use for the remainder of this chapter: groups in the sense of small groups.

  5. 5.

    Remarkably, most research on entrepreneurial families pronounces a long-term outlook of their engagement and the wish that the business will be passed on across generations (Le Breton-Miller and Miller 2006; Colli 2013). However, this generalization seems biased towards large family firms and does not keep up with the heterogeneity of entrepreneurial families.

  6. 6.

    Remarkably, family ties are not fully alien to the Berlin new venture field as the case of the Samwer brothers, the founders of Zalando and owners of the equity investment firm Rocket Internet, famously illustrates.

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    Isabell Stamm

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    Andrea Maurer

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Stamm, I. (2021). Groups Matter: Social Embeddedness of Entrepreneurial Activity. In: Maurer, A. (eds) Handbook of Economic Sociology for the 21st Century. Handbooks of Sociology and Social Research. Springer, Cham. https://doi.org/10.1007/978-3-030-61619-9_17

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