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Two-way exchange between society and the entrepreneur

An entrepreneur acts within a well-defined environment, not alone and not impervious to outside influences. In the same way, the actions of an entrepreneur affect—even significantly so—the social and institutional context within which the related enterprise operates. The same is true of the corporate culture of that enterprise, which is the result of influences and provocations that come from within, but which are also in constant contact with that which lies outside of the organisation.

All of this can be deduced by simply observing reality, but going from observation to theories that can lend rationality and methodology to this reality can take quite a bit of effort, and may lead to many errors in interpretation.

Works that provide a record of where we have been are, therefore, of great assistance in this regard,  particularly in a field of study as complex and delicate as that of entrepreneurship and corporate culture.

Shabir Bhat (University of Kashmir Business School) and Riyaz Khan (School for Entrepreneurship Studies at JKEDI in Sempora, Pampore, India) have accomplished just that. In their “Entrepreneurship and Institutional Environment: Perspectives from the Review of Literature”, the two Indian researchers analysed the most important literature of recent years that concerns the link between entrepreneurship and the “institutional environment”. What resulted was a methodical study of the leading journals that look closely at the various aspects of entrepreneurship,

with the two authors then identifying two intertwining levels of study that point to the connections between entrepreneurship and the environment. First of all, there is the “micro view”, which examines the aspects that are specific to the entrepreneur or found within the specific enterprise. When seeing the entrepreneur and related actions from a micro level, we base our interpretation of reality on the personal characteristics of the businessman, such as his ability to see development opportunities and formulate growth strategies as a result. The “macro view”, on the other hand, takes a series of factors into account that concern external processes that are often beyond the control of the entrepreneur. In this case, the review of the literature shifted onto an analysis of the social setting, the financial/capital environment, and the political/institutional environment and how they effect the actions of an enterprise.

Bhat and Khan thereby show that the available literature indicates that the institutional environment has a far-reaching impact on entrepreneurship development in any economy. Therefore, the authors conclude that the analyses of entrepreneurship should also be conducted through the lens of the institutional setup in which the entrepreneur operates.

And this is no obvious conclusion, but one that both confirms that an enterprise is a social entity and that the social and institutional setting can be crucial to the birth, growth and death of that enterprise. What is happing in Italy today could be an interesting case study in this regard.

Entrepreneurship and Institutional Environment: Perspectives from the Review of Literature 

Shabir Bhat, Riyaz Khan