Employing Control in Entrepreneurial Actions: An Action-to-Action Model

Abstract

Extant literature suggests that instead of focusing on predictive information, some entrepreneurs use control-based approaches in the course of the actions and events leading to creation of new ventures. However, this literature does not provide sufficient insight regarding through what specific mechanisms control is exerted by such entrepreneurs. We suggest that two mechanisms of (a) perceived disconfirmatory effect and (b) pragmatic legitimacy help actors in this task. Using perspectives from the psychology of action and institutional theory, we introduce an action-to-action model, which suggests that after entrepreneurial actions are performed, the involved actors engage in inductive reasoning to create working hypotheses related to the future venture and its products/services. These hypotheses are subsequently assessed using the above two mechanisms. In the subsequent actions, we suggest, only those actors will be involved who find these hypotheses to have sufficiently high levels of disconfirmatory effect and pragmatic legitimacy. If such actors perceive more and more control as they proceed, they are more likely to design future actions aimed at re-shaping and changing the environment. Otherwise, they are more likely to act towards aligning themselves to the perceived forces imposed by the environment. Implications for research and practice are also discussed.