Abstract

This paper assesses how societal disruptions lead to collective action that addresses institutional voids. Examining field data from Sweden’s response to the Covid-19 outbreak, we track institutional voids related to four product market categories. We construct a process model and elaborate on what we conceptualize as entrepreneurial constellations, which consist of collaborating business firms, public organizations, and the government. These entrepreneurial constellations facilitate the functioning of markets or forming of new ones to deal with a disruption. Through collective action, constellations coordinate problems and self-interest to overcome regulatory obstacles. Findings point to institutional voids that relate to surges during the need to scale up existing critical product markets, creating and innovating new critical product markets. Recognizing such institutional voids helps constellations coordinate expertise that collectively enacts regulatory changes and innovation in coordinative functions. While emerging, they accomplish ongoing evaluative reflections that permit them to autocorrect. This new conceptual understanding of the surprising presence and consequences of institutional voids in market economies, where they are not expected to develop and cause insufficiencies and suffering, explains how entrepreneurial constellations improvise solutions to societal disruptions.

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