Why are they Committed? Examining the Entrepreneurial Process with Side-Bet Theory

Abstract

Along with an emerging body of literature investigating the volitional phase of the entrepreneurial process, the present research examines the determinants of entrepreneurial commitment, using Becker’s (1960) side-bets theory. Originally developed in the organizational setting, side-bet theory is a relevant framework to understand what compels individuals into consistent courses of actions. Powell and Meyer (2004) proposed seven category of side-bets and showed that they explained the development of different forms of commitment among employees, relying on Allen and Meyer (1990) multidimensional model of commitment. In this research, we propose to apply this seven-category lens to the context of emerging organizations, to further understand the development nascent entrepreneurs’ commitment profiles. After a pilot study designed to adapt Powell and al (2004)’s categorization to entrepreneurial activity, we operationalized it in a quantitative study (n=177) on nascent entrepreneurs. We examined how they relate and influence Meyer and al (2006)’s two basis of commitment – value-based and exchange-based -, targeting two foci relevant to the entrepreneurial process: entrepreneurial project and profession. Our results show that each form of nascent entrepreneur’s commitment is driven by a unique combination of side-bets. Therefore, it contributes to a better understand of nascent entrepreneurs’ mindset during the volitional phase of the entrepreneurial process.