The life cycle of an internet firm: Scripts, legitimacy, and identity

Israel Drori, Benson Honig, Zachary Sheaffer

Research output: Contribution to journalArticlepeer-review

78 Scopus citations

Abstract

We study, longitudinally and ethnographically, the construction of legitimacy and identity during the life cycle of an entrepreneurial Internet firm, from inception to death. We utilize organizational scripts to examine how social actors enact identity and legitimacy, maintaining that different scripts, both contested and consent-oriented, become the source of action for acquiring legitimacy and creating organizational identity. We show that scripts enable entrepreneurs and other social actors to invoke a set of interactions within and outside the organization. Scripts construct values and interests, form social bonding and consented actions, and eventually shape and reshape the individual and institutional contexts of identity and legitimacy. We found that the strategic action of organizational members in pursuing and enacting their preferred scripts depends on their position and role in the organization. We observed that the institutionalization of simultaneously competing scripts created a path-dependent process leading to organizational conflict and eventual failure.

Original languageEnglish
Pages (from-to)715-738
Number of pages24
JournalEntrepreneurship Theory and Practice
Volume33
Issue number3
DOIs
StatePublished - 2009

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