Call for Study Proposals

Paper Development Workshop

From Founder to Employee:

Rethinking Entrepreneurial Career Transitions

August 8, 2024

Chicago, IL

The Center for Free Enterprise at the University of Louisville, the Institute for Humane Studies, and the Coleman Entrepreneurship Center at DePaul University invite proposals for a paper development workshop (PDW) on the topic “From Founder to Employee: Rethinking Entrepreneurial Career Transitions,” to be held on August 8, 2024, in Chicago, Illinois, prior to the start of the Academy of Management (AOM) 2024 annual conference.

The PDW is open to the entire academic community, including scholars from any discipline, and registration to AOM is not required to participate in the PDW. Selected participants are eligible to receive up to two nights lodging and additional funding to help offset the costs associated with attending the PDW may be available, depending on need. They will also receive feedback on their proposals from a team of experienced entrepreneurship scholars that may include:

·         Daniel L. Bennett, University of Louisville

·         Stephan Gohmann, University of Louisville

·         Jeffrey Hornsby, University of Missouri Kansas City

·         Dan Hsu, North Dakota State University

·         Rob Mitchell, Colorado State University

·         Boris Nikolaev, Colorado State University

·         Maija Renko, DePaul University

The above team is working on securing a special issue on this topic in a highly regarded entrepreneurship journal.

RELEVANCE AND NOVELTY OF THE TOPIC

For most entrepreneurs, entrepreneurship is not a final destination (Burton et al., 2016). Starting and running a business is merely a stage in their professional journey. A staggering majority of entrepreneurs eventually exit their ventures (Shane, 2008), and instead of immediately pursuing another business opportunity (Hyytinen & Ilmakunnas, 2007; Luzzi & Sasson, 2016), they frequently seek employment in organizations (Koch et al., 2021; Mahieu et al., 2022). Career transition from entrepreneurship to organizational employment, including academia, is quite common (Burton et al., 2016; De Vos et al., 2021; Mahieu et al., 2021).

Given the significant proportion of entrepreneurs who transition to employment within existing organizations, understanding the implications of this career transition would seem to be important for both individuals and organizations. Transitions from entrepreneurship to organizational employment pose significant challenges for former entrepreneurs, who must adapt to a new organizational context that may differ substantially from their previous entrepreneurial environment. It also raises important questions for organizations that seek to attract and retain former entrepreneurs as valuable human capital. Despite the widespread nature of this phenomenon, our knowledge of it remains very limited. Although there is a large literature on entrepreneurial transitions, most studies focus on transitions into rather than out of entrepreneurship (Ding et al., 2023; Kacperczyk & Younkin, 2022). Thus, there is a substantial need to better understand these dynamics and the implications for both entrepreneurs making transitions into the labor force and the organizations that consider hiring them. This major knowledge gap is the impetus for this PDW, which aims to inspire many research questions from different perspectives.

From the perspective of the employing organizations, former entrepreneurs bring a unique set of skills and experiences (Danneels & Vestal, 2020; Lerner et al., 2007) that may help organizations grow and prosper in a rapidly changing world (Faleye et al., 2020; Lappi, 2023). Despite the potential advantages that former entrepreneurs could bring to a new organization, there are challenges and opportunities that they would face in joining the organization. Former entrepreneurs could encounter various problems in the organization as they experience identity transition (Burton et al., 2016; Byrnes & Taylor, 2015) and adapt to a new organizational climate (Hsu et al., 2017). The challenge for an entrepreneur shifting contexts and environments would make sense given the socially situated nature of entrepreneurial cognition (Mitchell et al., 2011, 2014). Fearing a lack of commitment (Feng et al., 2022) and uncertainty regarding future productivity (Mahieu et al., 2021), firms may be hesitant to hire former entrepreneurs (Ding et al., 2023; Feng et al., 2024; Koellinger et al., 2015), particularly male entrepreneurs (Kacperczyk & Younkin, 2022), and may therefore face an entrepreneurship wage penalty when transitioning to organizational employment (Baptista et al., 2012; Kaiser & Malchow-Møller, 2011; Mahieu et al., 2022).

Facing a potential entrepreneur wage penalty, entrepreneurs may be hesitant to pursue employment opportunities with other firms (Failla et al., 2017). Many entrepreneurs exhibit a strong preference to remain business owners (Lafontaine & Shaw, 2016), particularly in countries with strong pro-market institutions (Gohmann, 2012), another factor that likely contributes to their hesitation to transition from entrepreneurship to organizational employment. Despite these challenges, former entrepreneurs who transition to organizational jobs may also experience benefits such as accelerated career advancement (Baptista et al., 2012), higher earnings (Campbell, 2013; Luzzi & Sasson, 2016), and improved well-being (Mattes, 2016; Nikolova et al., 2021). Given these potential contradictions, more research is needed to better understand the motivations, preferences, and traits of entrepreneurs transitioning to organizational employment (DeTienne, 2010; Maertz & Campion, 2004), and how these, as well as contextual factors (Roach & Sauermann, 2015), may influence the type of organizations that they pursue employment (Baptista et al., 2012). This will improve our understanding of why, how, and under what conditions re-entering organizational work can be mutually beneficial for former entrepreneurs and the organizations employing them.

We welcome rigorous theoretical and/or empirical studies that draw on various theoretical perspectives to examine the widespread phenomenon of organizationally employed former entrepreneurs. For example, a resource-based view could be used to understand how the former entrepreneur can contribute to the organization that they have joined (Ployhart, 2021). Socially-situated cognition theory (Mitchell et al., 2011) might be used to understand the situated and distributed nature of the cognitive processes that enable and/or constrain the former entrepreneur in contributing to the organization. Attraction-selection-attrition theory could clarify how former entrepreneurs adapt to a new work environment (Ahmetoglu et al., 2021; Hsu et al., 2017). Institutional theory may be helpful to understand how entrepreneurs gain legitimacy as potential employees and/or how differences in cultural and institutional environments shape entrepreneurial traits (Boudreaux et al., 2021; Mueller & Thomas, 2001; Nikolaev & Bennett, 2016) that may influence occupational choice dynamics (Gohmann, 2012). Theoretical perspectives that account for experiences of women, minorities, and those coming from underserved backgrounds can provide novel insights as the experience of entrepreneurship is always embedded in its societal context. In addition to advancing the theoretical understanding of this multi-faceted phenomenon, we also encourage a wide variety of empirical approaches. Understanding this phenomenon in a robust way will also have practical implications for organizations or policymakers that seek to leverage the unique knowledge, skills, mindsets, and experiences of former entrepreneurs.

RESEARCH THEMES & POTENTIAL RESEARCH QUESTIONS

We seek contributions that rigorously examine important and understudied issues related to the transition of entrepreneurs into organizational employment. Below are several research themes with sample research questions that are of interest. However, we certainly welcome well-executed studies that address important, unresolved questions not explicitly mentioned here.

1. Knowledge Transfer and Knowledge Creation

·         How do former entrepreneurs contribute to knowledge transfer and knowledge creation within organizations? What are the barriers to knowledge transfer?

·         How can organizations leverage the unique skills, knowledge, past experiences, and mindset that former entrepreneurs bring to organizations to improve their performance?

·         How do former entrepreneurs transitioning into organizational employment contribute to intrapreneurial activities within their new organizational context, and what factors influence their effectiveness and integration as intrapreneurs?

2. Organizational and Cultural Adaptation

·         How do former entrepreneurs cope with the challenges of transitioning from entrepreneurship to non-entrepreneurial roles within an organization?

·         How do the organizational or cultural norms influence transitions between modes of employment?

3. Entrepreneurial Cognition

·         How does the situated context of paid employment versus self-employment shape the entrepreneurial cognitions of the entrepreneur and the entrepreneurial cognitions evident in the larger corporate context?

·         What are the cognitive biases that former entrepreneurs may bring to the organization, and how such biases can be mitigated or leveraged in a positive way?

4. Well-being and Emotions

·         How do individual differences in personality, resilience, and coping shape the well-being of former entrepreneurs during the transition process?

·         What practical strategies can be used to promote the well-being of former entrepreneurs during the challenging transition to new organizational roles?

5. Impact on Existing Employees

·         In what settings would the former entrepreneur be seen as a star employee or troublemakers? How would these outcomes affect the existing employees?

·         How do existing employees perceive the arrival of former entrepreneurs in their organization? What factors shape their initial reactions and subsequent attitudes?

6. Synergy and Resource Utilization

·         If a former entrepreneur leaves the employing organization to start another business, how can the organization work with former entrepreneurs to create synergies?

·         What are the potential benefits and risks if an organization supports or discourages former entrepreneurs from starting new ventures?

7. Occupation Choice Dynamics

·         Besides business failure, what individual and contextual factors motivate entrepreneurs to transition into organizational employment?

·         What types of organizations do transitioning entrepreneurs seek employment and why?

·         What role, if any, does hybrid entrepreneurship play in the transition process from full-time business owner to full-time organizational employee?

·         How do cross-cultural and institutional differences influence these occupational choice dynamics?

8. Strategic Human Resource Management

·         How can organizations strategically recruit and retain former entrepreneurs?

·         What are the pros and cons of hiring former entrepreneurs, and how can organizations create roles and processes that maximize the benefits and minimize the risks of employer former entrepreneurs?

SUBMISSION INFORMATION

Authors interested in participating in the PDW to be held in Chicago on August 8, 2024 should submit an short proposal (max 2 pages, double-spaced, excluding references, figures, and tables), outlying the research question, hypotheses, methods, main findings (if available), and contribution by May 31, 2024 by email to Daniel Bennett (daniel.bennett.2@louisville.edu). Please include “PDW Submission” in the subject line of your email.

As noted above, selected participants are eligible to receive up to two nights lodging and additional funding to help offset the costs associated with attending the PDW may be available, depending on need. Due to limited funding and the desire to provide detailed feedback, space is limited and preference will be given to proposals that most closely align with the themes identified above and to PhD students and junior scholars who are likely to benefit the most from receiving feedback and interaction with experience scholars.

SELECTED REFERENCES

Ahmetoglu, G., Nefyodova, V., Chamorro-Premuzic, T., & Codreanu, S.-C. (2021). What Leads Entrepreneurial Employees to Want to Quit, or Stay in, Their Job? Exploring Two Conflicting Mechanisms. Applied Psychology, 70(2), 738–758. https://doi.org/10.1111/apps.12250

Baptista, R., Lima, F., & Preto, M. T. (2012). How former business owners fare in the labor market? Job assignment and earnings. European Economic Review, 56(2), 263–276. https://doi.org/10.1016/j.euroecorev.2011.08.004

Boudreaux, C. J., Bennett, D. L., Lucas, David S., & Nikolaev, Boris. (2021). Entrepreneurial Self-Efficacy, Opportunity Recognition, and Fear of Failure as Mediators of the Relationship between Institutions and Opportunity Entrepreneurship. Working Paper.

Burton, M. D., Sørensen, J. B., & Dobrev, S. D. (2016). A careers perspective on entrepreneurship. Entrepreneurship Theory and Practice, 40(2), 237–247.

Byrnes, R. T., & Taylor, S. N. (2015). Voluntary transition of the CEO: owner CEOs’ sense of self before, during and after transition. Frontiers in Psychology, 6, 155919.

Campbell, B. A. (2013). Earnings Effects of Entrepreneurial Experience: Evidence from the Semiconductor Industry. Management Science, 59(2), 286–304. https://doi.org/10.1287/mnsc.1120.1593

Danneels, E., & Vestal, A. (2020). Normalizing vs. Analyzing: Drawing the lessons from failure to enhance firm innovativeness. Journal of Business Venturing, 35(1), 105903.

De Vos, A., Jacobs, S., & Verbruggen, M. (2021). Career transitions and employability. Journal of Vocational Behavior, 126, 103475. https://doi.org/10.1016/j.jvb.2020.103475

DeTienne, D. R. (2010). Entrepreneurial exit as a critical component of the entrepreneurial process: Theoretical development. Journal of Business Venturing, 25(2), 203–215. https://doi.org/10.1016/j.jbusvent.2008.05.004

Ding, W. W., Lee, H. J., & Shapiro, D. L. (2023). Are entrepreneurs penalized during job searches? It depends on who is hiring. Strategic Entrepreneurship Journal, 17(4), 713–740. https://doi.org/10.1002/sej.1479

Failla, V., Melillo, F., & Reichstein, T. (2017). Entrepreneurship and employment stability—Job matching, labour market value, and personal commitment. Journal of Business Venturing, 32(2), 162–177. https://doi.org/10.1016/j.jbusvent.2017.01.002

Faleye, O., Kung, W., Parwada, J. T., & Tian, G. Y. (2020). Are entrepreneurs special? Evidence from board appointments. Journal of Business Venturing, 35(3), 106003. https://doi.org/10.1016/j.jbusvent.2020.106003

Feng, J., Allen, D. G., & Seibert, S. E. (2022). Once an entrepreneur, always an entrepreneur? Entrepreneurial identity, job characteristics, and voluntary turnover of former entrepreneurs in paid employment. Personnel Psychology, 75(1), 179–213. https://doi.org/10.1111/peps.12455

Feng, J., Wang, D., Huang, L., & Zhang, R. (2024). Hidden treasures or red flags? A recruiter’s view of (not) hiring former entrepreneurs into corporate jobs. Personnel Psychology, 77(1), 109–129. https://doi.org/10.1111/peps.12607

Gohmann, S. F. (2012). Institutions, Latent Entrepreneurship, and Self-Employment: An International Comparison. Entrepreneurship Theory and Practice, 36(2), 295–321. https://doi.org/10.1111/j.1540-6520.2010.00406.x

Hsu, D. K., Shinnar, R. S., Powell, B. C., & Coffey, B. S. (2017). Intentions to reenter venture creation: The effect of entrepreneurial experience and organizational climate. International Small Business Journal, 35(8), 928–948.

Hyytinen, A., & Ilmakunnas, P. (2007). What distinguishes a serial entrepreneur? Industrial and Corporate Change, 16(5), 793–821.

Kacperczyk, O., & Younkin, P. (2022). A Founding Penalty: Evidence from an Audit Study on Gender, Entrepreneurship, and Future Employment. Organization Science, 33(2), 716–745. https://doi.org/10.1287/orsc.2021.1456

Kaiser, U., & Malchow-Møller, N. (2011). Is self-employment really a bad experience?: The effects of previous self-employment on subsequent wage-employment wages. Journal of Business Venturing, 26(5), 572–588. https://doi.org/10.1016/j.jbusvent.2010.02.001

Koch, M., Park, S., & Zahra, S. A. (2021). Career patterns in self-employment and career success. Journal of Business Venturing, 36(1), 105998.

Koellinger, P. D., Mell, J. N., Pohl, I., Roessler, C., & Treffers, T. (2015). Self-employed But Looking: A Labour Market Experiment. Economica, 82(325), 137–161. https://doi.org/10.1111/ecca.12115

Lafontaine, F., & Shaw, K. (2016). Serial Entrepreneurship: Learning by Doing? Journal of Labor Economics, 34(S2), S217–S254. https://doi.org/10.1086/683820

Lappi, E. (2023). New Hires, Adjustment Costs, and Knowledge Transfer—Evidence from the Mobility of Entrepreneurs and Skills on Firm Productivity. Industrial and Corporate Change. https://doi.org/10.1093/icc/dtad032

Lerner, M., Zahra, S. A., & Kohavi, Y. G. (2007). Time and corporate entrepreneurship. In Entrepreneurial strategic processes (Vol. 10, pp. 187–221). Emerald Group Publishing Limited.

Luzzi, A., & Sasson, A. (2016). Individual Entrepreneurial Exit and Earnings in Subsequent Paid Employment. Entrepreneurship Theory and Practice, 40(2), 401–420. https://doi.org/10.1111/etap.12225

Maertz, C. P., & Campion, M. A. (2004). Profiles in quitting: Integrating process and content turnover theory. Academy of Management Journal, 47(4), 566–582.

Mahieu, J., Melillo, F., Reichstein, T., & Thompson, P. (2021). Shooting stars? Uncertainty in hiring entrepreneurs. Strategic Entrepreneurship Journal, 15(4), 526–567.

Mahieu, J., Melillo, F., & Thompson, P. (2022). The long‐term consequences of entrepreneurship: Earnings trajectories of former entrepreneurs. Strategic Management Journal, 43(2), 213–236.

Mattes, J. (2016). The impact of transitions into wage-employment for satisfied and unsatisfied entrepreneurs: A Bayesian analysis. International Journal of Entrepreneurial Behavior & Research, 22(3), 375–397. https://doi.org/10.1108/IJEBR-06-2015-0142

Mitchell, R. K., Mitchell, J. R., Zachary, M. A., & Ryan, M. R. (2014). Simulating socially situated cognition in exchange creation. In Handbook of entrepreneurial cognition (pp. 412–447). Edward Elgar Publishing.

Mitchell, R. K., Randolph-Seng, B., & Mitchell, J. R. (2011). Socially situated cognition: Imagining new opportunities for entrepreneurship research. Academy of Management Review, 36(4), 774–776.

Mueller, S. L., & Thomas, A. S. (2001). Culture and entrepreneurial potential: A nine country study of locus of control and innovativeness. Journal of Business Venturing, 16(1), 51–75. https://doi.org/10.1016/S0883-9026(99)00039-7

Nikolaev, B., & Bennett, D. L. (2016). Give me liberty and give me control: Economic freedom, control perceptions and the paradox of choice. European Journal of Political Economy, 45, 39–52. https://doi.org/10.1016/j.ejpoleco.2015.12.002

Nikolova, M., Nikolaev, B., & Popova, O. (2021). The perceived well-being and health costs of exiting self-employment. Small Business Economics, 57(4), 1819–1836.

Ployhart, R. E. (2021). Resources for What? Understanding Performance in the Resource-Based View and Strategic Human Capital Resource Literatures. Journal of Management, 47(7), 1771–1786. https://doi.org/10.1177/01492063211003137

Roach, M., & Sauermann, H. (2015). Founder or Joiner? The Role of Preferences and Context in Shaping Different Entrepreneurial Interests. Management Science, 61(9), 2160–2184. https://doi.org/10.1287/mnsc.2014.2100

Shane, S. A. (2008). The illusions of entrepreneurship: The costly myths that entrepreneurs, investors, and policy makers live by. Yale University Press.

Shepherd, D. A., & Patzelt, H. (2023). Me-Search for Generating Ideas for Entrepreneurial Theorizing. In D. A. Shepherd & H. Patzelt (Eds.), Entrepreneurial Theorizing: An Approach to Research (pp. 41–56). Springer International Publishing. https://doi.org/10.1007/978-3-031-24045-4_2

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