Introduction
Entrepreneurial engagements with context help explain entrepreneurial practices that cannot be accounted for by economic factors alone (Liñán, Moriano, & Jaén, Reference Liñán, Moriano and Jaén2016; Luke, Verreynne, & Kearins, Reference Luke, Verreynne and Kearins2007). Context thus affects the entrepreneurial process (Corner & Pavlovich, Reference Corner and Pavlovich2007; Lang, Fink, & Kibler, Reference Lang, Fink and Kibler2014) pervading and influencing the micro processes that give entrepreneurial actions their substance and potency (Zahra, Wright & Abdelgaward, Reference Zahra, Wright and Abdelgawad2014). Indeed, a convincing case has been made for embracing socio-spatial contexts in our theories (Trettin & Welter, Reference Trettin and Welter2011; Huggins & Thompson, Reference Huggins and Thompson2014) to address the often ‘placeless’ character of entrepreneurial research (McKeever, Jack, & Anderson, Reference McKeever, Jack and Anderson2015). More conceptual development is needed to connect place and entrepreneurs (Fortunato, Reference Fortunato2014) and thus improve our understanding of the interplay of enterprise and its legitimacy with the social norms that characterise context (Meek, Pacheco, & York, Reference Meek, Pacheco and York2010). Such theoretical developments should enable better theorising of entrepreneurship in practice.
Our case describes a newcomer who set up businesses that revitalised a small New Zealand town. Using place as context, we explore how legitimacy was endowed or denied; how this impacted on her practice and, further, the way that place may form an integral part of entrepreneurship theory through legitimacy. We consider these interactions from different perspectives and see explanations in processes of embedding and the sense of place.
The study is theoretically informed by the conceptual framework that entrepreneurship is socially situated (Anderson & Obeng, Reference Anderson and Obeng2017) and is enacted within the context and community (Anderson, Drakopoulou Dodd, & Jack, Reference Anderson, Drakopoulou Dodd and Jack2012). As such, it interacts with the meanings and values of that community (Anderson & Gadeffors, Reference Anderson and Gaddefors2016). The perceived legitimacy of the entrepreneur’s practice is thus conferred on the basis of the fit with those values. Of course, the issue is that different community stakeholders, those who assign legitimacy, admire and hold different values. Some may focus on their sense of place, but others are more concerned with economic benefits.
We found that place sentiments can overwhelm economic rationality in conferring legitimacy. Although some legitimacy is accrued instrumentally from the economic benefits of entrepreneurship, legitimacy can also be withheld, or withdrawn, when the actions of the entrepreneur occur within a context impinge upon others’ emotion-charged sense of belonging and place identity. We conclude that legitimacy is not simply an individually held quality or characteristic. The phenomenon is more fluid and processual; legitimacy is accrued, held and weakened by context and circumstance. Economic dimensions of place shape what is technically possible, but cultural dimensions constrain and shape what is socially acceptable. Further, aspects of context beyond the ‘local’, particularly those external to the geographical location, can serve to intensify social aspects of place, embeddedness and subsequently legitimacy.
Contextualising entrepreneurship
Place precipitates shared sentiments and expectations generating strong feelings of attachment (Markey, Halseth, & Manson, Reference Markey, Halseth and Manson2010). De Clercq and Voronov (Reference De Clercq and Voronov2009) question the assumption that a newcomer entering a field automatically is deemed an entrepreneur and instead argue that he or she must be ‘legitimised’ as an entrepreneur by enacting taken-for-granted, yet conflicting expectations about ‘fitting in’ with field rules and ‘standing out’ as a rule breaker.
But how do entrepreneurs utilise place and what do they contribute to place? More particularly, how do we understand entrepreneurial engagement and enterprising rejuvenation of run down places such as once flourishing towns in rural New Zealand, which struggle as the bases of their prosperity disappear, leaving a spiral of decline? Characterised by low incomes, few economic opportunities and declining populations, ‘zombie towns’ (Eaqub (Reference Eaqub2014) are neither unique to New Zealand (Phillips, Reference Phillips2014; Fertner, Groth, Herslund, & Carstensen, Reference Fertner, Groth, Herslund and Carstensen2015) nor necessarily doomed to a self-perpetuating circuit of destruction (Anderson & Gadeffors, Reference Anderson and Gaddefors2016). Rather, depletion may be seen as a spatial form of creative destruction, where the new displaces the old, and in which entrepreneurship somewhat incongruously can perform dual roles of driving both destruction and development at a local level (Stockdale, Reference Stockdale2006; Skerratt, Reference Skerratt2013; Frankish, Roberts, Coad, & Storey, Reference Frankish, Roberts, Coad and Storey2014; Steiner & Atterton, Reference Steiner and Atterton2015).
Calls to better contextualise management (e.g., Hassan & Marimuthu, Reference Hassan and Marimuthu2018), particularly Organizational Behaviour, research (e.g., Capelli & Sherer, Reference Capelli and Sherer1991; Johns, Reference Johns2006; Bamberger, Reference Bamberger2008; Galvin, Reference Galvin2014), have reverberated with respect to entrepreneurship research (Welter, Reference Welter2011; Chalmers & Shaw, Reference Chalmers and Shaw2017), especially in depleted communities (Parkinson, Howorth, & Southern, Reference Parkinson, Howorth and Southern2016). Researchers have, however, offered limited guidance on how to study entrepreneurial engagement and interaction with place. Insights from allied fields such as regional studies (e.g., Paasi, Reference Paasi2001, Reference Paasi2003; Tomaney, Reference Tomaney2009; Ashforth & Kreiner, Reference Ashforth and Kreiner2014; Horlings, Reference Horlings2015) shaped our theoretical framework, informing our research problem and our approach to data collection and analysis. The problem revealed by the literature gap is not trivial: how place influences action, as interactions between the socially constructed meanings of place and perceptions of entrepreneurial actions in that place. Our research question seeks to examine how legitimacy is ascribed: What is the relationship between entrepreneurship, embeddedness and legitimacy when belonging and legitimacy are more complex than just an entrepreneur’s own legitimacy?
Place: a spatially defined milieu for entrepreneurship
Within the rational model of entrepreneurship, places are ‘actively reconstituted by entrepreneurs as beneficial territorial assets’ (Benneworth, Reference Benneworth2004: 454). Apart from physical aspects of place, perceived benefits of semi-rural contexts that may aid entrepreneurs include strong social attachments and informal institutional frameworks (Vaillant & Lafuente, Reference Vaillant and Lafuente2007), self-reliance and local networks (Rodriguez-Pose, Reference Rodriguez-Pose1999; Krueger, Reference Krueger2007; Barrett, Reference Barrett2015). Conversely, these intense local networks may challenge entrepreneurs in that they can result in resistance to entrepreneurial change (Morrison, Reference Morrison2014; Brouthers, Nakos, & Dimitratos, Reference Brouthers, Nakos and Dimitratos2015). Further, inhabitants’ strong attachments to place (Spiegel, Reference Spiegel2014), often steeped in history (Fritsch & Storey, Reference Fritsch and Storey2014) and place-identity and sense of belonging, are subject to much greater inertia than economic practices (McManus et al., Reference McManus, Walmsley, Argent, Baum, Bourke, Martin, Pritchard and Sorensen2012). Residents can collectively create a hostile environment for enterprise (Parkinson, Howorth, & Southern, Reference Parkinson, Howorth and Southern2016) and make top-down efforts to stimulate or support entrepreneurship ineffective, affecting social legitimacy (Kibler, Fink, Lang, & Muñoz, Reference Kibler, Fink, Lang and Muñoz2015).
Being ‘of the place’, embedded, has been shown to offer distinct advantages for local over newcomer or ‘outsider’ entrepreneurs (Akgün, Baycan-Levent, Nijkamp, & Poot, Reference Akgün, Baycan-Levent, Nijkamp and Poot2011; Cheung & Kwong, Reference Cheung and Kwong2017). Any newcomer must be seen to catalyse integration and interaction, rather than being perceived as someone dropped in and somehow directing action. Moreover, whilst embeddedness and attachment to place may inhibit entrepreneurial cultures (Parkinson, Howorth, & Southern, Reference Parkinson, Howorth and Southern2016: 3), ‘pre-embeddedness’ also enables the sum of all cultural, social and symbolic capital accessible to an entrepreneur before start up and high levels of pre-embeddedness also affect how they engage (Shaw, Wilson, & Pret, Reference Shaw, Wilson and Pret2016). Together, these interactions of practice and place affect the perceived legitimacy of entrepreneurial action in the sense of local approval and disapproval (De Clercq & Voronov, Reference De Clercq and Voronov2009). Accordingly, legitimacy (Dowling & Pfeffer, Reference Dowling and Pfeffer1975) provides us with a conceptual tool for gauging perceptions of entrepreneurs’ actions.
Here we attempt to address Kibler et al.’s call for more research that will cast light upon the role of ‘territorial embeddedness in shaping the entrepreneurship journey’ (Reference Kibler, Fink, Lang and Muñoz2015: 1). To what extent does economic benefit ameliorate some of the social dimensions of place? As mentioned earlier our research problem is: how does place influence action, as interactions between the socially constructed meanings of place and perceptions of entrepreneurial actions in that place and how is legitimacy ascribed?
The ‘local’ in establishing entrepreneurial legitimacy
Within place as context, ‘local’ matters and multiple perspectives on legitimacy exist because legitimacy cannot be solely self-ascribed, nor is it solely conferred by others, through activity and through achievements. Entrepreneurship is shaped by region-specific factors, often determined by local histories (Fritsch & Storey, Reference Fritsch and Storey2014; Gill & Larson, Reference Gill and Larson2014). And local matters, because entrepreneurship addresses, and is informed by, place-specific social, cultural, technological or industrial characteristics (Pike, Rodríguez-Pose, & Tomaney, Reference Pike, Rodríguez-Pose and Tomaney2007; Barca, McCann, & Rodríguez-Pose, Reference Barca, McCann and Rodríguez-Pose2012; Horlings, Reference Horlings2015; Huggins & Thompson, Reference Huggins and Thompson2015), all reflecting the socially embedded nature of entrepreneurship (Karatas-Ozkan, Anderson, Fayolle, Howells, & Condor, Reference Karatas-Ozkan, Anderson, Fayolle, Howells and Condor2014). Yet processes of local–entrepreneurial interactions are not well-understood (Fritsch & Storey, Reference Fritsch and Storey2014; Mayer & Baumgartner, Reference Mayer and Baumgartner2014) particularly in terms of legitimacy and ‘analysing the particular context in which entrepreneurs are embedded is crucial to understanding their entrepreneurial pathway’ (Cheung & Kwong, Reference Cheung and Kwong2017: 5).
Critical resources are the payoff for establishing legitimacy, created in the minds of the potential stakeholders through the careful manipulation of images and symbols by entrepreneurs (Zott & Huy, Reference Zott and Huy2007) and ‘developed in part through the verbal action of making claims’ (Williams Middleton, Reference Williams Middleton2013: 4). Remarkably, among the six distinct kinds of legitimacy that Zott and Huy (Reference Zott and Huy2007) suggest entrepreneurs need to shape perceptions (cognitive, personal, structural, consequential, dispositional and exchange legitimacy), there is no reference to legitimacy in relation to place. In addition, there is ‘limited understanding of how circumstances and practices are woven together, become important locally and influence how enterprise is valued’ (Parkinson, Howorth, & Southern, Reference Parkinson, Howorth and Southern2016: 2).
Significantly, for the newcomer, entrepreneurial legitimacy is mainly a process of acquiring legitimacy, as the individual is faced with promoting new activities in order to gain validity as an entrepreneur (Wry, Lounsbury, & Glynn, Reference Wry, Lounsbury and Glynn2011; Williams Middleton, Reference Williams Middleton2013). During the nascent phase of entrepreneurship, legitimacy is gained in relation to others via conforming, selecting and manipulating strategies, and through interactive dialogue with key stakeholders (Suchman, Reference Suchman1995) and a collective identity is legitimated in a kind of distributed way, through stories inside and outside emerging entities (Wry, Lounsbury, & Glynn, Reference Wry, Lounsbury and Glynn2011).
Fisher, Kuratko, Bloodgood, and Hornsby’s (Reference Fisher, Kuratko, Bloodgood and Hornsby2017) recent meta-analysis of new venture legitimation identifies a variety of things that an entrepreneur might do to enhance and manage the legitimacy of a new venture. Their resultant conceptual frameworks around legitimacy provide a theoretical base for intensifying and extending the research examining the strategic establishment and management of new venture legitimacy for entrepreneurial resource acquisition. But Fisher et al. do not address aspects of place or the dynamic and fluid nature of ascribed legitimacy. Significant gaps remain in our understanding of new venture legitimacy judgements – social assessments that reside in the eye of the beholder (Fisher et al., Reference Fisher, Kuratko, Bloodgood and Hornsby2017), and which differ across various new venture audiences.
To explore these dimensions of context we examine how an energetic and enthusiastic entrepreneur engaged with these dimensions of place and the consequences for practice and thus expected legitimacy.
Methods
Case study
A single exemplary case (Stake, Reference Stake1995) approach suited our objective (Pratt, Reference Pratt2009; Yin, Reference Yin2012) of conceptually and empirically relating entrepreneurial engagement and legitimacy with place. We investigate an entrepreneur’s engagement with StantonFootnote 1 , a struggling, New Zealand rural community. Once prosperous, industries had closed, leaving Stanton with little obvious potential and not much hope. Motorbike gangs, decayed buildings and dereliction were evident. Spatially, Stanton became more isolated. Located midway between two cities, the town offered few reasons for motorists to stop.
The tide turned when Sue opened new shops in Stanton’s main street. A wave of renewal rippled along the main street; buildings were painted, new shops opened their doors, baskets of flowers appeared, gardens were tended and even the public toilets were refurbished. Sue had seen opportunity where others saw dereliction; the availability of inexpensive property was a signal of possibilities and the unemployed represented future workers (Annibal, Liddle, & McElwee, Reference Annibal, Liddle and McElwee2013; Frankish et al., Reference Frankish, Roberts, Coad and Storey2014). Newcomer Sue’s enthusiasm and energy mobilised others to engage in redevelopment. Ostensibly fitting the profile of a ‘classical’ entrepreneur, Sue’s transformational presence and her high public profile through media adulation appeared to grant her entrepreneurial legitimacy (Akgün et al., Reference Akgün, Baycan-Levent, Nijkamp and Poot2011; Anderson & Warren, Reference Anderson and Warren2011; Wry, Lounsbury, & Glynn, Reference Wry, Lounsbury and Glynn2011; Williams Middleton, Reference Williams Middleton2013).
Data collection
Primary data were semi-structured interviews, augmented by observation and historical research. Media reports, business and government websites served as independent data sources and informed the interview design. Stanton’s history was familiar as one author had lived there some time ago and retained connections. Interviews consisted of focused discussions with 20 respondents. The 12 most conceptually rich and theoretically interesting of the initial 20 conversations developed into extended interviews to fully capture their experiences. Sampling was thus purposeful (Gartner & Birley, Reference Gartner and Birley2002; Pratt, Reference Pratt2009) in that respondents had the characteristics and positions thought most informed. The sample comprised Sue, other small business owners, hospitality establishment owners and an economic development manager. Some were identified through local knowledge or media reporting and our presence in town identified additional respondents. Interviewing was open-ended, allowing respondents’ views and voice. Respondents were later offered their interview transcripts to review. Informal observations and discussions, for example, conversations when buying coffee, lunch or browsing the shops, provided rich textural data about context and history (Geertz, Reference Geertz1973; McKelvey, Reference McKelvey2004; Jack, Reference Jack2005) helping build a full appreciation of the community.
For insider views, we interviewed two of Sue’s shop managers based in recently opened retail outlets in other towns. Initial analysis informed later interviews (Patton, Reference Patton2002) and researchers met to discuss experiences, forming an introspective record of field work, considering personal biases and feelings to understand their influence on the study (Emerson, Fretz, & Shaw, Reference Emerson, Fretz and Shaw1995).
Data analysis
In keeping with inductive case study research (Miles & Huberman, Reference Miles and Huberman1994), data analysis proceeded with first writing up notes, then synthesising and comparing the interview transcripts and field notes. One author, less familiar with Stanton, acted as a critical voice and interrogator of the other authors to question the validity of the case and emerging findings (Salvato & Corbetta, Reference Salvato and Corbetta2013) which are grounded in participants’ perspectives, using their representative quotes. Analysis followed the constant comparative method (Suddaby, Reference Suddaby2006; Fram, Reference Fram2013), iteratively comparing themes in the data and theory (Jack, Anderson, Drakopoulou Dodd, & Moult, Reference Jack, Anderson, Drakopoulou Dodd and Moult2015) informed by our theoretical framework.
Typical of small places, our principal respondents typically held multiple roles within the community (Table 1). For example, Julie owned a business and was also the Chair of the Stanton Progressive Association. Some had children in local schools and in three cases several generations of respondents’ families had resided in Stanton. Moreover, the purposive nature of the sample ensured that the primary focus in the interviews was on people who were connected with business or had some direct relationship with it. Additional, secondary, informants included a regional economist with expertise in depleted communities; a local photographer; a politician from a neighbouring region with a similar profile of depleted community; a new food shop-owner who arrived towards the end of the study; Council representatives with responsibilities for regional development; and an independent consultant with experience of regional development.
Principal respondents and detail of qualitative data collection
Place and entrepreneurial processes: the research in context
Stanton; situating entrepreneurship in context
Stanton is a rural township in the North Island of New Zealand. Early European/Pakeha settlers followed land sales and development of the railway in the 1880s. Flax milling, creating farmland, and dam building kept the town buoyant until the 1920s. After the Second World War, when many resettlement farms were awarded, Stanton became a service town for surrounding farms. Coupled with an upgraded State Highway through Stanton, this created economic well-being.
In the 1950s and 1960s many Māori settled in Stanton, working in local industry (in 2013, 42.8% of Stanton’s population reported Māori ethnicity compared with 14.9% nationally). Later, manufacturing collapsed, leaving just one surviving firm by 1987. In 2013 the foundry, the town’s largest employer, closed. Perhaps the lowest ebb was the mid-1990s, when Stanton became a home for motorcycle gangs associated with high levels of crime and substance abuse (Gilbert, Reference Gilbert2013). Eventually even the gangs moved on from Stanton – although the reputation of an isolated gangland lingered.
Today the main industries in Stanton (by employee number) are retail, education and training, and hospitality services. The railway remains; businesses cluster beside the tracks and on the nearby streets. The Information Centre, Railway Museum, library, and park are the civic presence and currently 1,239 people live in Stanton (Statistics New Zealand, 2014); 132 fewer (9.6%) than in 2006. There are 75 unoccupied houses and the unemployment rate is double the New Zealand average (14.8 vs. 7.1%). New Zealand’s Index of Socio-Economic Deprivation awarded Stanton its highest score of 10 (University of Otago, 2014) and its residents are older and less well educated than the New Zealand average. In 2013, 67 businesses were listed as operating in Stanton, 13% fewer than 2006 (Statistics New Zealand, 2014). It seems reasonable to argue that Stanton is a depleted place, characterised by apparently diminishing human and physical resources. Stanton had become an exemplar of failing market processes, but not terminally; the media credited one entrepreneur with arresting decline and bringing about a turnaround. The blog below describes the events:
In recent years, [Stanton] has undergone an unlikely retail revival. Thanks in no small part to a dynamic local woman, [Sue]. This entrepreneur, artist and mother of five saw the potential of all the through-traffic and put everything on the line to open a gallery/gift shop. Building on that success and opening more stores, other retailers have joined her and the local council has spruced the place up with gardens, picnic areas and some lovely public loos (‘Works Wonders’, n.d.).
Newcomer Sue’s engagement with place
Sue saw opportunity in Stanton. She and husband Kauri returned from travelling overseas and, in 2007, they renovated a derelict building and opened Sue’s first shop. Despite having no family or emotional ties to the town, Sue chose Stanton because it fitted her list of requirements for a suitable place to locate her first business: ‘[It must] have a main thoroughfare. It’s got to have a certain amount of people. It’s got to have a Four Square [small supermarket]’. Furthermore: ‘It’s got to have a petrol station. It’s got to be 20 minutes from a major city … it’s also got to have a lot of traffic go through; 18,000 cars a day, or something crazy’.
Clearly, Sue was not drawn to Stanton by any personal or historical affinity for the town itself. However, she notes now that she likes it because ‘it’s really easy to get a network here’ and ‘when you need advice, you’ve got people who are happy to help and ask … people are always happy to give the information’.
Sue added three more stores selling giftware and her own brand of clothing. She is very proud of her achievements, ‘creating so many jobs, a staunch following of women who love the brand’ (Moore, Reference Moore2015: 11). Sue now has retail stores and a gallery in Stanton and stores in three other New Zealand towns. She also runs a manufacturing business, an online retail operation and property investments, employing six in her manufacturing business and 38 in the retail stores.
Demonstrating successful start-up, creative flair and a vision for growth, Sue fits an entrepreneurial model (De Clercq & Voronov, Reference De Clercq and Voronov2009). Sue and Stanton thus provide an exemplary case (de San Eugenio-Vela & Barniol-Carcasona, Reference de San Eugenio-Vela and Barniol-Carcasona2015) for investigating the role of place in entrepreneurship and local development. We chose to sacrifice breadth of analysis in favour of intense concentration on a single remarkable case. The examination of one entrepreneur, whose influence literally changed the face of a small rural town, facilitates a valuable insight into how legitimacy and embeddedness interact with entrepreneurial endeavour. Further, the case reflects a broader context (New Zealand) not extensively represented in existing entrepreneurship literature.
Findings: place and entrepreneurial processes in stanton
Sue was a big presence in town, dramatically profiled by townspeople, stakeholders such as the Council and the national media as an entrepreneurial hero (Perren & Dannreuther, Reference Perren and Dannreuther2013). Stanton was depicted in economic terms; economically struggling, emptied out and likely to atrophy and deteriorate. Rejuvenation by Sue’s entrepreneurial effort was presented by the media, some locals and by regional stakeholders as arresting decline, shifting Stanton into forward gear towards new economic horizons. Sue’s story retells the entrepreneurial legend (Smith & Anderson, Reference Smith and Anderson2004) grounded and enhanced by locating it in run down Stanton; portraying a local hero and a strong narrative of place-based culture quickly became evident. Yet, alongside eulogies of Sue’s entrepreneurial success in the rejuvenation of Stanton, sat narratives of social conflict (Hudson, Reference Hudson2001). For instance, clumsy efforts by Sue to regain legitimacy through symbolic means (Zott & Huy, Reference Zott and Huy2007) can further lead to its depletion given the loss of credibility by entrepreneurs (Garud, Schildt, & Lant, Reference Garud, Schildt and Lant2014).
Becoming established
Relationships between entrepreneurship and place are forged by discursive as well as material practices (Steyaert & Katz, Reference Steyaert and Katz2004; Dodd, Reference Dodd2014). The emergent entrepreneurial narrative endorses what Sue is doing for Stanton. Entrepreneurship is thus legitimised as a place-based practice:
If she’s not a candidate for business woman (or man, for that matter!) of the year, I don’t know who should be. Stanton’s pretty lucky to have her … This woman has turned the town around. Since she swept in, other stores and cafes have opened and Stanton is definitely worth pulling over and turning the ignition off rather than scooting on by (‘Shopping at large’, n.d.).
In less positive narratives, place takes precedence over entrepreneurial process. Credit is allocated to place rather than person, intertwined with another theme, the entrepreneur’s hubris; it was not Sue alone that drove change, but she alone claimed the credit. Sue was also criticised for her lack of commitment to their place, Stanton itself. These narratives undermine her entrepreneurial legitimacy as local change maker. Interviews clearly illustrate this; but first Sue’s perspective.
Sue had grand ambitions, not just for herself but for Stanton: ‘It was a mission to change peoples’ perception and turn it into a destination town’. She was aware that not everyone shared her confidence that change was possible: ‘Everyone laughed at me. They said everyone’s tried to make this town work. You’re mad. You’ll need an axe under the counter’. And Sue perceived some scepticism: ‘Everyone watched to see if we would fall over, “cause when we did the first shop”, they said “Oh that’s not going to work. Gosh you’re mad”’.
Place was instrumentally important for Sue’s business, so Stanton had to be made a more appealing place to stop: ‘We started by beautifying Stanton and making it a place where people would want to stop and shop’. However, Sue also recognised that place was a nexus of relationships: ‘I sat down with [the mayor] and his CEO and said “Right boys, I want to change this town”’.
Sue worked these relations to mobilise others and described the improvements:
They’ll [visitors] see the hanging baskets. They’ll see the paving being done on the footpath. They’ll notice all the planting; we’ve done massive amounts of planting. They’ll see the parks are being looked after. The rubbish bins are emptied. And that’s all of the stuff from me just getting amongst the Council.
Extending and mobilising others was noticeable; Sue was a role model, but place centred: ‘Once we started our shops people sat back and watched us for a year and then they started filling the other shops up’. Others arrived and opened stores, including three of Sue’s staff members: ‘So definitely people see what you’re doing; think “Oh she’s doing well”. Makes them think “I can do that”’ and perhaps brought her legitimacy also – at least in her mind.
Sue’s enactment of the entrepreneurial narrative was, in practice terms, a close engagement with rural place offering local development: ‘It was awesome starting in a little town, to start getting known. Because if I had just put my shop in the middle of [city], I wouldn’t have been noticed’. Seeing an example of what could be done in Stanton and responding to the wider appeal of an entrepreneurial narrative, others were also affected.
Gaining legitimacy and entrepreneurial effects on place
Sue’s impact on Stanton was praised by Sean from the Regional Council:
I think there’s a bit of pride in the community that’s sort of developed as well around the town, and that’s big in terms of supporting its transformation. Yeah, if we could get a few more of those retailers in there I think things would really start to happen.
Jane, the realtor with extensive experience over many years in the town, noted that ‘I certainly think it’s improved a lot’. A number of the local business owners remarked on how energy had synergistically rippled across the town. Long-term resident Rees noted the positive influence on a more civic-oriented endeavour, the Railway Visitor Centre:
He [City Council executive] told me ‘Whatever you’re doing, Stanton’s looking absolutely amazing’. You know and it’s just going amazing. Everybody’s got behind what Julie’s done with the Railway Station, and being the Councillor you hear it from everybody. Everybody’s got a new, fresh pride in the place …
Adrian, a café owner, commented:
And then Sue came, and there were a few of us. And from then on others were attracted to the space thinking there was a bit of a spin-off here. Buses are actually stopping here now. People are actually making it a destination for a day out.
Publican Ben, proffered more examples of beneficial entrepreneurial contagion:
[Sue’s] got a vision to have shops all over the place. What do you call it, entrepreneurship? We’ve got two guys up here that live in my flat, and they’ve got a shop down the road here, and they’re very, very motivated people … they’re into similar stuff that Sue sells over there you know. And then we’ve got another shop this side; one of my bar managers, she’s sort of gone in shares with the woman down there, doing similar stuff. So they are all trying retail.
Julie, a business owner and also chair of the local business association, was emphatic: ‘Where somebody stands up and makes a scene, makes a splash, something new opening and gosh it’s good for everybody’.
Progress or simply [self] promotion? An alternative view
In the face of apparent widespread support, strong dissenting counter narratives moderated the recognition of Sue as entrepreneur and animateur of place (Annibal, Liddle, & McElwee, Reference Annibal, Liddle and McElwee2013). Counter narratives took three (somewhat overlapping) forms, and, for all, place was significant: one challenged the significance of Sue’s efforts for Stanton; one was about Sue’s commitment to the place itself; and another related to the lack of acknowledgement of existing business people. For instance, one respondent pointed out: ‘Sue came along; she’s good. But she’s not the only one. There’s 18 shops opened up that were closed, so Sue opened three, but the rest of the people are just as passionate as Sue is you know’. Furthermore, ‘We were ahead of Sue … We were ahead of her. So we were the first place really to repaint, revamp and start what was happening’.
Voices that challenged the dominant narrative around Sue included Rees and Gray. Rees, for example, liked things as they had been: ‘There is a very fine line on changing it into a suburb, or leaving it as a village you know’. And when we first approached Gray for an interview he overtly presented his nonacceptance of the dominant narrative:
I do not want to waste your time if you are looking for a positive outcome of rural communities appearing to be prospering as a result of small businesses taking some initiative, breathing some life back into the small communities.
Such views demonstrate that legitimacy in terms of open acceptance of the entrepreneurial narrative was not hegemonic. Gray felt that Sue’s influence had peaked, describing Stanton as ‘looking sad and tired’ and singling one shop owner out for comment: ‘I mean, he hasn’t even cleaned it. It’s been empty and looking derelict for two years now and there’s bird shit all over it’. Interestingly, Gray has since closed his business and left Stanton.
In some cases, credit was only grudgingly attributed to Sue. For example, in the quote below, Joy illustrates the view that promotion and development of place is legitimate, but claiming entrepreneurial credit is not: ‘Sue gets a lot of publicity … I mean her customers are different to my customers, so it hasn’t made huge differences to me … but the other people that are sort of doing similar type things’.
The theme of Sue’s authentic commitment to, and continuing presence in, place perhaps reflects disillusionment from historic experiences of uneven development, when incoming entrepreneurs and their capital had moved on: ‘Stanton was her little baby from the start of her empire. But now she’s everywhere. I rarely see her now … She just has her shops basically managed by staff now. It’s very rare that you see her. She’s all over the country with her other things she does … She used to be in town every day’. Now he expresses his concern: ‘I don’t know how passionate she still is about Stanton’.
One of the newer business owners disdainfully referred to Sue as ‘Her Ladyship’: ‘She’s given up here … she’s given up on this [Stanton]; she’s completely ego-driven and egocentric and if her ego’s not getting stroked she’s not interested, you know, she’s focused on … her other stores’.
The entrepreneurial narrative also soured when perceptions about ongoing commitment to Stanton were considered: ‘Initially she’s been really significant, in terms of setting it up and that transformation, but in terms of ongoing, it hasn’t continued to grow’. Sean was concerned here about commitment: ‘I mean, she’s an anchor, and you know probably the key to the Stanton retail environment to be fair’.
Sue recognised that legitimacy had to be earned and had anticipated different reactions to entrepreneurial changes to place. She detected some opposition, but those people just did not see the benefits clearly: ‘There was resentment, because they thought I would be taking their customers, they don’t see that you bring more’.
When I first got here, no one knew who we were and they were like ‘who’s this girl changing everything, what the hell is she doing?’ And I got absolute shit for that, basically. I was in tears probably every second day … ‘cause no one wants change’.
Sue found that as a newcomer, change maker, her legitimacy was questioned, and she had experienced reactions that questioned who she was and what she did: ‘“Who is this girl thinking she is all that and trying to change our town and she’s not even from here?”’. Sue recognised that she had ‘pissed people off along the way’:
I was bringing in all new. They had like old books and old antiquey things in a couple of the shops, so they didn’t enjoy this new way of coming in….I guess because they liked it being their quiet little town and the customers were just for them. They didn’t realise that I would be bringing more customers that would go into all of our shops.
Her experiences led to Sue developing a relationship strategy that displayed her legitimacy:
It’s little town rules. So you’ve got to get in there, get amongst it, pay it forward, then you are pretty well accepted … So it’s just about getting amongst the town … things like that. And the word gets around and then you’re really well looked after. So that’s the thing in a small community. Any small community you go into, you’ve got to pay it forward … so you just can’t go in and expect it to work without paying it forward.
Discussion
Entrepreneurial legitimacy, engagement and place
We observe four different factors in play here: Sue; the media; ‘pro Sue’ locals; and ‘anti-Sue’ locals. We see how external attention to Sue’s success seems to diminish the contribution of existing enterprises, so that ‘new’ is portrayed as ‘better’. And such attention brings to the fore the tension between community values, which are bound to place, and entrepreneurial values that are shaped by economic values (Huggins & Thompson, Reference Huggins and Thompson2015). Our case thus reinforces the notion that entrepreneurial processes are shaped by region-specific factors, which are to a large extent determined by history and social networks (Fritsch & Storey, Reference Fritsch and Storey2014). In sum, in mapping interactions between Sue and Stanton, we can contrast the dominant economic logic of Sue’s entrepreneurial success with narratives of local spatial resistance and legitimacy.
We have responded to De Clercq and Voronov’s (Reference De Clercq and Voronov2009) call for conceptual extensions where attention is devoted to newcomer entrepreneurs’ activities beyond the entry phase and to consider how the nature and success of their day-to-day activities facilitate or prevent them from maintaining their legitimacy in the eyes of other field participants. Our case demonstrates how ties to place, embeddedness (Jack & Anderson, Reference Jack and Anderson2002), became increasingly important (McKeever, Anderson, & Jack, Reference McKeever, Anderson and Jack2014) to Sue’s legitimacy as entrepreneur, reinforcing that place is more than simply an economic site for entrepreneurship. We demonstrate that ties can be economic or social or both economic and social. Sue’s dominant interpretation of Stanton is as an economic place: that she is ‘in a place’ rather than truly becoming ‘of a place’ is a key point in our theory building.
Our analysis shows how context is created from different meanings and understandings of place with which Sue (or any other entrepreneur) must engage. Entrepreneurial legitimacy was ascribed and applauded when Sue’s efforts were seen as being for place, but withheld when place was seen as less central and, in this case, when the individual entrepreneur seemed to accept her media characterisation as hero and saviour (‘other’).
As a newcomer entrepreneur, Sue initially worked hard to position herself within the community, to engage the local population through integration and interaction rather than being perceived as simply moving into town and directing activities (Akgün et al., Reference Akgün, Baycan-Levent, Nijkamp and Poot2011). However, an external influence intervened in the form of the national media, with items featured through radio, television, magazines and newspapers. Sue’s obvious pride in her high media profile set her apart. This in turn appears to have triggered resentment among Stanton’s residents as their own efforts were seemingly discounted or overlooked. This tension between celebrating success for the entrepreneur and acknowledging the community’s input and values is an important consideration. The sense of ownership of place and of entrepreneurship in this place was a hindrance that confronted Sue’s change-making. Moreover, Sue’s legitimacy diminished when she was perceived to be unwilling to acknowledge the contributions of others and to have mentally moved on from Stanton. Her media-portrayal granted legitimacy yet that portrayal was not universally accepted.
Local entrepreneurial legitimacy for a newcomer is enhanced if they are perceived as working for place, rather than using it. Attention to place, in terms of connection, spatial affection and embracing the local norms, values and informal institutional framework – being embedded, seems important. Economic engagement, even economic embeddedness, may be interpreted as superficial, tipping the balance towards the entrepreneur being regarded as economic interloper – a user of local resources while playing to the gallery of regional development and a personal agenda of their own business expansion. Place thus operates as an informal institution where local culture, norms, expectations and values are all embedded in place. Seen in this way, entrepreneurial milieu is created from aspects of place that in turn affect, and are affected by, the entrepreneurial aspects of legitimacy, connection, engagement and local perspectives. Struggling Stanton offered a particular opportunity for Sue’s entrepreneurial imagination, but Sue was not part of Stanton’s history; indeed, later she saw other towns as offering correspondingly positive contexts for entrepreneurship. Lacking a deeply rooted historical attachment to Stanton, Sue moved on and took advantage of other spatial economic opportunities (Huggins & Thompson, Reference Huggins and Thompson2015).
Conceptually, we argue that narratives, and also the legitimacy of entrepreneurship, are founded in a place-based understanding of the world. There was a history derived through place that gave meanings to development in Stanton. Place held the physical resources for entrepreneurship, and Sue’s entrepreneurship developed these resources (Benneworth, Reference Benneworth2004). But it was evident how place-based ‘imagined’ community – belonging to the socially constructed sense of place, configured responses to development. For Sue, for Councillors and for some other businesses, the imagined economic Stanton bustled with visitors enjoying the place. Others were reluctant to trade-off, or to lose, what they knew and that to which they had become accustomed, or (at least) not without some acknowledgement of their own contributions to the renewal. These others had strong ownership of place – it was their Stanton, not Sue’s, to use or develop. Sue’s ‘right’, the legitimacy to make changes, to use Stanton, was challenged because she was a newcomer and did not ‘belong’ to Stanton. Further, Sue saw opportunity in Stanton because she essentially viewed it in deficit terms – it represented a problem to be addressed. She saw opportunities for self; she saw what was missing. Sue failed to see what was there already, and therefore missed some aspects that would have an impact on entrepreneurial legitimacy – hers and the existing local business owners whose own legitimacy had been challenged.
Locality, place and history emerge as important resources in the rural context for agency and opportunity (Berglund, Gaddefors, & Lindgren, Reference Berglund, Gaddefors and Lindgren2016). Place is, and also represents, the locus of these resources. As Wry, Lounsbury, and Glynn (Reference Wry, Lounsbury and Glynn2011) suggested, success is most likely when all the stories, inside and outside the emergent entity align. Discordant notes can detract and possibly detract from success. In our case, we show that discordant notes occur because of inattention to place, which compromise legitimacy. Both physical and emotional resources reside in place and change presents a challenge. Urry summarises this:
it is part of the culture of those living in a given geographical area that there is a distinction drawn between those who are local, ‘people like us’, and those who are non-local, ‘outsiders’, ‘offcomers’, etc. This binary opposition may be set up and reproduced in a variety of ways, relating to people’s very sense of belonging to a given community (Reference Urry1995: 73).
It is not, however, simply physical place or the disembodied values of place, but social networks that comprise and embed the social as context. Consequently, the dualistic ‘we’ and ‘other’ can be conceptually extended to include the unequal distribution of credit for creating change and hence legitimacy.
Sue is a newcomer but, perhaps more importantly, she is different in that she is, ‘not like us’. Some admire her practices and are willing to engage (Akgün et al., Reference Akgün, Baycan-Levent, Nijkamp and Poot2011), but others seem uncomfortable with change to the established order. In Sue’s words: ‘who’s this girl changing everything, what the hell is she doing?’.
Conclusions: place considerations for entrepreneurship theory
Policy makers and researchers are typically most interested in the economics of entrepreneurial interactions because of the importance of economic outcomes and local development. But ‘place’ is a configuration that forms the social context for entrepreneuring. Less tangible than physical context, less amenable to change, the social context operates as a manifestation of local values. Just as the physical infrastructure is a product of industrial history, the social history of place frames how change will be received.
Any account of entrepreneurship that neglects the nuances of place will not be complete. Consistent with previous studies, ours has demonstrated that entrepreneurial revival is not merely economic renewal, but a complex engagement with multifaceted dimensions of place. Community change is less likely to occur without the recognised, combined and cooperative engagement of whole networks of people. The socio-economic processes of embedding require recognition of the values of place. Places that were once vibrant might become caught up in a process of decay and so become targets for entrepreneurial development, yet their histories and cultures remain intact. A sense of place, of belonging, informs how residents experience and understand their place and how they respond to change.
Entrepreneurial legitimacy and place: A negotiated concept
A key element of our exploration of the role of place was to examine how legitimacy was conferred on entrepreneurial practices and individuals. By way of an exemplary case, we highlighted important interactions, views and tensions. Since legitimacy is relevant to all business people, consideration of an individual entrepreneur’s legitimacy in a small town does not occur apart from the legitimacy concerns of others. In Stanton, the newcomer’s entrepreneurial practices, welcomed by many, were perceived by others as a threat to their own entrepreneurial legitimacy. We were able to explain the differences by referring to the values of place held by the inhabitants as stakeholders of place. The revival of economic values led some to venerate the newcomer entrepreneur’s work; however, the challenge of changes to ‘their’ place, especially by an outsider, led others to denigrate the same work.
But how did this come about? Importantly this story of Stanton revealed how external forces (in this case, the national media) served to amplify the notion of the newcomer entrepreneur as ‘other’, an outsider. In turn the entrepreneur bought into the entrepreneurial story of herself as hero and alienated a section of the [business] population. Thus, we have added to conceptions of entrepreneurship theory and place with respect to the ascribing and withholding of legitimacy: in highlighting legitimacy as dynamic and complex, we also exposed its fragility.
Our analysis reinforces assertions that legitimacy is not a finite bundle of attributes related to economics and place. It is a delicate balance of ego, social and economic factors. Embeddedness and legitimacy as portrayed through the media message of economic success and rejuvenation amplified the entrepreneur’s sense of success, fed short-term economic success, reinforced her own sense of ‘saving’ the community, and simultaneously served to undermine and devalue previous and on-going efforts of some more embedded locals. Entrepreneurial legitimacy is, in short, a fluid, negotiated concept.
Legitimacy, commitment, belonging and embeddedness
We have emphasised interaction as the entrepreneurial process, endorsing others’ claims that entrepreneuring involves connecting to place. It seems that some interactions may be concurrently valued as economic and implicitly challenged as at odds with the cultural values rooted in place. These values surface in the sentiments of belonging to place. Belonging is both identity and ownership in the sense that the attachment to place implicates an emotive stakeholding in place. Approval of the entrepreneur’s practice was challenged on the basis that she was perceived by locals to have failed to demonstrate this emotional commitment to place, to their place. So, belonging to place brings with it both privileges of place and obligations to place.
Amplification of legitimacy concerns and the impact of ‘otherness’
Our analysis also offers theoretical propositions for understanding the sometimes contradictory role of place in entrepreneurial engagement. The case makes it apparent that the more accolades that the entrepreneur gained, the more that she became something ‘other’ or ‘not of the town’. In highlighting an individual’s economic success and the change being driven by her activity, media attention accentuated her difference. Members of the depleted community the entrepreneur sought to utilise and engage were in fact distanced by the contrast evoked through her relative success; these seemed to imply deficiencies in their own legitimacy.
The case of Stanton shows that external factors can contribute to a complex intrusion into place, affecting economic and social legitimacy for both the newcomer entrepreneur and other businesspeople. There was a fine line between the media gaze creating beneficial ‘promotion’ of Stanton business in general and the fuelling of a perception of this being self-promotion of one entrepreneur, seemingly at the expense of others. We saw how the contributions, prior efforts and legitimacy of embedded local business people were, by inference, compromised as media played up one individual’s impact and success. The entrepreneur’s own response to media attention further distanced her from the business community. The conclusion must be that the community entrepreneur as solo hero is less likely to succeed over time. It is not simply the short-term ‘social validation’ that is important; but also ongoing social engagement in a larger sense that creates embeddedness in place.
Economic and social validation and place
Thus, we propose that the economic dimensions of place shape what is technically possible, but the cultural dimensions shape what is socially desirable. Our practical contribution lies in demonstrating that entrepreneurial enactment, using and applying, the physical properties of place, flow through socialised channels. Unique configurations of people, property and history that constitute a place are exceptional in space and in time – well-embedded entrepreneurs are likely to be more cognisant of how these channels work. Accordingly, entrepreneurs must be open to the nuances of place that will otherwise impede the success of their ventures.
Place matters for entrepreneurship just as entrepreneurship matters for places.
Acknowledgements
The authors thank Dr. Antoine Hermens Associate Editor, Journal of Management & Organization and two anonymous Reviewers for insightful comments and suggestions through the review process. The authors also thank our interviewees in New Zealand and Dr. Robyn Walker for formative comments on earlier drafts.
