Jump Starting Entrepreneurship: How laid-off employees made a career transition

TY - CONF

T1 - Jump Starting Entrepreneurship

T2 - Academy of Management

AU - Burcharth, Ana

AU - Smith, Pernille

AU - Frederiksen, Lars

PY - 2017/8/7

Y1 - 2017/8/7

N2 - How do laid-off employees become entrepreneurs after receiving a dream start into self-employment? This question is relevant for policy makers and entrepreneurship researchers alike since it raises the possibility of a reverse entrepreneurial opportunity, in which the chance of becoming an entrepreneur emerges before the discovery of a profitable opportunity. We empirically examine this question on the unique setting of a corporate entrepreneurship program. In the midst of a corporate crisis, Nokia supported laid-off employees to start their own ventures under favorable conditions. We investigate the transition from wage earners to entrepreneurs with focus on the psychological underpinnings. Drawing on the literature on organizational death, closure and job loss, we identify three archetypal patterns of transition to self-employment: 1) the “born entrepreneurs”, 2) the “low-hanging opportunity seeking entrepreneurs”, and 3) the “jump-start entrepreneurs”. Whereas the two first categories could be expected, the third one shows that, despite hesitance to be self-employed, being uneasy with it, risk adverse and having strong identification to the previous organization, these entrepreneurs persevered in their endeavors and eventually became comfortable with their new career prospects. We discuss the psychological factors that impact career transition after organizational closure and theorize weather they encourage or discourage entrepreneurship.

AB - How do laid-off employees become entrepreneurs after receiving a dream start into self-employment? This question is relevant for policy makers and entrepreneurship researchers alike since it raises the possibility of a reverse entrepreneurial opportunity, in which the chance of becoming an entrepreneur emerges before the discovery of a profitable opportunity. We empirically examine this question on the unique setting of a corporate entrepreneurship program. In the midst of a corporate crisis, Nokia supported laid-off employees to start their own ventures under favorable conditions. We investigate the transition from wage earners to entrepreneurs with focus on the psychological underpinnings. Drawing on the literature on organizational death, closure and job loss, we identify three archetypal patterns of transition to self-employment: 1) the “born entrepreneurs”, 2) the “low-hanging opportunity seeking entrepreneurs”, and 3) the “jump-start entrepreneurs”. Whereas the two first categories could be expected, the third one shows that, despite hesitance to be self-employed, being uneasy with it, risk adverse and having strong identification to the previous organization, these entrepreneurs persevered in their endeavors and eventually became comfortable with their new career prospects. We discuss the psychological factors that impact career transition after organizational closure and theorize weather they encourage or discourage entrepreneurship.

KW - Entrepreneurship

KW - Career transition

KW - organizational closure

KW - Nokia

M3 - Paper

Y2 - 4 August 2017 through 8 August 2017

ER -