Nobody Pivots Alone: Social Resources and Strategic Change in Entrepreneurial Start-ups during the Covid-19 Pandemic

Obukhova, Elena | $23,769

Quebec McGill University 2021 SSHRC

Pivoting, or “structural course correction” (Ries, 2011), is a key to successful entrepreneurship, yet the scholarly understanding of pivoting is only nascent. Performance feedback theory, the dominant theoretical framework for understanding organizational change in management research, primarily focuses on strategic change in large-scale well-established firms and is less applicable to understanding strategic change in entrepreneurial settings.

To enhance our understanding of strategic change in entrepreneurial firms, we will conduct an inductive qualitative study of how entrepreneurs use social resources to pivot during the Covid-19 pandemic. We draw on the social embeddedness perspective (Granovetter 1974; Burt 1992) that highlights how social capital – that is, information, trust and other resources an actor can access through their social networks – shapes economic outcomes. Accordingly, through a longitudinal inductive study of Montreal-based start-ups, we will seek to answer the following research questions:

1. What role do social resources play in helping entrepreneurs engage in sense making in an environment of uncertainty?

2. How do entrepreneurs leverage their social resources to enact resource reallocation involved in pivoting?

Our study will adopt a longitudinal case study approach (Eisenhardt 1989; Yin 1994): we will follow 14 start-ups across a variety of sectors over two-years to examine their strategy formulation process during the Covid-19 pandemic and its aftermath. The pandemic has dramatically altered the strategic landscape for entrepreneurial firms, creating a unique opportunity to observe in real-time how entrepreneurs leverage their social resources to make strategic decisions, like pivoting.

Taking an inductive qualitative approach, we will conduct open-ended interviews with founders and others involved in making and implementing pivoting decisions (such as mentors, investors and key employees). The key to our approach is to focus on decision-points at which entrepreneurs considered pivoting and explore what type of social resources entrepreneurs drew on at this point. We have secured research access to 14 Montreal-based start-ups with previous affiliation to McGill University’s Dobson Center for Entrepreneurship. To establish a baseline and understand start-ups’ state at the very start of the pandemic, we interviewed founders right after the onset of the first lock-down in Spring 2020. To examine how strategy evolves over time, we will conduct two new waves of interviews: one year (2021) and two years (2022) after the initial lock-down. We will use an inductive theme-development approach to analyze these qualitative data (Charmaz, 2006; Gioia, Corley & Hamilton 2012).

Our study will make two original contributions to both academic and non-academic audiences. Most importantly, by adopting an embeddedness perspective to explore entrepreneurial pivoting, our study enhances organizational scholars’ understanding of strategic change in entrepreneurial firms, which to date has been largely underexplored. Our findings will also contribute to the social networks literature by revealing how social resources shape opportunity recognition and resource allocations, especially as they relate to pivoting.

Furthermore, our study will make important contributions for non-academic audiences. We will develop new ways to teach the subject of pivoting in entrepreneurship curricula. In addition, our research results will be able to inform policy interventions aimed at enhancing entrepreneurial resilience, for instance, the design of social support systems for entrepreneurs, and in particular for entrepreneurs who are most likely to encounter a lack of social resources, such as women and racialized minorities.

With funding from the Government of Canada

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