Entrepreneurs’ Prospective Sensemaking: Path of a Magical Realist by Maxim Ganzin A thesis submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Strategic Management and Organization Faculty of Business University of Alberta © Maxim Ganzin, 2019 Abstract This dissertation seeks to explore how entrepreneurs engage in prospective sensemaking and what role their arational beliefs play in it. I investigate the implications of prospective sensemaking on opportunity identification and risk management. While the current literature on entrepreneurship focuses on strategic approaches to understanding entrepreneurial behavior, I loosen the focus on strategy and also give attention to the role of spirituality, enchantment and magic that exist as an organizational phenomenon in counterpoint to the often over articulated economically rational views within modern organizations. I draw on the concept of magical realism as part of the research study and suggest that a magical realist perception of reality or magical realist cognitive orientation exists among entrepreneurs. I am looking into experiences of arational phenomena by entrepreneurs or their arational beliefs, and the way the arational and rational aspects of life are reconciled in the building and enacting of successful futures. My focal research question asks: how do entrepreneurs use a magical realist perception in future oriented sensemaking? And more specifically, in Study 1, how do different temporal orientations in sensemaking affect entrepreneurs’ perception of risk and uncertainty? And in Study 2, how does future-oriented sensemaking draw upon spirituality to mitigate risk, reduce uncertainty and inspire the confidence of external stakeholders in the absence of a rational historical context? In an attempt to answer these question I conduct a thematic analysis of 30 business biographies (Study 1) and of 40 semi-structured interviews collected from entrepreneurs located mainly in Edmonton, Alberta (Study 2). The findings reveal that entrepreneurs use their magical realist perception to project successful futures for their companies. A magical realist perception helps them to deal with risk and uncertainty within the volatile world of start-up ii business. They are able to find inner peace, construct safe future, and most importantly, keep on going despite difficulties and setbacks. This research makes three significant contributions to organizational theory. First, it shows that in the absence of past successes and proved organizational practices, entrepreneurs can use a magical realist perception and draw on arational beliefs and experiences to construct a triumphant future. Second, a magical realist perception helps entrepreneurs to cope with anxiety and insecurity associated with risk and uncertainty. Third, entrepreneurs with a magical realist perception create such perception through deep integration of their spirituality and religious belief into their work life. Thus, the rational and arational spheres of life become indistinguishable for them. iii Preface The research project, of which this thesis is a part, received research ethics approval from the University of Alberta Research Ethics Board, under the Project “Organizational Magical Realism in Young Entrepreneurial Firms”, No. Pro00055734, approved March 17, 2015. Chapter 5 as well as parts of Chapter 2 and Chapter 3 of this thesis has been accepted for publication as Ganzin, M., Islam, G., Suddaby, R. (forthcoming) Spirituality and Entrepreneurship: the Role of Magical Thinking in Future-Oriented Sensemaking. Accepted for publication at Organization Studies. I was responsible for the data collection and analysis as well as the manuscript composition. Dr. G. Islam contributed to manuscript edits. Dr. R. Suddaby was the supervisory author and was involved with concept formation and manuscript composition. iv Acknowledgments I am deeply grateful to my supervisors – Professor Roy Suddaby, Professor William Foster, and Professor Patricia Reay – for the unconditional support, continuous encouragement and countless precious learning opportunities they have given me during my journey in the PhD program. v Table of Contents Chapter I Introduction ..................................................................................................................... 1 Theoretical Significance of the Research .................................................................................... 7 Practical Significance of Research ............................................................................................ 10 Definitions ................................................................................................................................. 10 Structure of the Dissertation ...................................................................................................... 12 Chapter II Theory .......................................................................................................................... 15 Literature Review ...................................................................................................................... 15 Theoretical Framework ............................................................................................................. 30 The role of magical realism in prospective sensemaking ......................................................... 51 Research Questions ................................................................................................................... 52 Chapter III Methods ...................................................................................................................... 54 Data Analysis ............................................................................................................................ 71 Chapter IV Findings (Study 1) ...................................................................................................... 80 Chapter V Findings (Study 2) ..................................................................................................... 104 Chapter VI Discussion and Conclusion ...................................................................................... 132 Discussion ............................................................................................................................... 132 Limitations .............................................................................................................................. 148 Implications for Future Research ............................................................................................ 151 Implications for Practitioners .................................................................................................. 157 Conclusion ............................................................................................................................... 159 References ................................................................................................................................... 161 vi List of Tables Table 1: Tenets of Organizational Magical Realism Table 2: List of Biographies Table 3: Participant Description Table 4: Summary of Sensemaking Tools by Temporal Orientation Table 5: Summary of the Attributes of Magical Realist Entrepreneurial Cognition List of Figures Figure 1: Data Structure Study 1 Figure 2: Data Structure Study 2 Figure 3: Mechanism of Coping vii Chapter I Introduction To better understand the implications of spirituality in organizational settings researchers have employed the concept of sensemaking. McKee, Helms Mills and Driscoll (2008) used sensemaking to understand the process of institutionalizing workplace spirituality, Lips-Wiersma (2001) found that spirituality influences career behavior, Pratt (2000) studied how spirituality creates the context for organizational members’ sensemaking, and Izak (2009) warned of the dangers of introducing spirituality to an organizational context. Sensemaking is often seen as a retrospective activity (Weick, 1995), however, organization scholars have been exploring the prospective or future-oriented sensemaking (Gioia & Mehra, 1996; Gephart, Topal, & Zhang, 2010). In this study I argue that entrepreneurs with perceptions of the world that are influenced by their spiritual beliefs, or, more broadly, arational (neither rational nor irrational; not within the domain of the rules of reason) beliefs, use these beliefs to project a positive, successful, and safe future. The very essence of entrepreneurial activity is based on a future-oriented outlook (Bird, 1988; Rosen, 2016). However, although sensemaking scholars recognize the importance of prospective sensemaking in entrepreneurial contexts (Hill & Levenhagen, 1995; Cornelissen & Clarke, 2010), we still know little of how entrepreneurs imagine and project the future during sensemaking activity. Students of prospective sensemaking have inquired about organizational change (Gioia, Thomas, Clark & Chittipeddi, 1994), institutional legitimation (Gephart et al., 2010), material practices (Stigliani & Ravasi, 2012), and strategy making (Kaplan & Orlikowski, 2013). Yet, we lack understanding of the role of beliefs, especially those linked to spirituality, religious faith, and mythical and magical thinking, in future-oriented sensemaking. This is an 1 important question to explore, especially because all sensemaking is based on the beliefs that people have (Weick, 1995: 133ff; Sandberg & Tsoukas, 2015: 9). In this