STATUS DRIVEN STRATEGY DIVERGENCES: AN ANALYSIS OF THE EFFECT OF STRATIFICATION AS AN ENVIRONMENTAL CONTEXT ON ENTREPRENEURIAL STRATEGY By Patrice Perry-Rivers A dissertation presented to the faculty of Rutgers Business School Department of Management and Global Business Rutgers, the State University of New Jersey in partial fulfillment of requirements for the degree of Doctor of Philosophy in Organization Management Written under the direction of Professors Jerome Williams and dt ogilvie and approved by _______________________________________ Dr. Jerome D. Williams _______________________________________ Dr. dt ogilvie _______________________________________ Dr. Jeffrey A. Robinson _______________________________________ Dr. G. Thomas Lumpkin Newark, New Jersey October, 2013 STATUS DRIVEN STRATEGY DIVERGENCES: AN ANALYSIS OF THE EFFECT OF STRATIFICATION AS AN ENVIRONMENTAL CONTEXT ON ENTREPRENEURIAL STRATEGY By Patrice Perry-Rivers A dissertation presented to the faculty of Rutgers Business School Department of Management and Global Business Rutgers, the State University of New Jersey in partial fulfillment of requirements for the degree of Doctor of Philosophy in Organization Management © Patrice Perry-Rivers, 2013 ABSTRACT OF THE DISSERTATION This dissertation examines the implemented strategy differences between entrepreneurial actors with different status positions embedded in socially stratified environmental contexts. Using a three study-model, I empirically examine my theory that groups of actors embedded within the same context but holding different status positions within it will develop different organizational identities and engage in divergent entrepreneurial strategies based on their differential access to resources for their entrepreneurial ventures. I find that differences are evident in the implementation of strategic actions between groups of enterprises primarily composed of actors with divergent status positions. These differences are manifest in their primary entrepreneurship types, value creation emphases (social or economic), and social interest orientations, as demonstrated in study one; in their social issue emphases strategies, as demonstrated in study two; and in their decisions to engage in entrepreneurship and their responses to economic adversity, as demonstrated in study three. Each of these studies supports the central proposition of this dissertation that stratification as an environmental context and the status positions it assigns to groups of entrepreneurial actors produces heterogeneous entrepreneurial strategies. ii PREFACE “For everyone to whom much is given, of him shall much be required; and of him to whom men entrust much, they will require and demand all the more.” —Christ (The Amplified Bible, Luke 12:48) Just a few months before graduating from college over a decade ago, I had the opportunity to make a life-changing decision. Though my plans were all set to attend graduate school at a good school near my parents’ home (free food, free rent, free gas money), I was asked to, instead, go and live and work in the inner-city for a small, completely underfunded and understaffed organization that wanted to make a difference in the lives of the poor. In the midst of high unemployment among our target group, even among those who regularly sought jobs, and sporadic violent crime, we had bright hopes for the future of the parents we helped and the children we read to and assisted with homework after school. Every day, the little organization for whom I worked and that I now understand to be a social enterprise innovatively tried to come up with funding strategies, publicity for our cause, and social programs to give if only a few of the people we worked with a fighting chance. For a few of them, I believe our efforts worked. Ever since this indelible experience, a light has been turned on in my head, and, quite honestly, my heart. It has endured throughout my corporate career, tenure as the owner of an entrepreneurial firm, and carried over into what I intend to make a successful academic career, beginning with the completion of this Ph.D. I want to understand how institutionally-assigned status impacts how groups of economic actors interact with one iii another and implement strategies. What constraints and enablements does status impose, structurally and cognitively, on economic and entrepreneurial actors both those “who have been given much” and those who have very little? How do diffuse, and seemingly impermeable economic stratification consequences manifest within firms or between groups, and what can be done to mitigate them? What organizational-level responses does stratification evoke or suppress, facilitate or prevent to societal issues by the social enterprises and socially responsible firms committed to redressing them? This dissertation represents my first “official” academic inquiry to answer some of these questions. iv ACKNOWLEDGEMENTS This dissertation would not be complete without me thanking several people who have made my pursuit of this Ph.D. possible. First, God, without faith in whom or confidence in His love I would have been an even greater control-freak without the courage to accomplish this task. To You I am forever grateful. My sweet husband, who loves me with his actions and lets me pursue all of my dreams—even at great sacrifice. Thank you, Keith, for holding down the fort (and paying the mortgage) in Virginia while I worked on this personal dream. I must also acknowledge my two little troopers, Joshua and Gabriel, the motivation for all of my efforts to be successful. Like my mom did for me, I intend to give you the best lives you can have and achieving this degree is part of that plan. My mom—Attorney Edmonds, you are the best and forever my exemplar. Thanks for your love, undying support, and inspiration. Aunt Yvonne—I could not have accomplished this without someone who could love and care for my boys while I worked. Thanks for demonstrating your love for us in this special way. Thanks, also, for sharing your expertise as a retired English professor. Your proofreading of this dissertation and my multiple papers leading up to this dissertation helped me tremendously. Dr. dt ogilvie—Without your assistance in facilitating my acceptance, funding, and completion of this program, I may not be accomplishing this milestone now. Thanks for your wisdom, guidance, and academic support. I appreciate you so much. v Dr. Jerome Williams—Thanks for all of your wisdom, humility, mentoring, guidance, example, and support. I sincerely appreciate all I have learned from you in just these past few years. Dr. Jeffrey Robinson – Your research topics inspire me and I intend to add to what you have already done in the entrepreneurship field. Thanks, also, for being a great mentor and for all of your specific research guidance, which has been invaluable to this dissertation. Dr. G.T. Lumpkin—Your research on entrepreneurship, and on social entrepreneurship in particular, has been very important in forming my understanding of the field and directing my own research interests. Thanks also for agreeing to serve on my committee and for offering such a wonderful doctoral social entrepreneurship course at Syracuse, which I believe will be helpful to me throughout my academic career. Dr. Nancy DiTomaso – Your class was one of the most enlightening of all the courses I have taken in the three degrees I have pursued. It introduced me to important organizational theory concepts that I can apply in my study of social structure and its impact on entrepreneurship and social responsibility throughout my academic career. vi TABLE OF CONTENTS ABSTRACT OF THE DISSERTATION ............................................................................. ii PREFACE ................................................................................................................................ iii ACKNOWLEDGEMENTS.....................................................................................................v TABLE OF CONTENTS ..................................................................................................... vii TABLE OF TABLES & FIGURES ......................................................................................xi Introduction .............................................................................................................................. 1 Study One - Stratification as an Entrepreneurial Context: Its Effect on the Entrepreneurial Strategies of Social Enterprises ............................................................................................... 5 Research Summary………………………………………………………………………5 Abstract ............................................................................................................................. 5 Introduction………………………………………………………………………………6 Literature Review……………………………………………………………………….11 Hypotheses………………………………………………………………………………25 Methodology…………………………………………………………………………….27 Data Sources, Sampling Protocol and Power Analysis ................................................ 27 Data Analysis Methods .................................................................................................. 31 Measures, Constructs & Variables ................................................................................ 33 Results……………………………………………………………………………………35 vii Discussion……………………………………………………………………………42 Limitations………………………………………………………………………….44 Conclusion……………………………………………………………………………45 References…………………………………………………………………………….47