This article offers an alternative to the dominant individualistic theories of entrepreneurship. It develops Scheff’s notion of the deference-emotion system to propose a theory of entrepreneurial conduct that emphasizes social interaction and emotion. This theory proposes that the emotions of pride and shame, produced by the giving and withholding of deference, can motivate action that resists the innovation-inhibiting effect of social sanctions. By suggesting a social basis for the generation and reproduction of entrepreneurial conduct, it is able to explain the frequently volatile and inconsistent nature of this conduct, an important dimension of entrepreneurial behaviour that, whilst recognized empirically, normally escapes theoretical attention. The article advocates making social situations rather than individuals the analytical starting point for fresh and potentially valuable insights into the nature of entrepreneurial behaviour.
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