Abstract
While the phenomena of failure and exit are abundantly seen in entrepreneurship practice, they remain largely ignored in entrepreneurship research. The book under review defines and delineates these concepts, reviews the current state of research and highlights the innumerable opportunities they offer for exploration.
The editors’ story in the introduction highlights two important lessons for scholars: (a) go to conferences and (b) explore collaboration. How Dawn and Karl met, discussed, found a common research theme, collaborated, and jointly published may seem picture-perfect in hindsight, but it is far from planned. Their 10-year journey since meeting at a 2005 conference seems to have resulted in this handbook. This well designed and delivered volume is full of research avenues for entrepreneurship scholars on entrepreneurial exit.
Aldrich’s essay is an ideal start to the volume. It distinguishes exits from failures and discusses how exits need to be studied at multiple levels of analysis. It is not just individuals and firms that exit, but entire industries/populations and societies. He urges researchers to focus on eras (temporality) so as to generalize usefully. The discussion on the terms ‘industry’ and ‘populations’ is particularly appealing. His ecological background to the subject gives the call for longitudinal studies by diverse teams of scholars’ greater sanctity. He identifies the need to study exits at the level of population (emergence, growth and decline). Wicker and Davidsson, in their chapter, describe the need to study nascent entrepreneurial disengagement differently because economic rationality and access to resources reasoning do not explain exits adequately. They apply Sternberg’s triangular theory of love on nascent entrepreneurs and develop a conceptual model to explain the phenomenon. Although the cross pollination of ideas is unique, the model and propositions are only a starting point. While Aldrich’s chapter provides numerous insights for research on populations, Wicker and Davidsson focus on the individual. Both of these approaches have methodical constraints, but are green-field opportunities for research.
Without mincing words, Marlow and Swail highlight the gender blindness in the exit debate. Their call to study gender differences in this stream of research, seems rational, since the life-course of both genders differ quite significantly. The chapter raises number of unanswered questions. If a gendered perspective offers research opportunities, the other, social entrepreneurship seems to offer even more. Two chapters one by Sarason and Hanley and the other by Lortie raise many questions on exits of social enterprises. The former chapter uses structuration theory while the latter uses resource-based view and agency theories. The resulting models and their propositions are a good beginning but are not too convincing and seem far from operationalization.
It was a pleasant surprise to read an entrepreneur’s account in a handbook of research, an entire chapter without a single reference. A first person account of the pleasures and pains that entrepreneurs go through came as a great relief especially, after Farhat and Robb’s chapter, event history analysis on the Kauffman Firm Survey data. The event analysis chapter provides number of ideas to quantitatively study exits, while acknowledging that the Kauffman dataset is one of its kinds. Taken together, these two chapters highlight the importance to studying the exit phenomenon using multiple research methods.
Weesie and Teefflen explore the poor rate of success in business transfers, an important challenge among family businesses. Though the chapter attempts to link psychological barriers and coping strategies, it does not significantly add to our understanding, other than reiterating the need for more qualitative work on both family and non-family firms. Among the conceptual chapters, the one by Soleimanof, Morris and Syed seems most well structured. It brings attention to a highly debatable form of exit, retirement. Do entrepreneurs retire? Should they? Can they be forced to? Many aspects are discussed, and a conceptual model built using the popular Theory of Planned Behaviour. The research model and propositions developed around it merit study and testing. Institutional researchers and policy makers will benefit from Jenkins, Steen, and Verreynne’s chapter, which explores how relocations qualify as exits at the regional level. This seems to open a unique area of inquiry at the intersection of economic geography and entrepreneurship. This chapter discusses triggers for relocation, their impact and the ‘flow-on’ effect in the region.
What happens when a company fails? The longitudinal analysis of a company called ImmuLogic by Packalen discusses this while detailing the concept of entrepreneurial recycling. Apart from making contributions to network theory this chapter shows how failure or exit of a company from the environment is not a complete loss to society. Bouzaidi’s chapter is a primer on venture capital financing process. It stands apart in the book. It discusses exit routes, conflicting preferences of venture capitalists and entrepreneurs, explores exit determinants and outcomes, and ends by raising questions for future research.
While the editors of this well produced book wish entrepreneurs’ benefit directly from their work, I am unsure if they will find it an easy read, except for the chapter written by a fellow entrepreneur Gary Salomon. This does not make the book any less good. Researchers will benefit immensely from the book, while educators and trainers in entrepreneurship will find useful frameworks, ideas, tools, examples and cases to bring the concept of entrepreneurial exit into the classroom. It is a law of life that the old must give way to the new. If this is true, exits are but a natural phenomenon. This book is a clarion call to entrepreneurship researchers to make a more comprehensive entry into the study of entrepreneurial exits.