Entrepreneurship and misconducting behaviors: A conceptual model of institutional divergence

Abstract

Over the last decades, scholars considered entrepreneurship as synonymous with thinking “outside of the box” and breaking the status quo. In this view, entrepreneurs are often viewed as heroes that try to improve the status quo. However, not all entrepreneurial rule-breaking are legal or moral a priori. The business landscape depicts a number of entrepreneurial ventures holding rebellious and anti-social postures. Despite the relevance of such a phenomenon, the motives and the dynamics beyond how and why some entrepreneurs deliberately diverge from laws and social norms has been overlooked. Accordingly, we introduce a novel conceptual model and framework using four propositions that contributes to the extant literature in two ways: first, we propose a logic through which entrepreneurs consciously diverge from legal and legitimate institutions, and second, we introduce antecedents and moderating variables explaining the behaviors of disobeying regulations and moral codes by leveraging cognitive and institutional theories. Finally, practical implications of the proposed model for entrepreneurs, policymakers, and business educators are discussed.