We are used to viewing entrepreneurs as persons exhibiting exceptional initiative and willingness to take risks, who achieve considerable economic success by being innovative in markets. In so doing, they determine the economic development of modern capitalist societies and constitute a (mostly male) social group that has achieved a powerful elite social position. A society of entrepreneurs, in this sense, would be an association of a social class, as was rudimentarily observed during the period when industrialization was at its peak at the onset of the 20th century. This entrepreneur stereotype has always been a frail concept, because this class has always been characterized by a very heterogeneous social composition transgressing clear-cut social boundaries. For instance, owners of small and medium-sized enterprises have never fully fit the classical conception of an entrepreneur; instead, they were conceived of as self-employed and were more likely to be associated with the petite bourgeoisie in terms of their social structural
positioning.
In the following, a different conception of entrepreneurship will be developed. On the one hand, a broader definition of the concept will be introduced. On the other, the generalization and ‘profanation’ of entrepreneurial action will be diagnosed, fundamentally altering the social significance of entrepreneurship. According to this conception, a society of entrepreneurs refers to a society in which potentially every member throughout his or her life, time and again, faces the need to act as an entrepreneur. Under such circumstances, entrepreneurial risk-taking will only in exceptional cases open the doors to the social elite; in general, it is no more than a basic condition for maintaining one’s economic existence. In agreement with the traditional conception of entrepreneur, it is, however, still assumed that entrepreneurial action represents a driving factor of economic development and plays a crucial role in distributing income and therefore for the structure of social inequality.
There are a number of reasons to reconsider the category of entrepreneur. In sociological research on work and organizations, we have witnessed an expansion in the application of economic principles over the last few decades, resulting in the spread of market structures: for instance, in privatizing public services, increasingly aligning capital market dependent companies with shareholder value, and, above all, by introducing market-like structures as indirect management tools within organizations (e.g., profit centers or target agreements; cf. in German organization studies Minssen 2000, Moldaschl/Voß 2002, Mayer-Ahuja/Wolf 2005, Sauer 2006). This raises the question as to how increasing market orientation has affected opportunities for and demands on entrepreneurship.
At the same time, entrepreneurship has attracted remarkable attention internationally as a topic of debate in the social sciences and economics (cf. Berger 1991, Thornton 1999, Swedberg 2000a, Shane/Venkataram 2000, Acs/Audretsch 2003, Cornelius/Landström/ Persson 2006). The current debate aims at enhancing and expanding the concept of entrepreneur. Entrepreneurship is enhanced by its elevation to the status of an economic policy guideline. Entrepreneurial action is viewed as a guarantor of economic innovation and a driver for creating new employment opportunities. Accordingly, a large number of chairs on innovation, start-up, and entrepreneurship have been established at German universities as well. Entrepreneurship is extended to areas beyond the realm occupied by the traditional entrepreneur: for instance, in economics, the concept is applied to executives as intrapreneurs; outside of economics, it finds use in the context of social entrepreneurship.
The concept of the entreployee (Voß/Pongratz 1998, Pongratz/Voß 2003), too, implies such an extension of the concept. The attempt at redefining the category of entrepreneur seeks to contribute to interpreting change in the structures of work and organizations. At the same time, a framework is to be devised, allowing to link hitherto rather loosely combined areas of entrepreneurship research, such as start-up, innovation, venture capital, or family business (cf. Gregoire et al. 2006, Reader/Watkins 2006). The paper will start by clarifying the concept of entrepreneurship and distinguishing various forms of its manifestation. The second part provides
an interpretation of change in entrepreneurship based on the thesis of its expansion and ‘profanation’. The paper closes with a look at the conditions of developing project-type company structures with special emphasis on their cultural prerequisites.
The reasoning is directed against the frequently encountered one-sided and simplified use of the category of entrepreneur. It addresses overlapping and mixed forms of entrepreneurial action and points out contradictions and conflicts that have hitherto drawn little attention. Entrepreneurs, as a powerful economic elite and a historical type, represent a special case, often described in terms of ideal-type properties: socially and economically of great significance indeed, but nonetheless insufficient to cover the whole range of the phenomenon. Entrepreneurship is of much broader and more general significance for capitalism.
1. Categorical distinctions: entrepreneur and entrepreneur functions
As Richard Swedberg (2000) emphasizes, the category of entrepreneur has remained a peculiar blank in economics as in the social sciences. The development of entrepreneurship has been a topic of interest mostly in social and economic history; in Germany, the work of Jürgen Kocka (1975) is most notable in this respect. In contrast, business administration tends to focus on the company as an entity and is rarely concerned with the entrepreneur as a person. In sociology, entrepreneurs as a social elite draw attention from the ranks of social inequality research. The fact that there is no commonly agreed upon definition of “the entrepreneur” reflects the problematic state of the art in research (see the classic definitions of Schumpeter 1929 or Redlich 1957; cf. as an overview Martinelli 1994 and Swedberg 2000b, in historical perspective Jaeger 1990).
A distinction needs to be drawn between the position of the entrepreneur and the act of exercising entrepreneurial functions. For entrepreneurial functions can be performed by non-entrepreneurs as well. Accordingly, James Burnham (1941), in the middle of the previous century, already heavily criticized the “rule of managers” resulting from vesting chief executives with core entrepreneurial functions. Important distinctions can be made regarding the entrepreneur position (Chap. 1.1) as well as the entrepreneur function (Chap. 1.2).
1.1 Entrepreneur as a market position
Since Weber, Marx, Sombart, and Schumpeter the category of entrepreneur has been established in sociology to characterize a social class. These classics had the pioneer entrepreneur of early and heyday capitalism in mind. In later periods of capitalist development, both employing the notion of class and delineating entrepreneurs as a social group has proven increasingly difficult. As an alternative to class, I therefore suggest to define entrepreneur as a market position. Entrepreneurs are profit-seeking sellers of commodities on markets. In this sense, anyone becomes an entrepreneur whenever the person produces (or has others produce) and markets goods and services on his or her own account for the purpose of economic gain.
Market orientation of economic action at the core of this definition allows to distinguish different categories of entrepreneurs. In Germany, the distinction between the selfemployed and the classical capitalist entrepreneur has been a historically significant one. Analytically, both groups can be distinguished according to the criteria: use of labor, deployment of capital, and market orientation.
(1) The classical capitalist entrepreneur, as founder and operator of a larger business, typically limits his or her own labor input to performing executive functions. Technology and organization require sizeable capital investments, among other things, for acquiring the right to utilize others’ labor in order to derive lucrative profits from invested capital (in the light of considerable risk of losses). In Germany, this type of entrepreneur can be mostly found in the approximately 300,000 medium-size businesses (from 10 to 500 employees), many of which are family-owned.
(2) Whether the self-employed operating small businesses with few employees are classified as entrepreneurs is an issue which is handled differently in research and economic statistics. Empirically, this category comprises areas ranging from the academic freelance professions (doctors, pharmacists, architects, etc.), the crafts, commerce to agriculture and adds up to approximately four million persons in Germany (one tenth of the economically active population). In recent years, the number of single person businesses utilizing only the owner-operator’s own labor power has been on the rise. Market orientation (and classification as entrepreneur accordingly) varies strongly, since in many areas self-employed work is subject to professional or state regulation.
(3) If we take the labor market into consideration, employees, too, can be viewed as entrepreneurs in terms of producing and marketing their own labor power. On the labor market, businesses are in the position of consumers representing demand for labor, whereas employees are suppliers thereof. Based on this line of reasoning, Voß and Pongratz (1998) have coined the term ‘entreployee’ for a certain type of employee. The theoretically grounded assumption is that the type of professionalized employee common in Germany is evolving into a contractor who carries the burden of having to prove his or her utility to the business in question. Such systematically expanded self-control of one’s own labor is complemented by the need to actively utilize oneself according to economic principles (be it within a company or on the labor market). Both elements fundamentally affect the relationship of work and private life and imply taking selfrationalization of one’s life to a new level – in the sense of completely aligning it with economic necessities.
In contrast, the classification of selling one’s labor as an instance of exercising entrepreneurship
on the labor market is more general, since it comprises all employees: in terms of the basic act of producing and selling a commodity, any form of wage labor under capitalism requires an at least rudimentarily “entrepreneurial” approach to one’s own labor power. This basic idea was voiced early on (as early as 1907) by Lujo Brentano, who has been associated with the “Katheder-socialists”: “The worker commands the exclusive right to dispose of the means of production peculiar to him, that is, the utilization of his labor power. ... He shapes his labor power by transforming food into labor power, by developing skills ... He is a producer as well in giving existent material and power a different shape. ... This transformed product he offers to the buyers of labor as a good in its own right. ... He is an entrepreneur of labor.” (cited according to Jaeger 1990, p. 722 – translation from German) The category of entreployee represents a special case characterized by an explicitly entrepreneurial approach in dealing with this market position.
The position of an entrepreneur on the labor market is of a fundamentally different nature than the entrepreneurship of the capitalist entrepreneur or the self-employed person. The nature of the market (cf. Swedberg 1994) determines the kind of entrepreneurship, and the specific nature of the competitive environment shapes the form of market dependency one is subject to. In pointing out the commonalities related to the entrepreneur position, I by no means intend to gloss over such differences.
The entrepreneur position is associated with market risk. Market-related categories of entrepreneurs point to the great variety of risk constellations, which entail opportunities for success and profit – the main concern of most economic analyses – while they also embody dangers of loss and failure that are an inherent part of life as an entrepreneur just as well. The situation of many self-employed in commerce and agriculture paints a sobering picture of entrepreneurial reality. The opportunities to turn out a profit are mostly quite limited, while maintaining business operations requires high expenditures in terms of one’s own time and effort (often involving family members as well) and large investments pose existential risks. Small and micro entrepreneurs are frequently in a position of high market dependency and permanent insecurity. Precariousness can turn out to be a typical concomitant of entrepreneurial activity. In principle, this holds true for the entrepreneurial market position of the employee as well. However, regulation of the conditions governing the sale of labor power within the framework of industrial relations has limited market risks considerably (at least in Western Europe). Against this backdrop, the entrepreneurial nature of marketing labor power has largely fallen into oblivion.
The broadening of the concept suggested here points in a different direction than the conceptual expansion evidenced in entrepreneurship discourse mentioned at the outset of this article. There, exploring potential for economic renewal has been the issue. Here, concern is about the realistic assessment of entrepreneurial market dependency and associated risks.
1.2 Non-entrepreneurs performing entrepreneurial functions
The debate on entrepreneurship is not restricted to the market position of the entrepreneur but includes entrepreneurial functions exercised by persons who are not entrepreneurs themselves. Subsequently, two basic modes of non-entrepreneurs performing entrepreneurial functions can be distinguished: a non-entrepreneur may assume certain parts of the entrepreneur function or may exercise the core entrepreneur function. Par6 ticularly significant partial functions are management of operations, the employer function, and the investment function.
(1) In modern businesses, management of operations and the employer function are usually assigned to employed managers, who are not personally liable for entrepreneurial risk. Management authority detached from property ownership ignited Burham’s criticism of the “rule of managers”, which Helmut Schelsky (1965) took up in Germany. Management or a board of directors assume core management functions and entrustother executives with substantive responsibilities (over areas and departments) and specific employer functions. This process is the subject matter of the sociology of management (cf. Reed 1989, Alvesson/Willmott 1996 and 2003, Grey/Willmott 2005).
(2) Private employers, who utilize others’ labor power for purposes of individual consumption (typically household services) without any intention of producing for a market, are limited to the employer function. In this case, the elements of capital investment and market orientation are missing. In Germany, service personnel is privately employed mostly on an hourly basis for cleaning services. However, in this case, too, there have been other developments of exemplary significance. The so-called employer model for the care of the severely disabled represents an interesting special case. Since 2004, Book IX of the German Social Code grants the severely disabled the opportunity to employ their care personnel on their own, instead of such personnel being assigned by the respective authority (Metzler et al. 2006).
(3) The investment function pertains to the act of acquiring company shares. Although such capital investments may grant certain control options (depending on the legal structure of the company and the type of stake involved), they, nevertheless, do not vest investors with management and employer powers. In the context of increasing alignment of company strategy with shareholder value and utilization of venture capital, investors have gained greater importance (cf. Windolf 2005). Sociological research in this area, as in the field of private employers, is still in its infancy.
There is a second basic mode of non-entrepreneurs assuming entrepreneurial functions by exercising the core entrepreneur function, which is more important for the line of reasoning pursued here. It starts with Schumpeter’s notion of the capitalist entrepreneur whose specific contribution, as we all know, lies in the innovative combination of resources. According to Schumpeter, the entrepreneurial motive of “reforming or revolutionizing the structure of production” (1950, p. 214) under conditions of competition is the crucial force driving the process of “creative destruction”, which determines the momentum of the capitalist economy. Schumpeter’s notion of “creative destruction” has experienced an exceptional reception history, even though it is less compelling in terms of analytical precision as it is in terms of metaphoric quality and the tension inherent in the combination of the two terms.
Above all, it must be kept in mind that the term by necessity refers to a market. “Creativity”, in this context, does not refer to some inherent quality of action (as one might associate with the creativity of an artist) but indicates a variation that has asserted itself on the market: whether a combination of resources is creative in this sense or not is solely determined by market success. “Destruction”, on the other hand, would be misunderstood as the annihilation of others’ resources (e.g., of competitors). The market distinguishes itself from armed forms of competition precisely in that no violence is applied.
The destructive impact of innovation stems from the fact that a business’s market success indirectly deprives competitors’ of resources, thus inhibiting further productive activity on their part. (That does not preclude destructive side effects on the social and natural environment – but they are not the concern of Schumpeter’s line of reasoning). Thus, the notion “creative destruction” stands for innovative resource combinations that have proven successful in market competition.
Schumpeter still argues within the framework of sociological class analysis while transcending it in two respects: on the one hand, he predicts the entrepreneur class losing this core function in the course of innovation being depersonalized and automated in large businesses; on the other hand, he does not consider innovation to be tied to a specific social class – in Schumpeter’s view, “anyone who actually performs the function denoted by the term, even if they are dependent employees, as they currently are to an increasing degree ...” is an entrepreneur (1912, p. 111 – translated from German). In present-day debates on entrepreneurship, too, the entrepreneurial innovation function is assigned groups other than the classical entrepreneurs. The concepts of intrapreneur and social entrepreneurship are cases in point.
(1) The concept of intrapreneur – that is, of manager as an internal entrepreneur – also assigns the entrepreneurial core function of opening up markets by innovating, in addition to the employer function of managing and supervising, to wider circles of executives (cf. Pinchot 1985, Kanter 1989). This is done, among other things, by introducing market-simulating structures in an organization, such as cost and profit centers. The extent to which entrepreneurial rights of disposition are actually assigned in practice varies considerably (and mostly proves to be quite limited). However, irrespective of the actual scope of action at their command, intrapreneurs face heightened expectations in terms of entrepreneurial initiative and market success.
(2) Social entrepreneurship implies extending the entrepreneurial core function to noneconomic spheres of action – primarily to the non-profit sector, areas of civic involvement, and occasionally to state organizations (cf. Leadbeater 1997, Mair/Robinson/ Hockerts 2006, Austin/Stevenson/Wei-Skiller 2006). Here, the entrepreneur function is referred to even though neither interest in profit nor market orientation are involved.
In many cases, management methods are transferred from the profit to the nonprofit sector. In the process, the peculiar nature of social entrepreneurship – that is, entrepreneurship concerned with the solution of social problems – is taken into consideration to very different degrees. The entreployee represents a different case of extending the entrepreneurial core function to other areas (Voß/Pongratz 1998). This type is not only in the position of an entrepreneur with respect to the labor market, as any other employee is, but also acts as an entrepreneur assuming this position in an innovative market-oriented manner. The entreployee actively takes on the entrepreneurial core function on the labor market mainly by deliberately producing and marketing his or her own labor power in terms of utilizing him or herself according to economic principles.
2. Theses on change in capitalist entrepreneurship
In distinguishing different positions and functions, a kind of categorical “map of entrepreneurship” is drawn up, which is comprehensive in terms of content and operates on large scale, thus exposing little detail. This map discloses a number of fundamental changes.
2.1 Diversity of entrepreneurship
The market-related classification scheme based on entrepreneur positions and functions dismisses the focus on the classical capitalist entrepreneur that has prevailed in economics and the social sciences. This type of entrepreneur is identified as a special case, which played an exceptional role in the development of capitalism (as the classics have shown) and will continue to have a certain paradigmatic significance but must increasingly be viewed in relation to other forms of entrepreneurial action. A broad conception of the entrepreneur opens the view for an extensive range of entrepreneurial activities. A number of analytical clarifications are necessary to prevent this expanded category from ending in inappropriate generalizations.
(1) First, distinguishing entrepreneur types according to the structure of markets is of fundamental importance: relevant criteria are the kind of commodities involved, the mode of exchange, or the conditions of competition. Entrepreneurship in different types of markets is comparable only to a limited degree.
(2) Second, specialization in entrepreneur functions raises problems of integration. The classical capitalist entrepreneur combines significant functions within one person. He or she develops an innovative business idea, invests his or her own capital in its realization, acts as an employer, and personally manages and supervises the course of affairs. In contrast, in large modern businesses, these single functions are brought together by means of organization.
(3) Third, extending the entrepreneurial core function to large parts of the economically active population and to non-economic areas raises the question as to the relation between claim and reality of entrepreneurship: To what extent does the actual scope of action in specific cases (e.g., a profit center or a non-profit organization) accord with the ideological postulate of innovative entrepreneurship? How much entrepreneurial freedom can actually be exercised?
(4) Fourth and last, the fact that different market positions and entrepreneurial functions inevitably blend and overlap has to be systematically taken into consideration. For instance, an executive may (a) be an entrepreneur with regard to his or her own labor power and (b), as a supervisor, may routinely be charged with employer functions, while (c) being called upon to show own entrepreneurial initiative as an intrapreneur. In a capitalist economy with a diversity of market structures, such overlap is the normal and not the exceptional case. An actor is not per se an entrepreneur or non-entrepreneur, but is one or the other with regard to a certain market. When active on several markets, he or she may occupy different market positions and perform various entrepreneur functions depending on the market in question. Operating on several markets at the same time entails mutual impact and conflicts that have yet to be explored in detail.
2.2 Expansion and ‘profanation’
The suggested expansion of the category of entrepreneur originates in analytical and conceptional considerations – to be precise, in linking the notion of entrepreneur to market position. “Society of entrepreneurs”, at the same time, refers to the empirical phenomenon of increased significance of entrepreneurship in economy and society. In lack of empirical research, at this point the thesis of the expansion of entrepreneurship can only be substantiated theoretically, for the most part drawing on analyses of organizational change in businesses.
The increase in entrepreneur positions is an issue that is relatively easy to deal with. Their number depends on the spread of market structures and decentralization of markets: the more markets exist and the larger the number of sellers on those markets, the greater the number of entrepreneurs. The increase in self-employment in Germany during the past 20 years can hence be interpreted as a rise in entrepreneurship.
By contrast, the entrepreneurship debate raises a more challenging and analytically more interesting issue concerning the expansion of the entrepreneurial core function. For this assumption stands in stark contrast to Schumpeter’s assessment (1950) that entrepreneurs render themselves superfluous by turning the innovation function over to groups of managers and experts in bureaucratized businesses (p. 213 ff). Accordingly, he expected the willingness to innovate to become depersonalized, progress mechanized, and “the process of inventing itself ... a matter of routine” (p. 215 – translated from German). Schumpeter identified this as a key cause, which, in interaction with other social processes, would lead to the predicted self-destruction of capitalism.
Obviously, his forecast thoroughly underestimated capitalist societies’ capacity for integration and renewal (just as Karl Marx did). The 20th century has indeed witnessed the routinization of innovation ability: the major share of technological development has come out of specialized company research and development departments as well as state-sponsored research institutions. Nevertheless, this has neither impeded economic momentum nor curbed profitability in the long-term. Quite to the contrary, instead of the predicted end of capitalism, it has reached a new level of development, where the entrepreneurial core function of “creative destruction” has been mobilized in a flexibilized and generalized manner to an even more uncompromising degree.
The waves of organizational change in businesses observed during the past two decades have led to expanding entrepreneurship within companies in two directions: downward and inward. In a new way, this expansion perpetuates the process that has led to the evolution of the entrepreneurial core function into an everyday commonplace and that set in with the routinization of the innovation function. In accordance with Schumpeter’s characterization of capitalist civilization as “anti-heroic” (1950, p. 209), this development can be interpreted as a process of ‘profanation’. The term profanation is employed to depict the fact that entrepreneurship, once conceived as a type of exceptional economic action thriving on endowment with special faculties, has been deprived of its extraordinariness and relegated to the status of a commonplace activity that, in principle, anyone can be – and increasingly is – expected to perform.
(1) Organizational change seeking to install altered structures, such as project work, target agreements, or profit centers, leads to extending the entrepreneurial core function downward to ever larger circles of employees. The concept of intrapreneur casts such changes into a set of requirements representing an entrepreneurial profile. The profanation (and normalization) of entrepreneurial action becomes manifest in the context of project structures where employees at all levels are expected to bring forth innovative resource combinations. Employees are often gladly willing to do so, since project work is frequently experienced as a creative activity. This observation is a result of our exploratory empirical study on the question as to what extent the outlook on work held by qualified employees corresponds to the type we call entreployee (Pongratz/Voß 2003 and 2004) – and other studies with similar results support this finding. Contrary to an outlook centered on ensuring performance in line with professional standards, characteristic of the professionalized employee type, many respondents displayed an outlook emphasizing performance enhancement and were ready to improvise and take risks to a considerable degree. This type takes initiative and risks characteristic of entrepreneurial action to achieve efficient solutions geared toward market requirements. In jointly mastering ever-new challenges as a team, a specific kind of emotional experience is sought in work. Skillful improvisation and demonstrations of successful achievement serve to cope with inevitable risk.
(2) Organizational change serves to extend entrepreneurship inward by subjecting the organization’s own processes and structures to “creative destruction”. Schumpeter’s revolutionizing postulate primarily pertained to outwardly directed entrepreneurial action targeting the market environment. Internally he assumed (following Weber) bureaucratically stabilized structures. Measures directed at profound organizational change have kept the permanent renewal of internal structures ongoing for over 20 years now – analogous to outwardly directed entrepreneurial action. In many businesses, one organizational change project follows the next, infinitely perpetuating restructuration. Here, too, profanation becomes apparent in processes of change being organized in a projecttype fashion: demand for renewal is translated into organizational tasks, the realization of which requires not so much entrepreneurial leadership as a project-type process design that can be standardized with the help of a consultant.
The reasons for this development have been widely discussed in organizational change research (e.g. Kanter/Stein/Jick 1992): the most prominent ones are to tap productivity reserves (both in terms of individual work performance and modes of cooperation) and enhance flexibility within the organization. However, the problems that emerge in the wake of organizational change are indeed considerable and they have yet been relatively little researched (cf. Damanpour 1991, Armenakis/Bedeian 1999). Therefore, at this time, it is difficult to answer the question as to what extent and in what form the entrepreneurial impetus downward and inward will be established in the end.
2.3 The project form and entrepreneurial action
From an organization-theoretical point of view, the question arises as to how company integration can be ensured under conditions of permanent organizational change and independent
entrepreneurial activity within different company divisions. Established organization theories assume either mostly stable organizational structures or exogenous impulses triggering change. Assuming sustained processes of “creative destruction” within organizations is hardly compatible with the prevailing understanding of structure.
As yet, there is no theory of organizational change that comes anywhere close to adequately accounting for the implications of ongoing organizational change as observed empirically (cf. Collins 1998, Caldwell 2005).
The fact that work is organized in project form, which, as mentioned above, provides a framework for expanding and normalizing entrepreneurship within the organization, may hold an explanation. Projects are limited in terms of time and subject matter and are designed to master new and complex tasks by means of cooperation. They require innovative solutions to problems under conditions of limited resource availability: there are no blueprints for projects; each project unfolds its own momentum. Normalized entrepreneurial action within an organization is mainly linked to the project form, because this mode allows a high degree of self-organization and innovative initiative while remaining outwardly flexible for other structures to dock onto.
Research on project work is still in its infancy, because the sociology of work and organization have been late in recognizing the fundamental significance of this principle of work organization (cf. Strauss 1985, Yeatts 1997, Bollinger 2001, Hodgson 2004, Staber 2004, Latniak/Gerlmaier 2006). Most of the knowledge we do have is about coordination mechanisms within project groups, whereas little research has been done on coordination between various projects and their connections to centralized organization structures. Projects accommodate expectations of self-determined work, because processes and structures are laid down only in the course of the project. This motivates a pronounced willingness to perform, as empirically evidenced in case of the performance enhancement type identified in our study (Pongratz/Voß 2003). However, intense group dynamics and limited resources (e.g., a very tight timeframe) can cause exceptional strain, threatening to exceed the capacity to mentally and physically cope (Latniak/
Gerlmaier 2006).
The concept of loose coupling (according to Karl Weick 1985) provides a theoretical tool suited to grasp the interlinking of projects and their organizational integration. With regard to project work, it leads to a center-periphery model of organizations involving a formalized, hierarchically regulated, and thus “closely coupled” organizational core and a “loosely coupled” periphery consisting of a multitude of projects. Shifting innovative entrepreneurship to the organizational periphery constitutes a new mode of risk management.
It allows organizations to fully benefit from their members’ successful entrepreneurial initiatives, while the organizational core remains unaffected in case of failure and projects can easily be discontinued or outsourced. Integration of entrepreneurship cast in the guise of projects raises numerous theoretical and empirical questions waiting to be answered. To conclude, the framework conditions relevant to this development will be discussed.
3. Developmental conditions of entrepreneurship incorporated as projects
Summarized the main arguments are: in capitalism, entrepreneurs, as profit-seeking sellers of commodities, perform crucial economic functions; however, they do so (and this has yet to be adequately taken into account) in highly diverse markets and in manifold forms. These functions are shifted to ever larger sections of the economically active population by requiring them to assume entrepreneurial tasks in day-to-day work – in fact, they are frequently confronted with such requirements in multiply overlapping ways. Expanding entrepreneurship within organizations – downward and inward – in form of projects and in context of permanent organizational change is of crucial significance in this respect. The process of “creative destruction” is inwardly directed, thus challenging the prevailing understanding of organizations.
3.1 Enhanced willingness to perform serves to drive the development
Organizations are able to cope with inwardly directed “creative destruction” only if a large share of its members actively engage in such entrepreneurial initiative. This requirement points to the subjective side of the development, namely to the conditions underlying employee willingness and ability to undertake project-type entrepreneurial action. In German research on work, this subjective dynamic has been referred to as a process of “subjectivation” (Moldaschl/Voß 2002): employee achievement potential can be utilized at a new level in terms of quality and intensity, because the subjects mobilize and volunteer it on their own in the context of self-organized work. This frequently takes place on grounds of value commitments placing high priority on autonomous and interesting work (Baethge 1991). It is not just businesses that urge employees to elevate performance, rather the employees are willing to step up on their own when granted freedom in organizing their work (see also the concept of the „enterprising self“, e.g. Rose 1992, Bührmann 2006, Bröckling 2007).
The outlook centered on performance enhancement (described in chap. 2.2) involves a strong interest in adjusting one’s own work performance to changing demands in a permanent, autonomous improvement process. Especially professional employees, facing flexibilized conditions and high pressure to perform, derive considerable satisfaction from being able to make the best of difficult work conditions, thus proving themselves and asserting themselves on the market. In this respect, many employees are willing to approach their own labor power from the stance of an entrepreneur conforming to the entreployee type; in so doing, they at the same time satisfy the requirements of an intrapreneur.
This development, however, entails highly ambivalent consequences. Whereas increased opportunities for self-determined work are one side of the coin, growing pressure to perform and stringent targets for success constitute the other side. Accordingly, in Germany, the intensity of work is on the rise while working hours are being extended.
Under conditions of goal-oriented project-work, many employees are willing to work considerable overtime to ensure good results. This, however, also causes an increase in strain and health risks (Bollinger 2001, Latniak/Gerlmaier 2006).
In combination with strong individual ties to the company typical of Germany – the company and the immediate colleagues are experienced as a kind of extended occupational family – this attitude may lead to increased dependency on the company (Pongratz/Voß 2003, p. 180 ff), because many employees accept mounting pressure at work to forgo the risk of losing their familiar working environment. German executives, too, show a tendency of being overwhelmed by the demands of intrapreneurship (Faust/Jauch/Notz 2000). They frequently experience unease in the light of a leadership role characterized by conflicting demands of centralized bureaucratic control, on the one hand, and decentralized entrepreneurial responsibility, on the other. These problems raise the question of how the conditions governing entrepreneurial project work are to be regulated (e.g., in terms of pay based on results or health protection). In this respect, the cultural conditions underlying such a development of entrepreneurship also need to be considered.
3.2 Cultural prerequisites of a society of entrepreneurs
Germany is not exactly known for being well-endowed with an elaborate entrepreneurial culture. The share of self-employed amounts to an, in international comparison, very modest 11% of the economically active population and entrepreneurial activity is highly regulated in a number of areas (such as agriculture or the free-lance professions).
Can a process of inward-directed “creative destruction” and increasing demands for self-determined work be expected to trigger a surge in entrepreneurial development under such conditions? What are the cultural conditions for such a development in Germany?
Following Max Weber in his quest for the cultural foundations of modern orientations toward work, four aspects deserve special attention: rational conduct of life, professional qualification, work mentality, and cultural model.
(1) Keeping with Weber, we need to ask about how far spread and advanced a methodically rational conduct of life is as the basis of a capitalistic, entrepreneurial economic mentality. Findings from qualitative research by the project team “Alltägliche Lebensführung” (1995) (Everyday Conduct of Life), for instance, give evidence for new forms of rationalization of the conduct of life encountered in different occupational groups –though there are considerable variations and a high degree of improvisation is involved.
(2) Entrepreneurial initiative requires expert skills and calls for an institutional foundation accordingly to support the acquisition of professional knowledge and the generation of innovative knowledge (cf. Oesterdiekhoff 1993, Bührmann et al. 2006). The Global Entrepreneurship Monitor favorably assesses the infrastructural conditions for business start-ups in Germany, whereas the provision of educational programs geared toward supporting start-ups is judged insufficient (Sternberg/Brixy/Hundt 2007, p. 22 ff). In addition to the skill base, a general disposition for entrepreneurial engagement is also relevant. In Germany, a lack of entrepreneurial spirit is widely lamented in public debate (Achtenhagen/Welter 2005). The Global Entrepreneurship Monitor provides evidence indicating a relatively high degree of risk aversion in international comparison among the economically active German population. In Germany, start-up opportunities are viewed rather pessimistically and fear of failure looms large (Sternberg/Brixy/Hundt 2007, p. 19 f). Reasons for this are found in the orientation toward work and a lack of cultural models.
(3) The orientation toward work is related to the German system of institutions regulating work and significantly corresponds with welfare-state-related ideas of security. Our entreployee study, for instance, discloses little active entrepreneurial labor market orientation even under conditions of heightened job insecurity (Pongratz/Voß 2003, p. 168ff). On the contrary, we observed a security mentality (contradicting the assumption of entreployee!) with little willingness and ability to manage oneself according to economic principles. Even if the threat of job loss looms, many employees simply hope to be spared and hardly actively inform themselves about job alternatives.
(4) The appeal of the status of a socially secure employee also has to do with a lack of convincing cultural models exemplifying entrepreneurial initiative. For instance, forms of self-employment common in Germany are largely tied to professional norms (particularly in case of the trades and freelance occupations); hence, these groups show strong commitment to professional technical standards and to a much lesser extent commercial market orientation.
Given this situation, we can expect modest advances at best in the development of entrepreneurial initiative within or outside of organizations in Germany in the near future. Particularly as the question of how project-type entrepreneurship might be integrated into existing organization structures remains to be answered, analytically as well as in practice. Aside from resulting behavior uncertainties and coordination problems, an aggravation of social inequality looms as a potentially problematic consequence on the horizon. For endowment with material resources for entrepreneurial action is just as unequally distributed as are its cultural prerequisites. The distributional impact characteristic of market dynamics leads to the accumulation of profit in the hands of few market participants (when refraining from regulatory intervention), consequently reinforcing inequalities. The entrepreneurial initiatives discussed here involve many aspects characteristic of winner-takes-all markets, where marginal variations in performance translate into large differences in profit (Frank/Cook 1995).
From the vantage point of social analysis, these are signs of a structural change that is breaking new ground for the competition-related innovation spiral – a fundamental functional principle of capitalist economy – in economy and society. The separation of this function from a specific social class, irrespective of all transitional difficulties involved, does not at all indicate crisis but is an expression of the persistent vitality and creativity of capitalism. The question whether we will all turn into entrepreneurs in a “society of entrepreneurs” must still be answered with caution. In the line of reasoning offered here, we may indeed expect it to be increasingly difficult to dodge entrepreneurial demands on our work in the course of our work life – whether they arise from entrepreneurial market position, delegation of entrepreneurial functions, or are just an outgrowth of ideology. Nevertheless, “being affected by entrepreneurship” will be experienced in different ways and to varying extents: selectively or permanently, self- or other-directed, partially or comprehensively, successfully or precariously. Although adhering to the functional logic of capitalism, entrepreneurship is not simply a fate but an opportunity for action that may be deliberately chosen and shaped.
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