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Title: The entrepreneur's experience of business failure : adopting a sensemaking and a process perspective
Author: Byrne, Orla
Awarding Body: University of Strathclyde
Current Institution: University of Strathclyde
Date of Award: 2013
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This thesis explores the entrepreneur's experience of business failure. It identifies sensemaking, emotions and coping as central to the entrepreneur's failure experience. I adopt a sensemaking and a process perspective to develop two sets of research questions. These questions probe (1) the relationship between sensemaking, emotions and coping, as the entrepreneur learns from business failure, and (2) the way in which sensemaking, emotions and coping unfold for the entrepreneur, throughout the business failure process. I adopt a multiple case study approach, with 13 entrepreneurs who have experienced business failure, to address these two sets of research questions. I conduct both within- and cross- case analysis, of the interview narratives and secondary data, to reveal the following findings. First, existing research on emotions of business failure has mostly focused on the disruptive nature of negative emotions, how they are managed (through coping), and how they obstruct sense making. In contrast, this study found there is great diversity in entrepreneurs' emotional responses to business failure. The entrepreneurs' sensemaking process is influenced by combinations of both negative and positive emotions. Further, emotion-focused coping plays a critical role in dealing with negative emotions and meta-cognitive strategies, which focus attention on the failure event, promote self-reflection and facilitate sensemaking. Second, the business failure process has been explained as a sequence of five 'time frames' or 'stages'. However, there is limited empirical exploration of all five stages in a single study. As a result, there is little understanding of how entrepreneurs experience the failure process from start to finish. There is also little understanding of how each stage differs from the next, regarding the entrepreneur's emotions, coping and sensemaking processes. The process analysis of this study identified that business failure is non-linear in nature and that some entrepreneurs make sense soon after their business closes while others take longer to make sense of the experience. The study also found that entrepreneurs undergo a rollercoaster of rising and falling negative emotions, from the descent of the business to their own re-emergence, and lastly, rather than oscillating between coping strategies, entrepreneurs tended to rely heavily on problem-focused coping, during the descent of the business and as they closed their businesses down. This study is relevant to many audiences. For entrepreneurs, the findings identify challenges and demands of making sense from business failure and provide insight into what the business failure process entails. The greater our understanding of business failure, the less there is to fear. For entrepreneurship educators, this study completes the entrepreneurial life-cycle model and benefits entrepreneurship students in their knowing what to expect if they face business failure. As for enterprise p olicy makers, this study recommends providing greater support for entrepreneurs who experience business failure, to creating safe, socialised networks and environments to assist entrepreneurs in their sensemaking and recovery.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available