Entrepreneurial Teams and the Theory-Based View: The Microfoundations of Collective Theory Construction, Refinement and Commitment

Abstract

The theory-based view in entrepreneurship and strategy argues that novel, valuable strategies come from the theories economic actors hold. A growing literature explores how entrepreneurs and managers evaluate the potential of a theory and organize to capture the value such a theory could create. However, the theory-based view—along with many other related perspectives on value creation—assume, either implicitly or explicitly, a stylized, individual "entrepreneur-strategist" in possession of a theory. This paper relaxes this assumption, introducing the possibility that, sometimes, teams rather than individuals collectively form, update, and commit to act upon a theory of value. Using a formal model that leverages insights from classic and modern pragmatism, this paper makes explicit the individual and group processes required for a team to hold beliefs about a theory, communicate those beliefs and update them, and form intentions to act as the theory the team is collectively composing evolves over time. In so doing, this paper extends the potential of the theory-based view as a perspective to understand how groups, and in particular nascent entrepreneurial teams, collectively envision a theory of value, refine it, and subsequently commit to act to realize the potential value such a theory implies.

Keywords: Pragmatism, New Venture Teams, Theory-Based View, Social Ontology JEL Codes: DO2, L26, M13, J54