Essays on the Strategies and Processes of Informal Entrepreneurial Firms

Authors

Everlyne Nyabisi Misati, Florida International UniversityFollow

Document Type

Dissertation

Degree

Doctor of Philosophy (PhD)

Major/Program

Business Administration

First Advisor's Name

Fred O. Walumbwa

First Advisor's Committee Title

Committee Co-Chair

Second Advisor's Name

Sumit K. Kundu

Second Advisor's Committee Title

Committee Co-Chair

Third Advisor's Name

William Newburry

Third Advisor's Committee Title

Committee Member

Fourth Advisor's Name

Lorraine Eden

Fourth Advisor's Committee Title

Committee Member

Fifth Advisor's Name

Karlene Cousins

Fifth Advisor's Committee Title

Committee Member

Sixth Advisor's Name

Somnath Lahiri

Sixth Advisor's Committee Title

Committee Member

Keywords

informal entrepreneurship, firm formalization, firm legitimation, firm internationalization, firm growth, bricolage, institutions, networks, sensegiving, sensemaking

Date of Defense

6-24-2020

Abstract

Unlike their formal counterparts, informal entrepreneurial firms (IEFs), or unregistered businesses, operate in a unique context: outside the boundaries of legal jurisdiction. This presents many interesting research questions and a promising opportunity to extend management theory. For example, how, when, and why do IEFs transition to the formal sector, expand their markets, and gain credibility and support from key actors? I address these questions in three independent but related essays.

To begin with, research suggests that the benefits firms derive from formalization outweigh those of operating informally. Why then do entrepreneurs start their firms informally and what later influences them to formalize? On the one hand, theory contends that imperfections in formal institutions engender informal entrepreneurship. On the other hand, theory also suggests that the higher the quality of formal institutions, the more likely entrepreneurs are to formalize their firms. What then influences entrepreneurs’ intentions to formalize their firms in contexts where prevailing imperfections in formal institutions, which engendered informality in the first place, persist? In the first essay, I draw on mixed methods and find that informal entrepreneurs exert their agency: they take the initiative to tap into their resourcefulness, through bricolage and networks, to achieve firm growth, which motivates them to formalize.

Further, entrepreneurial firms are typically small and have relatively scarce resources, which poses significant challenges for their internationalization. When these small, under-resourced firms are also unregistered, their internationalization challenges are likely to be amplified due, in part, to the liability of informality (LOI). Yet, some IEFs still manage to internationalize. How do these firms accomplish this strategic feat? In the second essay, I qualitatively illuminate how informal entrepreneurs employ network bricolage, through intermediaries, such as export agents, tourists, and the diaspora, to navigate internationalization.

Lastly, informality has conventionally been associated with a lack of organizational legitimacy. Yet, some IEFs still manage to gain credibility and support from their stakeholders. How do these firms achieve this crucial strategic goal? In the third essay, I conceptually examine how some informal entrepreneurs leverage entrepreneurial bricolage to signal legitimacy, which then better positions their firms to access resources and markets.

Identifier

FIDC009022

Recommended Citation

Misati, Everlyne Nyabisi, "Essays on the Strategies and Processes of Informal Entrepreneurial Firms" (2020). FIU Electronic Theses and Dissertations. 4498.
https://digitalcommons.fiu.edu/etd/4498