Institutional Logics in Entrepreneurial Ventures: How Competing Logics arise and shape organizational processes and outcomes during scale-up

In order to scale, entrepreneurial ventures (younger, growth oriented and innovative firms) often have to change the market they operate in. For example, going from an early scientific market to a mainstream one. These different markets work with different logics; what is valuable to the early market is not as valuable to the mainstream one and vice versa. When scaling up, the venture can encounter institutional complexity, that is when it faces both logics at the same time. This thesis investigates how a scaling venture encounters this institutional complexity. The thesis focuses on how these macro-level changes affect the internal processes and outcomes on the micro-level in the venture. The thesis consists of four papers. The first paper reviews the core theoretical literature of institutional logics that the thesis builds upon. The second and third paper rely on the longitudinal, qualitative data collected from a venture. The second paper investigates how a new logic is adopted on the micro-level and the consequence for the venture. The third follows this paper in time and investigates how the firm’s strategy of catering to two different logics incurred a tradeoff in accessing resources and legitimacy from both sources and having internal coherence, as the logics was used by each group differently and thus two sets of beliefs, ways of working and rules were present. The fourth paper builds a theoretical argument on how organizations respond to institutional change. This paper argues that working in peripheral organizations incurs that managers have more unencumbered ways of thinking and therefore are more able to embrace institutional change compared to managers in embedded organizations. The overarching contribution of this thesis is to illustrate and analyze how competing logics influence and hinder the scale-up of entrepreneurial ventures. This analysis contributes to the institutional logics literature, especially the one on hybrid organizations and institutional complexity, by providing insights into the micro-level mechanisms of the logics, which has been lacking in development in some areas. The findings provide practical insights into the challenges that ventures face in their internal organization as they scale. Thereby, thesis seeks to help out on this societal important issue of boosting the growth of, and in, new and innovative firms.