Abstract

This paper uses institutional theory to investigate the nexus between institutional context and development of the entrepreneurial process in family firms (from start-up, development, and growth to innovation and corporate entrepreneurship), focussing on the behaviour patterns of entrepreneurs. A qualitative case study methodology was used to examine 60 cases over a one-year period. Thirty of these cases were from two extreme contexts: affluent means and modest means. Six cases were considered to have entrepreneurial-development and growth potential and, thus were selected for in-depth interviews. The institutional context influences entrepreneurial development. While external institutions, such as regulatory policies and macroeconomic environment positively influence entrepreneurial development from an affluent-means context; they have no impact on entrepreneurial development in a modest-means context. Qualitative studies have ways of delving deeper into real issues that can help entrepreneurs begin to adopt modern management practices. Too many informal enterprises may never contribute to economic growth. Thispoints to the need for academia to begin generating meaningful discourses by looking outside the traditional family research topics. If policymakers consider the implications of the study, it will change the lives of many informal enterprises and reduce poverty.

Key words: Entrepreneurship, institutional context, family enterprises, entrepreneurial development, entrepreneurial growth.