title: Entrepreneurship and institutional challenges: disincentives or opportunities? Case studies in the Palestinian mobile phone sector
Creators: name: Alaydi, Sharif Rateb
Publisher: name: University of Glasgow
Year: 2021

description: This study aims to address the core research question, are institutional barriers and voids in extremely uncertain environments perceived as disincentives and/or opportunities? The emphasis in the extant entrepreneurship literature is mainly on the separate and negative influence of institutional barriers, voids and violence. The present study is the first to analyse the cumulative impact of all these negative challenges and consider their possible positive as well as negative influences. Another research gap here is that the exact role that uncertainty plays in stimulating and/or obstructing entrepreneurial action has remained obscure. The study integrates the institution-based view (IBV) and the subjectivist view of entrepreneurship to address these two research gaps better capture the nuances of extreme institutional challenges in relation to their effects on the firm’s survival as well as on the entrepreneurial processes. The study adopted a qualitative case study approach and sampled two ‘polar’ cases - one indigenous firm and one MNE - that represented the population of mobile phone providers in Palestine. A thematic analysis of thirty-one semi-structured Skype interviews was used. This study treated institutional challenges and uncertainty separately, but evidence from the two case studies shows that they were related and reported many similar relations. The indigenous firm and the MNE faced extreme institutional challenges, which were perceived as opportunities/incentives and disincentives. The results show that the three types of uncertainty (state, effect and response) can indeed be a source of both positive and negative impacts for entrepreneurial processes and action. The aggregate level of uncertainty may motivate entrepreneurial processes and action, particularly opportunity exploitation, to a maximum level, beyond which any further increase in uncertainty may be associated with declines, involving what this study labels as ‘uncertainty overload’. The analysis also demonstrates that the attributes of managers, together with their emotions aroused by levels of uncertainty, may play a crucial part in both stimulating and obstructing opportunity exploitation. The two firms each employed three strategic responses to institutional challenges: acceptance, adaptation and influence. The analysis further finds that a wide variety of factors influenced opportunity-related processes and entrepreneurial action, which were broadly related to the manager’s personality, prior knowledge and social networks, institutional environment, and an opportunity’s characteristics. The two firms also embraced all opportunity identification options (recognition, discovery and creation) and developed a set of different actions, beyond immediate opportunity exploitation. This study may enrich and complement the main argument of the IBV literature by confirming the binary effects (as benefits and disbenefits) of institutional challenges on the two firms. It also may contribute to the IBV literature through providing a blend of three strategic responses that employed by the indigenous firm and MNE to navigate and shape their institutional environment. The study provides an integrated framework that may portray a fuller view pertaining to entrepreneurial processes and action within the Palestinian uncertain environment. It suggests a revision to the current entrepreneurship literature in relation to how uncertainty affects entrepreneurship by confirming an ambiguous impact (as incentive and/or disincentive) of extreme uncertainty on the two firms and emphasising the significant influence that emotions and personal attributes of the entrepreneur may exert on entrepreneurial action in an uncertain business environment.