The Emergence of Proto‐Institutions in the New Normal Business Landscape: Dialectic Institutional Work and the Dutch Drone Industry

Katrin M. Smolka and Pursey P. M. A. R. Heugens

Journal of Management Studies, 2020, vol. 57, issue 3, 626-663

Abstract: In the current business landscape, in which technology‐enabled entrepreneurship is part of the New Normal, regulatory institutional structures are in constant flux. Previous studies have framed the challenges facing entrepreneurs in mature organizational fields as avoiding the power of overbearing regulators long enough to establish the legitimacy of their ventures. In fields typified by New Normal conditions, however, regulatory frameworks for evaluating new technology‐enabled ventures are often still lacking. Regulators may choose to actively reach out to entrepreneurs to arrive at a better understanding of the radical technological changes and high‐frequency entrepreneurial behavioural adaptations that occur in these settings. To grasp how novel regulatory institutional structures come about in the New Normal business landscape, we conducted a processual study of the emergence of a new technology that is the Dutch remotely piloted aircraft systems (drone) industry between 2000 and 2018. Our findings show that regulatory proto‐institutions result from dialectic institutional work in the form of structured interactions between entrepreneurs and regulators. Specifically, we present a process model that reveals how new regulatory structures evolve in contexts where high levels of technological and behavioural change induce systemic uncertainty, and enlarge the interdependence between entrepreneurs and regulators. We suggest that our process theory of proto‐institutional emergence generalizes towards other organizational fields in which technology‐enabled entrepreneurship has become the main driver of growth. Theoretically, our findings speak to the literatures on institutional work, proto‐institutional emergence, and the New Normal business landscape.

Date: 2020
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